Privilege does not extend to in-house or foreign lawyers in EU antitrust cases says Advocate General of European Court of Justice
On 29 April, the Advocate General of the European Court of Justice (ECJ) issued an Opinion that legal privilege does not extend to in-house or foreign (e.g., US) lawyers in the context of EU antitrust investigations. The Advocate General also appeared to cast doubt on the scope of privilege for EU-qualified outside counsel.
This Opinion, issued in the appeal of the landmark case Akzo and Akcros v Commission, affirms existing EU case law. The Opinion is not binding on the ECJ, which will issue its judgment within 3 to 6 months. In most cases, however, the ECJ follows the Opinion of the Advocate General.
If the ECJ follows this Opinion, advice from in-house and foreign lawyers will not be protected from disclosure to the European Commission and could be seized in the context of so-called "dawn raids", and used by the Commission to build its cases. Indeed, it is common practice for Commission officers to inspect the offices of in-house lawyers during dawn raids. One counter strategy has been to increase the amount of advice given orally by in-house counsel and the involvement of EU- qualified outside counsel in sensitive projects and the preparation of compliance materials.
The Advocate General rejected the extension of privilege to in-house lawyers "today or in the foreseeable future" on the basis that in-house lawyers were not sufficiently "independent" as they were in a position of "complete economic dependence" on their employers (paras 61, 69 and 104). She added that privilege arises not only from the client's rights of defense, but is also an expression of the lawyer's status as "an independent legal adviser and 'collaborat[or] in the administration of justice'" (para 148). She found there was no trend towards greater recognition of privilege for in-house lawyers across the EU, as legal privilege does not extend to in-house lawyers under national laws in at least 14 of the 27 Member States of the EU, and the law is unclear or privilege limited in a further 7. Therefore, she found that in-house privilege could not be considered a general principle of EU law (paras 87 to 113).
In addition, the Advocate General noted that granting privilege to foreign lawyers not members of a bar within the EEA would "not under any circumstances be justified" as there was "no adequate basis for the mutual recognition of legal qualifications and professional ethical obligations" (paras 189 and 190).
More generally, the Advocate General casts doubt on the scope of privilege under EU law stating "much of the internal corporate legal advice given under compliance programmes is general in nature and has no specific connection with the current or future exercise of the rights of defence" (para 120). This could imply that privilege exists for the purposes of EU law only where litigation (or a Commission investigation) is in progress or at least contemplated. If such a result was transposed in U.S. law, this would abolish attorney-client privilege protections, leaving the work-product doctrine as the only protection (and only for communications with outside counsel).
The full title of the ECJ case is Case C -550/07 P Akzo Nobel Chemicals Ltd and Akcros Chemicals Ltd v European Commission.
Click here for the press release of the Court [PDF].
Click here for the Advocate General's Opinion [PDF].
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