In September of 2010 the Court of Justice of the EU finally gave its judgment in the case of Akzo Nobel Chemicals Limited and Akcros Chemicals Limited-v-The European Commission.
This is one of the unusual cases in which the opinion that the Advocate General Kokott had issued and was not followed.
This case has now decided not to recognise legal professional privilege for advices given by in house lawyers in EU competition law investigations. This exposes any documentation, correspondence, memos, emails and notes made by such in house lawyers to the discovery process at any future date.
The background to this case was straight forward. The EU commission officials instigated inspection in February 2003 at Akzo’s premises in Manchester. There was a dispute there between certain officials and the Akzo officials over certain documents which the company claimed to be privileged. These documents included a typed memo from the manager of Akcros Chemical Limited to one of his superiors passing on information gathered by him in the course of his internal investigation with other employees for the purposes of obtaining legal advice in relation to competition law together with notes. There were also hand written notes make by the manager during talks with staff, and a couple of emails.
Akzo claimed that these documents were privileged, but the commission challenged this. The commission’s view was backed up by the Court of First Instance in September 2007, which decision was then appealed to the Court of Justice.
The Court of Justice decided the case commenting that an in house lawyer does not enjoy the same degree of independence from his employer as a lawyer working for an external law firm. Accordingly, and in house lawyer is less able to deal with any conflicts between his professional obligations and the business direction of the client.
The former test which had stood for over 30 years was that;
• The relevant communication, be it by way of letter or email, must be made for the purpose of the client’s defence, and;
• The exchange must between the client seeking to rely on professional privilege and an independent lawyer, that is to say a lawyer who does not have a relationship of employment.
That leaves in house lawyers in a difficult position in so far as any documentation that they produce for the purposes of their employment can now be discoverable to the commission. Furthermore, as this decision will generally affect larger companies, there are trans jurisdictional issues which will need to be considered. Often huge companies have legal departments spread throughout the world, but their documents are stored an accessed versus a universal document management system without an analysis of whether those documents are privileged in each of the jurisdictions in which they are accessible. This will lead to considerable work for the in house lawyers to vet those documents and to protect those which should attract privilege.
Beware what you write down!