In the context of international cartel investigations by
competition law authorities, a recent decision of the European
Court of First Instance highlights the differences in the
treatment of legal privileges in other jurisdictions.
In Akzo Nobel Chemical Ltd.& al. v.
Commission of the European Communities, the court had
to determine whether certain documents seized by the Commission
in the context of a competition law investigation were covered
by the "legal professional privilege," also referred
to as solicitor–client privilege. These documents
consisted of the following:
a memorandum from a general manager to one of his
superiors, containing information gathered from employees for
the purpose of obtaining outside legal advice in connection
with the company's competition law compliance program;
the memo bore handwritten notes referring to contacts with
outside counsel, including his name;
the general manager's handwritten notes from
discussions with employees, which were used to prepare the
above memorandum; and
two e-mails exchanged between the general manager and a
lawyer from the company's legal department.
The court pointed out that European law recognizes the right
of every person to consult, without constraint, a lawyer whose
profession entails giving independent legal advice. The court
also acknowledged that the protection of the confidentiality of
written communications between lawyer and client is an
essential corollary to that right. This means not only that the
Commission cannot use privileged documents as evidence in a
decision imposing a penalty, but that the Commission must
refrain from reading the contents of documents over which
privilege is claimed until a final decision is made. However,
because privilege is an exception to the Commission's
powers of investigation, it must be construed restrictively.
Thus, the person claiming privilege bears the burden of proving
that the protection actually applies.
The court accepted that preparatory documents, such as
working documents or summaries which present the information
necessary for the lawyer to understand the context, nature and
scope of the facts for which legal assistance is sought, could
be privileged even if they were not exchanged with a lawyer or
not created for the purpose of being sent physically to a
lawyer. However, privilege over preparatory documents will be
recognized only if such documents were drawn up
exclusively for the purpose of seeking legal advice.
The mere fact that a document has been discussed with a lawyer
is not sufficient. The court held that the general
manager's memorandum and handwritten notes, which were not
addressed to a lawyer and which made no mention of seeking
legal advice, did not meet that test and were not
As for the e-mails exchanged between the general manager and
in-house counsel, the court reaffirmed its controversial
jurisprudence denying privilege to communications with in-house
lawyers. The court held that to attract privilege, legal advice
must be provided "in full independence," which means
by a lawyer who is a third party, structurally, hierarchically
and functionally, in relation to the corporation receiving the
advice. A lawyer bound to his or her client by a relationship
of employment does not meet this requirement. As a result, only
communications with outside lawyers for the purpose of seeking
legal advice are protected by privilege.
McCarthy Tétrault Notes:
In the context of increasing globalization, it is useful to
know the extent to which communications with lawyers will be
protected in various jurisdictions. Despite heavy criticism,
European authorities continue to deny protection to
communication with in-house lawyers, and this should be kept in
mind in all internal communications. As for documents that may
be used in seeking legal advice, the European approach is more
restrictive than Canadian law in requiring that such documents
be prepared for the exclusive purpose of seeking legal advice.
However, since in both cases the burden of establishing
privilege falls on the corporation, the Akzo Nobel
decision reinforces the importance of clearly identifying as
privileged all documents which are prepared for the purposes of
seeking legal advice.
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general guide to the subject matter. Specialist advice should
be sought about your specific circumstances.
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