For decades, English lawyers have lobbied the EU to try to have the law altered so that legal advice from an employed in-house lawyer was regarded as "privileged” (not to be seized or seen by EU investigators in competition law cases) in the same way the advice of an external lawyer is so protected. In September 2010 it was confirmed yet again that there is no such protection for internal legal advice. This means in-house lawyers need to continue to be careful what they say and, in particular, write in internal advice.
Leanne O'Leary of Armitage Sykes Solicitors said
"During raids in the UK in 2003 documents were seized in this case from Akzo. During the examination of the documents seized a dispute arose in relation, in particular, to copies of two e-mails exchanged between the managing director and Akzo Nobel's coordinator for competition law, an Advocaat of the Netherlands Bar and a member of Akzo Nobel's legal department employed by that company. After analysing those documents, the Commission took the view that they were not covered by legal professional privilege. The companies challenged the finding. The Court looked the older case of AM & S Europe v Commission, holding that it is subject to two cumulative conditions. First, the exchange with the lawyer must be connected to 'the client's rights of defence' and, second, that the exchange must emanate from 'independent lawyers', 'lawyers who are not bound to the client by a relationship of employment'. "The Court said in-house lawyers are not independent enough as they are employed. The Court's press release said "The Court considers that an in-house lawyer, despite his enrolment with a Bar or Law Society and the fact that he is subject to the professional ethical obligations, does not enjoy the same degree of independence from his employer as a lawyer working in an external law firm does in relation to his client. Notwithstanding the professional ethical obligations applicable in the present case, an in-house lawyer cannot, whatever guarantees he has in the exercise of his profession, be treated in the same way as an external lawyer, because he occupies the position of an employee which, by its very nature, does not allow him to ignore the commercial strategies pursued by his employer, and thereby affects his ability to exercise professional independence. Furthermore, an in-house lawyer may be required to carry out other tasks, namely, as in the present case, the task of competition law coordinator, which may have an effect on the commercial policy of the undertaking. Such functions cannot but reinforce the close ties between the lawyer and his employer.” The appeal was dismissed.
Under UK competition law, however, in-house lawyers' advice IS privileged. If you need advice in this area or want an external law firm to provide you with privileged legal advice on competition law, call Leanne O'Leary on 01484 550420. -------
Notes 1. See http://curia.europa.eu/jcms/upload/docs/application/pdf/2010-09/cp100090en.pdf
2. For UK competition law see www.oft.gov.uk
Registered in England and Wales. Registered No. OC313337