Why Your Internal Communications May Be At Risk

OVERVIEW

The European Court of Justice (the "ECJ") recently released a landmark decision, Akzo1, confirming that communications between in-house counsel and their internal clients are not protected under European competition law by legal professional privilege, otherwise known in Canada as solicitor-client privilege.

The ECJ's decision in Akzo transcends the boundaries of Europe. It has profound global implications with respect to how legal advice is sought and received in the area of anti-trust/competition law. For example, companies faced with cartel exposure can be subject to worldwide enforcement activity, a multiplicity of domestic amnesty programs and a surge of complex civil litigation. This has given rise to an integrated global team of in-house and external lawyers working on behalf of an implicated company.

The onus is now squarely on companies – notwithstanding their location - to take affirmative steps to protect their legal communications. Companies, in conjunction with their in-house and external lawyers, need to carefully structure their global legal communications in order to maximize the application of privilege over legal communications and documents.

AKZO

Background Facts

In 2003, the European Commission (the "Commission") ordered Akzo Nobel Chemical and its subsidiary Akcros Chemicals to submit to an investigation aimed at seeking evidence of possible anti-competitive practices. The Commission conducted searches or 'dawn raids' at the premises of Akzo Nobel and Akcros. In so doing, the Commission seized two emails exchanged between the managing director and an in-house lawyer for Akzo Nobel, amongst other documents. The in-house lawyer was an Advocaat of the Netherlands Bar. The Commission analyzed the two e-mails and decided that they were not protected by legal professional privilege.

Akzo Chemicals claimed that the two emails should be protected by legal professional privilege. Their claim was rejected by the Commission2, the General Court (previously named the Court of First Instance)3 and most recently by the European Court of Justice.

The ECJ Decision

Akzo Chemicals, along with a number of intervenors (including the British, Irish and Dutch governments and a number of European Lawyers' and Bar Associations), claimed that the General Court wrongly refused to protect the two emails with legal professional privilege.

They encouraged the ECJ to revisit its longstanding decision in AM & S Europe v Commission4 regarding legal professional privilege. In AM & S, the ECJ held that exchanges between a lawyer and its client are protected by legal professional privilege at the EU level subject to two...