Court confirms no privilege for in-house lawyers in EU competition cases


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The case stems from an on-site investigation by the European Commission ("Commission"), assisted by the Office of Fair Trading, into a suspected cartel in the plastic additives sector. As part of this investigation, documents were taken from Akzo Nobel Chemicals ("Akzo") and Akcros Chemicals ("Akcros") in 2003.

During the on-site inspection, a dispute arose over whether certain documents were subject to legal professional privilege under EU law, which meant that the Commission would not be able to examine them. Following a long discussion, the investigating authorities were allowed to examine the documents briefly. As a result, the Commission decided that the documents were not legally privileged.

Akzo and Akcros challenged the Commission’s decision before the General Court (formerly the Court of First Instance). A number of national/European bar and other legal associations also intervened in the proceedings in support of the applicants. In June 2007, the General Court confirmed that legal professional privilege does not extend to documents connected with advice from in-house counsel. For privilege to apply, communications had to be with an independent EU-qualified lawyer and related to the client’s right of defence. This had been the established position under EU jurisprudence since the early 1980s.

Akzo and Akcros, and the interveners at first instance, subsequently appealed the General Court’s decision to the ECJ, arguing that the criterion of independence cannot be interpreted so as to exclude in-house lawyers, particularly in the light of professional ethical obligations under local bar rules. However, Advocate General Kokott gave an opinion earlier this year in which she agreed with the General Court that in-house lawyers did not enjoy the same level of independence as external counsel. (An Advocate General is an advisor to the ECJ whose role is to consider the arguments to assist the court in reaching its judgment. Although the Advocate General’s opinion does not bind the court, it is often taken into consideration by the ECJ in reaching judgment.)

The ECJ’s judgment

The ECJ has today upheld the judgment of the General Court and rejected the appellants’ claim for privilege, notwithstanding the numerous interventions from professional bar and other legal associations. In doing so, the ECJ has followed closely the approach of the Advocate General.

Central to the ECJ’s finding is the reasoning that, as a result of the in-house lawyer's economic dependence on his/her employer, and the close ties associated with the employment relationship, such a lawyer does not enjoy a level of professional independence comparable to that of an external lawyer. Moreover, the ECJ has affirmed the General Court’s view that the status of in-house lawyers and their respective communications across the legal regimes of the EU Member States is currently too disparate to warrant granting in-house lawyers the benefit of legal professional privilege.

Accordingly, the ECJ has held that legal professional privilege in competition cases did not extend to documents connected with advice from in-house counsel, and that this is consistent with the appellants’ fundamental rights, including the rights of defence.

Wider impact

This case reiterates the longstanding rules on legal professional privilege in the context of EU competition investigations conducted by the Commission and reflects the ECJ’s general concern to ensure the uniform interpretation and application of these rules at EU level. However, outside the context of EU competition investigations, national rules may continue to afford privilege to in-house lawyers’ advice, as they do, for example, in the United Kingdom.

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