CYPRUS Law and Practice Contributed by: Agathi Zervou and Maya Athanatou, George Z. Georgiou & Associates LLC
6. Privileges 6.1 Invoking the Privilege Against Self- Incrimination Privilege against self-incrimination may be invoked by a respondent or defendant (and, in criminal proceed - ings, by an accused person) in respect of both oral and documentary evidence. The principle is grounded in common law principles and reflected in the Con - stitution, including the right to a fair trial and the right not to incriminate oneself. Accordingly, a defendant may refuse to answer specific questions or produce documents where doing so would expose them to a real risk of criminal liability. Privilege against self-incrimination also arises in the context of civil proceedings, including fraud claims. For example, a defendant may rely on it where com - pliance with search orders or disclosure orders would create a real risk of criminal prosecution. The protec - tion extends not only to the production of information or documents but also to obligations requiring entry to premises for inspection or copying of materials where there is a genuine risk of self-incrimination. 6.2 Undermining the Privilege Over Communications Exempt From Discovery Legal professional privilege is recognised as a funda - mental protection in legal proceedings. This is divided into two main categories: legal advice privilege and litigation privilege. Legal advice privilege applies to confidential communications between a lawyer and client for the purpose of giving or receiving legal advice, regardless of whether litigation is contem - plated. Litigation privilege, on the other hand, applies to communications between a lawyer or client and third parties, but only where litigation is pending or reasonably anticipated and the communications are made for the dominant purpose of that litigation. The protection afforded by the application of privilege does not apply in instances of fraud – better known as the iniquity exception. More importantly, privilege will not apply to communications or documents created for the purpose of furthering a fraud, crime or other form of dishonest or improper conduct. This applies equally to both legal advice privilege and litigation privilege. The exception may arise even where the
legal adviser is unaware of the fraudulent purpose; what is decisive is the intention of the client (or a third party using the client). Cypriot courts will require a strong prima facie case, which would still be assessed on the balance of probabilities, that the communica - tion was part of or in furtherance of such wrongdoing. Where this threshold is met, the privilege is displaced, and the material becomes disclosable. 7. Special Rules and Laws 7.1 Rules for Claiming Punitive or Exemplary Damages Τhe general rule is that damages in civil proceedings are awarded to compensate the claimant for loss suf - fered, rather than to punish the defendant. However, in limited and exceptional circumstances, the courts may award punitive (or exemplary) dam - ages. Such damages may be awarded where the defendant has deliberately committed a tort with the intention of obtaining a benefit that they calculated would outweigh any compensation payable to the claimant. They may also be justified where the defend - ant’s conduct is particularly egregious, oppressive or morally reprehensible, which warrants punishment by a civil court. 7.2 Laws to Protect “Banking Secrecy” Cyprus has specific legal provisions protecting bank - ing secrecy. Banking secrecy is regulated by Section 29 (1) of the Banking Law (66 (I)/97), which prohibits any member of the administrative and management body, the chief executive, directors, managers, offic - ers and employees of a bank who have access to the records of the bank with regard to the account of any individual customer from giving, divulging, revealing or using for their benefit any information concerning the account of that client. This prohibition applies both during their employment or professional relationship with the bank and after the termination thereof. Banking secrecy in Cyprus is not absolute and may be limited in fraud cases through certain mechanisms.
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