Freshfields' Frankfurt office

Freshfields Bruckhaus Deringer has set up an ethics committee to advise the firm's Germany-based management following intense scrutiny of its alleged role in the country's cum-ex tax scandal.

The committee will operate independently with a set of ethical principles and written rules of conduct, according to a firm statement. It will be headed by an external chair, Udo Di Fabio, a former judge at Germany's highest court, and will also include Freshfields partners Barbara Keil and Michael Josenhans, as well as of counsel and former partner Christoph von Bülow.

According to the statement, the committee is a means for the firm to demonstrate "its commitment to the ethical practice of law, which has recently become a focus of attention in connection with the cum/ex trades".

Freshfields reputation in Germany has been hit by its connection to the cum-ex controversy, in which in which high profile banks were found to have claimed twice on tax rebates, costing Germany several billions.

Last year, the firm's former German head of tax Ulf Johannemann was arrested in relation to "serious tax evasion" for developing and advising on the so-called "cum-ex" transactions while "knowing the actual structure of the cum-ex transactions and deliberately issuing a maturity report in order to make the business seem supposedly legal".

Committee chair Di Fabio said in a statement: "Freshfields is breaking new ground as a large commercial law firm when it codifies its values in this form and obtains independent and external advice on their application. I look forward to contributing with my work to the further development of the self-image of a profession that is an indispensable part of our free and democratic social and economic order."

In October of last year, Law.com International revealed that Freshfields was to set up a 'conduct committee' for partners that required a warning about their behaviour, through which partners could face heavy automatic financial penalties.

The revelation came in the same month that the U.K. Solicitors Disciplinary Tribunal handed former Freshfields partner Ryan Beckwith a total £235,000 penalty for inappropriate behaviour, following a nine-day hearing into allegations of sexual misconduct.