No Privilege to be an In-House Lawyer in the European Union

On 14 September 2010, the European Court of Justice (ECJ) refused to extend legal professional privilege (LPP) to internal company communications with in-house lawyers in the case of Akzo Nobel Chemicals and Akcros Chemicals v Commission and Others (C-550/07 P, 14 September 2010).

The ECJ's decision confirms communications between a company and its in-house lawyers are not protected by LPP in relation to certain investigations carried out by organs of the European Union. Currently, the scope of the decision is limited to litigation arising from the Treaty of the European Union, and the common law position in European Union member states is not affected. Companies that do business in Europe will be affected by the decision if they receive a notice from the European Commission regarding anti-competitive issues.

Background

In 2003, Akzo Nobel Chemicals Limited (Akzo) and Ackros Chemicals Limited (Ackros) became the subject of an investigation by the European Commission on cartel conduct. The investigation was carried out by Commission officials assisted by representatives of the British Office of Fair Trading at the companies' headquarters in the UK.

During the course of the investigation the Commission seized a number of documents, including two emails exchanged between the Director General of Ackros and Akzo's coordinator for competition law (i.e. a member of Akzo's in-house team) referred to as "Mr S" in the judgment. Mr S, in addition to being employed as a lawyer in the legal department of Akzo, was also enrolled as a member of the Netherlands Bar.

In May 2003, the Commission rejected a claim made by Akzo and Ackros that the emails were subject to LPP. The companies appealed to the General Court of the European Union, which dismissed their claim in September 2007. Subsequently, Akzo and Ackros appealed to the ECJ.

Legal Professional Privilege in the European Union

The test for LPP within the European Union as set out in Case 155/79 AM & S Europe v Commission [1982] ECR 1575 consists of the following two elements:

legal advice must be requested and given for the purposes of the "client's rights of defence" i.e. it must be related to actual or anticipated litigation; and the exchange must emanate from "independent lawyers," that is to say "lawyers who are not bound to the client by a relationship of employment." Arguments advanced by Ackros and Akzo

The arguments advanced by Ackros and Akzo and the ECJ's responses can be summarised as...