The European Court of Justice has ruled that communications with in-house counsel are not subject to legal professional privilege in cartel investigations carried out by the European Commission, including dawn raids.
In Akzo Nobel Chemicals Ltd And Akcros Chemicals Ltd V European Commission Advocate General Juliane Kokott confirmed that confidential communications between companies and their in-house lawyers should not, in Commission investigations, attract the same professional privilege as communications between companies and outside counsel.
Privilege will only attach to communications with independent external lawyers in relation to clients' rights of defence. The position under EC law is therefore different from that throughout the UK where privilege attaches to internal client communications with internal lawyers in the same way as communications with external lawyers.
The reason given by the European court is that in-house lawyers are not fully independent of the company in which they work. Although presently there remains a distinction between the common law and other jurisdictions, the danger is that this decision opens the floodgates and that all communications between a company and its in-house legal team may be under threat of exposure in the event of subsequent proceedings.
Tim Constable comments: It is not clear how far-reaching this decision will prove to be, but for in-house counsel the safety play for more sensitive legal communications could be to copy in external legal advisers from the start to ensure that privilege and confidentiality are maintained.
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