In P Akzo Nobel Chemicals Ltd and Akcros Chemicals Ltd v European Commission C-550/07, the European Court of Justice (ECJ) has dismissed an appeal by Akzo Nobel Chemicals Ltd and Akcros Chemicals Ltd against the decision of the General Court in 2007 that advice given by an in-house lawyer is not protected by legal privilege in EU competition cases.

BACKGROUND

In 2003, the Commission ordered Akzo and Akcros to submit to an investigation of possible anti-competitive practices. The Commission attended their offices and seized various documents, including two e-mails between the Director General of Akcros and a Dutch lawyer—a member of the Netherlands Bar—employed in the legal department in the United Kingdom.

In 2007, the Court of First Instance, as it then was, found these emails did not attract legal privilege because the lawyer in question was in-house. Akzo and Akcros appealed this finding to the ECJ.

DECISION

Akzo and Akcros made a substantial number of arguments before the ECJ on the question of legal privilege. In summary, the ECJ considered that, despite an in-house lawyer’s membership of the Bar or Law Society and the professional ethics codes to which he/she is bound, an in-house lawyer does not enjoy the same degree of independence from his/her employer client as a lawyer working in an external firm does in relation to the client. In particular, the ECJ said, an in-house lawyer, because of his/her position as an employee of the client, could not ignore the commercial strategies pursued by the employer and this necessarily affected his/her ability to exercise professional independence.

Further, as the original Court had found, there was still a large number of Member States that excluded correspondence with in-house lawyers from protection. Some Member States did not even permit in-house lawyers to be admitted to a Bar or Law Society and, accordingly, did not recognise them as having the same status as lawyers working in private practice. Accordingly, the appeal failed.

COMMENT

Although this decision only applies to the status of documents available to the Commission when carrying out investigations in cases of alleged infringement of competition law, the decision has wide implications, as the categories of documents relating to potential breaches of competition law are several and varied. Companies will now always have to consider whether the advice they are seeking could be seen as relevant to a competition point of law if they wish to keep any such advice privileged.