As violations of financial, competition, and environmental laws become increasingly criminalized—for offenses that formerly were treated purely as civil violations—management of companies in the energy industry are confronted with the need to understand the implications of asserting a Fifth Amendment privilege against self-incrimination.
To understand the ramifications of a defendant’s Fifth Amendment assertion, it is helpful to understand how self-incrimination issues typically arise. An individual who violates a criminal statute obviously can be prosecuted. He or she may be an actual defendant in an active criminal case, may be aware of an ongoing criminal investigation, or may simply fear criminal proceedings at some undetermined point in the future. The criminal act may well have caused damages to others. If so, the injured parties are free to file suit even if a criminal prosecution or investigation is ongoing. Once a civil suit is filed, the plaintiff will want to take depositions and otherwise move the case toward trial. The court typically will enter a scheduling order with discovery cutoff and trial dates.
We commonly hear that a criminal defendant’s choice to invoke the Fifth Amendment is not admissible as evidence of guilt. But may a defendant invoke the Fifth Amendment and decline to testify in a civil or an administrative proceeding? If so, what is the effect on the civil case? Can civil litigation proceed without the defendant’s testimony? In fact, an individual may indeed decline to testify during civil proceedings on the ground that his testimony may incriminate him—but the decision not to testify carries potentially severe consequences should the case proceed to trial.
In contrast to a criminal trial, the court and jury are allowed to draw an adverse inference when a defendant invokes his Fifth Amendment rights in a civil case. It doesn’t take a genius, therefore, to see that that the Fifth Amendment privilege is a tradeoff between disagreeable alternatives in a civil context—a choice between greater risk of criminal consequences if the witness testifies or a greater risk of civil liability if the witness does not (e.g., “He must have something to hide!”).