UK: ECJ Rules Against Widening of Legal Professional Privilege for In-House Lawyers

Last Updated: 15 September 2010
Article by Guy Pendell and Will Turner

The European Court of Justice ("ECJ") has today given its widely anticipated decision on the appeal of the 2007 General Court judgment in Akzo Nobel Chemicals Ltd and Akcros Chemicals Ltd v European Commission.  The ECJ followed the Advocate General Kokott's Opinion of 29 April 2010, in finding that legal professional privilege ("LPP") should not be extended to internal communications with in-house lawyers in relation to European Commission ("EC") competition investigations.

The decision reinforces long-standing jurisprudence on the scope of LPP in EC competition cases, namely, that any communications between a company and its in-house lawyers which relate to compliance with EU competition law, are not protected by LPP and are therefore subject to seizure by the EC.  This decision will be a blow to in-house lawyers and various professional bodies who intervened in the case.

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On 17 September 2007, the General Court (then known as the Court of First Instance of the European Union) rejected Akzo Nobel Chemicals Ltd and Akcros Chemicals Ltd's (the "Applicants") claim that the EC had infringed their LPP, in 'forcing' the disclosure of certain documents prepared by their in-house lawyers during the course of a competition dawn raid in 2003.

The General Court, despite acknowledging that preparatory documents could in some circumstances be protected by LPP, rejected the claim that the documents were protected by LPP, as their main purpose was not to seek external advice. Further, it held that the concept of independence, as established by the case of AM&S Europe Limited v European Commission ("AM&S"), meant that LPP would not cover advice from a lawyer in a relationship of employment with its clients.

The Applicants appealed, seeking an order that the General Court's decision should be set aside insofar as it rejected the applicability of LPP for certain emails between the general manager of Akcros Chemicals Ltd and its in-house lawyer.

The key elements of the decision are summarised below, click here for the decision of the ECJ.

The ECJ's Decision

The Applicants contended that the criterion established in AM&S that a lawyer must be independent in order for his or her communications to be afforded the protection of LPP, should not be interpreted so as to exclude in-house lawyers. The Applicants argued that the rules of professional ethics and discipline applicable to an in-house lawyer, paired with the guarantees enjoyed by an 'advocaat in dienstbetrekking' (an enrolled Dutch lawyer, as was the position of the in-house lawyer in this case), made the employment relationship fully compatible with the concept of an independent lawyer.

However, the ECJ rejected this view and held that the requirement of independence, as established in AM&S, means the "absence of any employment relationship between the lawyer and the client". Further, it held that as regards the professional obligations relied on by the Applicants in order to demonstrate the in-house lawyer's independence, "the fact remains that they [in-house lawyers] are not able to ensure a degree of independence comparable to that of an external lawyer". The ECJ also considered that an in-house lawyer would not be able to ignore the "commercial strategies" pursued by its employer, which would invariably affect his or her ability to exercise professional independence.

As such, the ECJ rejected this ground of appeal on the basis that both the in-house lawyer's economic dependence on its employer and any other "close ties" with their employer would inevitably affect that lawyer's impartiality.

The ECJ also dismissed the other arguments put forward by the Applicants, one of which being that in refusing to apply LPP to correspondence exchanged with an in-house lawyer, the Applicants' rights of equal treatment (as enshrined in EU law) would be violated. In this regard, the ECJ recited the established case law principle that "comparable situations must not be treated differently and that different situations must not be treated in the same way", and reiterated the fundamental differences between the position of an 'independent' lawyer, and that of an in-house lawyer.

The ECJ also rejected the notion put forward by the Applicants that the status of enrolled in-house lawyers has developed since AM&S at both a national and EU level, in such a way so as to reflect a trend of in-house lawyers being granted the benefit of LPP.


This decision closes a chapter in an area of law that has been, and will remain, subject to much discussion and debate. Indeed, there has previously been concern from some stakeholders that the refusal by the ECJ to widen the scope of LPP to protect competition-related communications with in-house lawyers at EU level could pre-empt a harmonisation of such measures at national level. Whether this will occur remains to be seen.

Companies should take particular care when dealing with competition law issues. Although communications between a company and its in-house legal team may be protected by LPP where a domestic competition investigation is commenced, those same documents may be subject to seizure by the EC should it commence its own competition investigation. Therefore, where legal advice is sought in relation to competition issues, companies should instruct external counsel at an early stage.

In the context of non-competition related advice, communications between companies and their in-house legal teams will remain subject to the existing domestic law relating to LPP. Whilst the position varies across Europe, in many member states the position is significantly broader than the position adopted in Akzo Nobel.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 14/09/2010.

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