Guest Blogger Ana Yankova: The Court Confirmed the Scope of Legal Professional Privilege in the Field of EU Competition Law

I am glad to introduce the first post by a guest blogger on this blog. Ana Yankova has graduated from the European Studies Department of the Sofia University “St. Kliment Ohridski” and has genuine interest in ECJ case law.

By its judgment from 14.09.2010 the Court dismissed the appeal of Akzo Nobel and Akcros against the 2007 judgment of the Court of First Instance (now ‘ the General Court’) and confirmed the constant case law which excludes internal company communications with in-house lawyers from the scope of legal professional privilege.

The appellants based the grounds of appeal on two main arguments.

First, according to Akzo Nobel and Akcros the Court of First Instance incorrectly interpreted the principle of legal professional privilege, declared by the Court of Justice of the European Communities in AM & S/Commission. The Court held that the confidentiality of written communications between lawyers and clients should be protected by Community law and stated that that protection was subject to two cumulative conditions: (1) such communications are made for the purposes and in the interests of the client’s rights of defence and (2) the documents emanate from independent lawyers, that is to say, lawyers who are not bound to the client by a relationship of employment.

Taking into account the arguments of the appellants the Court came to the conclusion that “an in-house lawyer, despite his enrolment with a Bar or Law Society and the professional ethical obligations to which he is, as a result, subject, 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”. The main reasons put forward are the in-house lawyer’s economic dependence and the close ties with the employer that render professional independence comparable to that of an external lawyer impossible.

The second main argument of Akzo Nobel and Akcros is an alleged evolution of the national legal systems. According to the appellants, “notwithstanding the lack of a uniform tendency at national level, European Union law could set legal standards for the protection of the rights of defence which are higher than those set in certain national legal orders”. Akzo Nobel and Akcros claimed that the significant recent developments in the legal landscape necessitated broadening of the scope of legal professional privilege in the field of EU Competition law.

By this argument the appellants summarize the long-lasting criticisms of the judgment in AM & S/Commission. In its findings the Court refers to the comparative examination conducted by the Court of First Instance which shows that a considerable number of Member States still exclude correspondence with in-house lawyers from protection under legal professional privilege and do not allow in-house lawyers to be admitted to a Bar or Law Society. That is the reason why the Court held that “no predominant trend towards protection under legal professional privilege of communications within a company or group with in-house lawyers may be discerned”. In the Court’s view the evolution which took place during the years following the judgment in AM & S/Commission is not capable of justifying a change in the case-law and recognition for in-house lawyers of the benefit of legal professional privilege.

Regretfully, in this case there was no opportunity for the appellants to draw the attention of the Court to another important issue in regards to the scope of legal professional privilege – the European Union law does not protect communications between a client and a lawyer registered in a third country. Some commentators underline that this limitation is applicable to lawyers from the States affording analogous protection to EU lawyers.

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