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Media Briefing Note: Judgment in Landmark Legal Privilege case expected - Akzo Nobel Chemicals Ltd and Akcros Chemicals Ltd v Commission (C-550/07 P)

07 September 2010

LONDON, 7 September 2010 - On 14 September 2010 the Court of Justice of the European Union ("Court of Justice") is due to give its ruling in a landmark case on legal professional privilege under EU law, which could have far-reaching implications for in-house lawyers across the European Union and more generally for the European Commission's (the "Commission") investigative powers.


The case concerns a long-running dispute involving Akzo Nobel about whether communications with in-house lawyers should be protected by legal professional privilege under EU law and, as such, can be withheld from disclosure in a competition investigation.


If the Court of Justice follows a recent opinion of Advocate General Kokott that denied the application of legal professional privilege to communications with in-house lawyers, the court's judgment will be a disappointment to many, including corporate counsel and bar associations who pressed for change.  While the Court of Justice is not bound by an Advocate General's opinion, final judgments tend largely to follow the Advocate Generals' approach.


What is legal professional privilege?


Legal professional privilege is the rule under which communications between lawyers and their clients are treated as confidential and may not be examined or used by third parties, such as competition authorities, without the client's consent. 


The European Union and the individual EU Member States have a variety of different privilege regimes.  Some Member State regimes recognise privilege for in-house lawyers, others do not.


Under EU law, legal professional privilege for outside counsel was recognised by the European Court of Justice in 1982 in the leading case AM&S Europe Ltd. v. Commission (C 155/79) ("AM&S").  However, privilege for in-house counsel was not recognised in this judgment, since the court held that to be privileged, advice must be sought from "an independent lawyer, that is to say one who is not bound to his client by a relationship of employment".  Debate has raged for nearly 30 years regarding what the appropriate definition of "independence" should be, with many in-house lawyers, including bar associations, lobbying hard for the AM&S judgment to be overturned. 


Background to the case


In February 2003, seeking evidence of possible anti-competitive practice, the Commission conducted a dawn raid at the office of Dutch-based pharmaceuticals manufacturer Akzo Nobel.  A dispute arose concerning the Commission's right to review and seize a number of documents, including email exchanges involving Akzo's in-house lawyer, who was a member of the Dutch bar. 


Akzo appealed the seizure of the documents to the European Court of First Instance (now the "General Court").  The court ruled that legal professional privilege does not cover in-house counsel communications, even where in-house counsel is a member of a Member State bar association (in this case, the Dutch Orde van Advocaten).


The Advocate General's Opinion


On 29 April 2010, Advocate General Kokott gave an opinion recommending that the Court of Justice dismiss the appeal in its entirety.  In summary, the Advocate General:


·                     did not consider that the General Court erred in its application of existing case law;

·                     confirmed the view that employed, enrolled in-house lawyers are not sufficiently "independent" from their employers (compared with external lawyers) to justify the extension of legal privilege to in-house lawyers;

·                     did not believe that the current EU legal position should be changed due to changes in legal practice or the legal framework;

·                     did not accept that depriving in-house lawyers of the benefits of legal professional privilege amounts to a breach of legal certainty, national procedural autonomy or the rights of defence.


What can we expect from the judgment?


Whilst opinions of the Advocate General are not binding on the court, they are in the majority of cases followed.  It would therefore not be surprising if the Court of Justice followed the Advocate General's opinion.


·                     If the Court of Justice decides to accord privilege to communications with in-house lawyers, this would bring to an end nearly three decades of differential treatment.  This would align the EU law position with the position in some EU Member States.  The law set out above applies only to investigations by the Commission under EU competition law.  When national competition authorities conduct their own investigations, they will apply their own national rules on privilege.  For example, in the UK, communications between in-house lawyers and their (employer) clients currently benefit from legal privilege.  However, in the majority of EU Member States, there is no explicit recognition of legal privilege in respect of communications with in-house counsel.

·                     If the Court of Justice decides to maintain the status quo enshrined in the AM&S case, this is most likely to entrench the position for some years to come.

·                     It is not inconceivable that the Court might find a half-way house and set out conditions that an in-house lawyer would need to meet for legal privilege to be accorded to his or her communications.  However, this would itself add another layer of complexity into a difficult area of law.



Hogan Lovells’ Antitrust, Competition and Economic Regulation practice are available to provide legal background on the judgment and its consequences.  Please contact:

Christopher Thomas

Partner in Hogan Lovells' Antitrust, Competition and Economic Regulation


Tel: +32 (2) 62 69 242


Lesley Ainsworth

Partner in Hogan Lovells' Antitrust, Competition and Economic Regulation


Tel: +44 207 296 2181


Suzanne Rab

Of counsel in Hogan Lovells' Antitrust, Competition and Economic Regulation


Tel: +44 207 296 2382


Rachael Droog

Public Relations Coordinator

Tel:  +44 207 296 2780


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