The Knotty Issue of Privilege in Competition Law in the EU and UK

By Iandra McCallum (London)

Privilege in competition law in and within the EU has always been a complex matter, not least because the issue of defining how wide the scope of privilege is and to which document privilege attaches is in itself complex. In addition, a further layer of complexity is added by the different rules which apply to privilege at an EU level and at a national level for each of the 25 EU member states. How does one, for example, advise a company when it is not only difficult to define which documents privilege will attach to, when at an EU level privilege does not attach to documents prepared by in-house counsel, whereas it does attach to documents prepared by in-house lawyers in some member states, such as the UK? What is more, while in some EU member states there is a clear distinction between litigation and legal advice privilege, others do not draw such distinctions and only rely on litigation privilege. Finally, in some EU member states, such as Germany, legal privilege barely exists.

The issue of privilege is very topical at the moment not only because of recent debate in the EU in relation to whether or not privilege should be extended to in-house counsel, or cases such as Three Rivers1 in the UK or Akzo/Akcros2 in the EU, but also because of the drive on the part of the Commission and National Competition Authorities (NCAs) to route out cartel cases. There has been a marked increase in the amount of dawn raids that the regulatory authorities have visited upon firms. The wider investigatory powers which are now conferred on the Commission through Council Regulation No. 1/2003 even allow seizure of documents on private premises. Equivalent powers are afforded to the Office of Fair Trading in the UK by the Enterprise Act 2002. This therefore makes it all the more critical to determine how privilege should be addressed and which documents are protected by privilege.

At the EU level hopes were raised of extending privilege to in-house counsel by a proposal from the European Parliament to extend privilege to communications between in-house counsel and companies in the new EC merger regulations3 provided that "the legal counsel is properly qualified and subject to adequate rules of professional ethics and discipline which are laid down and enforced in the general interest by the professional association to which the legal counsel belongs."

While this proposal was not adopted, a recent case may yet extend some...