No privilege for in-house counsel

Acourt ruling on legal professional privilege during EU cartel investigations has sparked concern across the legal profession.


In Akzo Nobel Chemicals and Akcros Chemicals v European Commission (Case C-550/07 P), the ECJ ruled that internal communications by in-house lawyers are not protected by legal professional privilege in EU competition law investigations.

Sir Christopher Bellamy QC, senior consultant at Linklaters, said: “This is a disappointing judgment. In modern circumstances the primary enforcer of competition law is often the in-house lawyer. In my view, that role should be strengthened, not weakened.”

Des Hudson, chief executive of the Law Society, said in-house lawyers were “the front-line guarantor of compliance” and companies would only ask difficult or sensitive questions when they knew they could do so in confidence.

European Commission officials seized correspondence between employees and in-house counsel during a 2003 anti-competitive investigations raid on Akzo Nobel’s Manchester offices. The company unsuccessfully argued that the documents were protected by privilege.

Geraldine Elliott, head of commercial litigation at Reynolds Porter Chamberlain LLP, said companies will wonder why European law trumps long-held national legal traditions and creates this kind of anomaly: “The court concluded that as a result of the in-house counsel’s ‘economic dependence’ on his employer he does not enjoy a level of professional independence comparable to that of lawyers in private practice ... In-house counsel at businesses where European competition investigations are a realistic prospect will have to be very careful about writing down anything that could be used against the company in the event of an investigation,” she added.

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