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Legal professional privilege does not apply to communications made between an in-house lawyer and employer clients, the European Court of First Instance has ruled.
The decision in Akzo Nobel Chemicals Ltd v European Commission has been condemned by the profession, which says it will harm the interests of improving business practice.
Law Society chief executive Des Hudson says: “It is an outrageous suggestion that the advice given by solicitors, who are bound by high professional standards, should not be afforded the same level of protection merely because of their employed status. This inequality between members of the same profession is unsustainable and it is disappointing that the court did not set this straight.”
He adds that the decision contradicts the European Commission’s ambition to increase the culture of compliance within European companies.
“Unrestricted access to in-house counsel provides informed and cost effective legal assistance in ensuring such anti-trust compliance,” he says.
Michael Frisby, dispute resolution partner at Stevens & Bolton, says: “As a result of this decision, the widespread practice of companies sourcing competition law advice externally is likely to continue for the foreseeable future.”
The Court of First Instance followed the European Court of Justice’s ruling in AM & S Europe Ltd v EC Commission and held that legal privilege protection only applied to the extent that the lawyer is independent, ie not bound to his client by a relationship of employment.
The case arose after the Commission carried out a dawn raid at the company’s UK premises and seized and made copies of numerous documents. The court rejected the claimant’s contention that legal professional privilege covered documents—in this case e-mails—exchanged between a member of the legal department of Akzo Nobel and the general manager of its subsidiary, Akcros Chemicals.
