European Court of Justice Upholds Judgment That EU Legal Professional Privilege Does Not Extend to In-house Lawyers

Today the Court of Justice of the European Union ("ECJ") issued its long-awaited judgment in Akzo Nobel Chemicals Ltd and Akcros Chemicals LTD v European Commission (Case C-550/07 P). This case deals with the question whether, in the context of European Commission ("Commission") investigations and proceedings, communications with in-house lawyers are protected by legal privilege. The ECJ held that such communications are not protected. As a result of today's judgment, no communications between the management and employees of a company and its in-house lawyers is protected from search and disclosure in EU investigations and proceedings, including antitrust investigations and raids.

Background

During a dawn raid at the premises of two Akzo affiliates in the United Kingdom in a 2003 cartel matter, Commission officials copied and placed in its file two e-mails exchanged between the general manager of Akcros and a member of Akzo's in-house legal department, who was admitted as a lawyer to the Netherlands Bar. Akzo and Akcros brought a challenge before the General Court, arguing that the communications were protected by legal professional privilege and therefore that the Commission should not be permitted to have access to them and other privileged documents (Cases T-125/03 and T-253/03). The General Court dismissed this challenge on the basis of an earlier ECJ ruling on the scope of legal professional privilege.

ECJ judgment in Akzo

The ECJ rejected Akzo's arguments as follows:

"An in-house lawyer, despite his enrolment with a Bar or Law Society and the professional ethical obligations to which he is, as a result, subject, does not enjoy the same degree of independence from his employer as a lawyer working in an external law firm does in relation to his client. Consequently, an in-house lawyer is less able to deal effectively with any conflicts between his professional obligations and the aims of his client." (Akzo, paragraph 45)

The authority relied upon by the General Court in rejecting Akzo and Akcros' challenge dates back to the 1982 AM&S case (Case 155/79). In AM&S, the ECJ recognized that the confidentiality of a written communication between lawyer and client must be protected only if (i) the communication has a connection with the exercise of the client's right of defence, that is, it was a "communication" made "for the purposes and interests of the client's rights of defence," and (ii) it is a communication with an independent lawyer...