The European Court of Justice (ECJ) confirmed in today’s Akzo ruling1 that communications between a company and its in-house lawyer are not protected by legal professional privilege (“LPP”) in EU competition investigations.2 As a result, European Commission officials remain authorised to seize and use such communications in their investigation.

The case relates to a Commission investigation into possible anti-competitive practices by Akzo Nobel Chemicals Ltd. and Akcros Chemicals Ltd. (the "applicants"). The Commission carried out a dawn raid at the applicants' premises in 2003. During this dawn raid, a dispute arose between the Commission officials and Akzo's representatives on whether, inter alia, two e-mails exchanged between the General Manager of Akcros Chemicals and an in-house counsel for Akzo Nobel were covered by LPP.

The General Court ruled that the said documents did not satisfy the conditions for LPP protection, since the documents were neither written communications with an independent lawyer or part of an internal note reporting the content of communications with an independent lawyer, nor were they prepared in order to be sent to an independent lawyer.3

In today’s ruling, the ECJ confirmed that there is no reason to extend LPP protection to communications between a company and its in-house counsel. The ECJ reiterates the two cumulative conditions in the AM & S ruling4, according to which the confidentiality of communications between a lawyer and his client is protected provided that such communications (i) are made for the purposes of the exercise of the client's rights of defence and (ii) emanate from independent lawyers, i.e. “lawyers who are not bound to the client by a relationship of employment”.

According to the ECJ, the latter condition implies that LPP does not cover exchanges within a company or group with in-house lawyers. 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. Consequently, an in-house lawyer is less able to deal effectively with any conflicts between his professional obligations and the aims of his client, as he cannot ignore the commercial strategies pursued by his employer.

The ECJ rejected the appellants’ argument that the legal situations in the EU Member States has evolved as such that LPP should be extended to in-house lawyers, by stating that no predominant trend towards protection under LPP of communications with in-house lawyers can be discerned in the legal systems of the 27 EU Member States. The argument that the introduction of Regulation 1/20035 increased the need for in-house legal advice and thus LPP for in-house lawyers was also dismissed by the ECJ. Contrary to the appellants’ claims, the ECJ found that Regulation 1/2003 is not aimed at equal treatment of in-house and external lawyers as far as LPP is concerned, but is intended to reinforce the extent of the Commission’s powers of inspection, in particular as regards documents which may be the subject of such measures.


The ECJ’s ruling clarifies that communications between in-house counsel and companies remain unprotected by LPP, regardless of whether the in-house counsel is a member of the Bar. Even though the ECJ ruling is a re-confirmation of the 1982 ruling in AM & S6, its implications are more far-reaching now than in 1982, particularly as a result of more cooperation between competition authorities within the EU and worldwide.

In the United States, for instance, communications with in-house legal counsel are also covered by LPP. However, the Akzo ruling denying the same LPP protection for in-house counsel during investigations by the European Commission exposes US in-house counsel to the risk of losing LPP coverage. 7

In addition, the problem of conflicting LPP regimes also remains a problem within the EU. For instance, under Dutch national rules, correspondence exchanged with lawyers admitted to the Bar – regardless of the country of establishment – is covered by LPP. As a result, even correspondence exchanged with external lawyers admitted to the Bar in non-EU states and correspondence with in-house lawyers who are admitted to the Bar is covered. Consequently, if NMa inspectors conduct investigations on the basis of Dutch competition law, the Dutch national rules apply and the correspondence with both in-house and external lawyers is covered by LPP. The same applies to investigations by the NMa at the request of the Commission.8 However, if the NMa inspectors only assist the Commission officials, the European rules apply.9 Correspondence with in-house lawyers has no LPP coverage in such event.

It is therefore imperative for companies to verify at the very start of a dawn raid, which authority and, more importantly, in which capacity the authority is conducting the dawn raid to determine the level of LPP protection. Similarly, it is advisable for companies to introduce a general document management policy to avoid accidental disclosure during a dawn raid. Legally privileged materials, including (legally privileged) faxes and e-mails, should be kept separately from other documents in a marked file. In addition, it may be wise to introduce policy rules to avoid cross-disclosure of LPP information in parallel international dawn raids.