Limiting the Scope of Privilege for In-House Lawyers

Introduction

The European Court of Justice (ECJ) has just published its much awaited judgment in Akzo Nobel Chemicals Limited and Akcros Chemicals Limited v European Commission. This judgment has confirmed the existing limitation on the ability of European in-house counsel to claim legal professional privilege in competition investigations by the European Commission. This decision is likely to cause consternation and controversy amongst in-house lawyers across Europe as it was hoped that the ECJ might take the opportunity to change the law in this area. This note considers the scope of the ruling as well as reviewing, by way of background, the basic principles of privilege under English law.

Basic Principles

The rationale for legal professional privilege is to enable lawyers to advise their clients in confidence. If a document is privileged, it does not need to be disclosed to the court or the opposing party in any litigation. Under English law, legal professional privilege can be divided into two categories:

1. Legal Advice Privilege

   This covers confidential communications made between a lawyer and his client for the purpose of seeking or giving legal advice. Litigation need not have been threatened or contemplated at the time when the advice was sought or given.

2. Litigation Privilege

   This privilege covers a wider category of communications, but only in circumstances where litigation is contemplated. If it is, the privilege covers not only communications between the litigant and his lawyer, but also communications between the lawyer and a third party, or between the litigant and a third party, provided that the dominant purpose of such communications is to give or obtain advice with regard to the litigation or to obtain or collect evidence or information for use in it.

   Litigation privilege extends to any proceedings in which parties may be required to give disclosure including high court, county court, and employment tribunal cases, as well as arbitrations.

   English case law has confirmed that privilege extends to employed solicitors and barristers, not just those in private practice. However, this is subject to an important exception in relation to European Commission investigations.

   European Commission Investigations

   There is one important area where in-house lawyers are in a significantly worse position than lawyers in private practice. This relates to the European Commission's power to require production of documents in the course of...