The extent and criteria for the EU LPP, set out by the Court of Justice of the EU (CJEU), have been subject to considerable attention in the past four decades, following the 1982 AM&S judgment and, more recently the 2010 judgment in Akzo Nobel. This is because the scope of the EU LPP is much narrower than in some jurisdictions and does not apply to communications between in-house lawyers and their client (company) in the EU competition investigations.
The first case that addressed the issue of the LPP for in-house lawyers in the EU and set out the principles for determining the EU LPP was AM&S v Commission (C-155/79). The Court ruled that the LPP applied to communications between lawyers and their clients as long as ‘such communications are made for the purposes and in the interests of the client’s rights of defence’ and ‘they emanate from independent lawyers, that is to say, lawyers who are not bound to the client by a relationship of employment’ (paragraph 21). These criteria were further expanded in Hilti v Commission (T-30/89) where the Court stated that the LPP also applies ‘to internal notes which are confined to reporting the text or the content of those communications for the purpose of distributing them within the undertaking and submitting them for consideration by managerial staff.’
The most recent case concerning the extent of the EU LPP is Akzo Nobel (C-550/07) where the Court upheld the principles set out in AM&S and follows the Advocate General in her opinion by stating that ‘[a]n 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. Consequently, an in-house lawyer is less able to deal effectively with any conflicts between his professional obligations and the aims of his client.’ (paragraph 41)
This situation differs substantially from that in the UK in general and particularly in England and Wales where in-house lawyers enjoy the same privileges as their counterparts in private practice. In Alfred Crompton Amusement Machines, Lord Denning said that salaried legal advisers are ‘regarded by law as in every aspect in the same position as those who practice on their own account. The only difference is that they act for one client only, and not for several clients…’ He went on to state that he has ‘always proceeded on the basis that the communications between the legal advisers and their employer (who is their client) are the subject of legal professional privilege.’ He further specified that the LPP only applies to communications made in a capacity of a lawyer.
Akzo Nobel has attracted considerable attention of the legal community. The Council of Bars and Law Societies of Europe (CCBE), the Netherlands Bar, the European Company Lawyers Association, Association of Corporate Counsel and International Bar Association (IBA) were granted leave to intervene in the case in support of a wider scope of the LPP.
It must be said, however, that not all national courts followed the CJEU judgment, especially in purely national situations. In 2013, the Belgian Court of Cassation ruled that the documents drafted by in-house counsel were privileged and as such could not be seized and examined by the Belgian Competition Authority (case against Belgacom). In the same year, the Supreme Court of the Netherlands in Anwar v. Fairfield Greenwich Ltd distanced itself from the CJEU reasoning and ruled that Akzo would not apply in purely national competition investigations (see overview).
Also, there are other arguments that are brought against the strict criteria set out in Akzo by the CJEU. Recently, Julia Holtz, Director of Competition at Google argued that the judgment did not take the judicial landscape into account, notably following the adoption of Regulation 1/2003 and an increased significance of human rights in the Community law after the adoption of the Lisbon Treaty. In the first case, the companies were put in charge of self-assessing their compliance with Article 101(3) TFEU which meant devoting larger resources to in-house legal departments. Their efforts and their effectiveness, however, risk being undermined by the current scope of application of the LPP. In the second case, the new Charter of Fundamental Rights (CFR) and the EU’s planned accession to the European Convention on Human Rights (ECHR) resulted in a debate on the nature of antitrust sanctions imposed by the Commission. The Commission acknowledged that the fines would be of criminal nature under the ECHR but they remain of administrative one under the Treaties and the procedure leading to their imposition fulfils the criteria set out by the ECHR. It is not clear, however, whether the current restrictive scope of LPP could be maintained in light of rules on due process.
Finally, Justine Stefanelli pointed out at another element of the Akzo Nobel judgment, i.e. the exclusion of the application of privilege to communications by lawyers qualified outside the European Economic Area (EEA). In her view, this exclusion is problematic given the rise in international business transactions and cross-border investigations and the differences between the laws governing privilege and disclosure.
