The director of the NMa's legal department recently stated1 that the NMa will not align its legal professional privilege (LPP) practice with the European Court of Justice's Akzo ruling.2 According to the NMa, denying LPP to in-house lawyers would harm their competitive position in regard to external lawyers.
Conflicting LPP regimes
The Dutch rules on LPP differ from the EU rules in the sense that in-house counsel admitted to the Bar – regardless of the country of establishment – enjoy legal privilege. As known in the Akzo ruling the Court of Justice confirmed the 1982 ruling in AM & S3 and clarified that communications between in-house counsel and companies remain unprotected by LPP in European Commission investigations, regardless of whether the in-house counsel is a member of the Bar.
The NMa is of the view that without LPP, an in-house lawyer would no longer qualify as a viable competitor for external lawyers4 and therefore has retained LPP for in-house lawyers. As a result, conflicting LPP regimes remain after Akzo depending on the capacity in which the NMa conducts an investigation. For instance, if NMa officials conduct investigations on the basis of Dutch competition law, Dutch national rules apply and the correspondence with both in-house and external counsel is covered by LPP. The same applies to investigations by the NMa at the request of the Commission or a competition authority of another Member State.5 However, if NMa inspectors only assist the Commission officials, EU rules apply6 and correspondence with in-house counsel has no LPP coverage. 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. In this context, the NMa provided the following overview:
Click here for table.
LPP in practice
The NMa's policy with regard to LPP protection is laid down in its Procedure in relation to the Inspection and Copying of Analog and Digital Data and Documents7. Companies can claim LPP for analogue documents during the on-site investigation. The NMa official will want to verify this claim by skimming through the document. However, in case of a dispute on LPP coverage or if the company refuses to allow NMa officials to skim through the document, a “sealed envelope” procedure similar to that known from EU case law8 applies. The NMa official will place the document in a sealed envelope and hand it to an independent NMa official, the “LPP officer”. This procedure also applies to digital data, except if it is technically impossible to separate the privileged digital data from the other data sets.9 The company subsequently has 10 business days to substantiate its LPP claim to the LPP officer for the analogue and digital data in the sealed envelope. If the LPP officer is not convinced of the validity of the claim, the company has another 5 working days to provide a more detailed explanation. If the LPP officer remains unconvinced, the data and documents in question will be provided to the NMa case team within 5 working days. In these 5 additional working days, the company can bring the matter before a court in interlocutory proceedings.
According to the NMa, the LPP officer appears a more efficient and less time-consuming solution to resolve LPP disputes than the European Commission's procedure, as the latter procedure can take years.10 However, the big difference with the European Commission's procedure is that the NMa's LPP officer – part of the NMa and not an independent court body – will review the contents of the documents in the envelope before deciding on the LPP claim, whereas the envelope in the European Commission's procedure remains sealed during its decision on the validity of the LPP claim. It is only at the European General Court that the envelope sealed during a Commission dawn raid will be opened to review the actual contents of the documents, unless the company decides not to challenge the Commission's decision or the time period during which an appeal can be lodged expires. It seems the latter procedure at an independent court will likely be preferred by most companies over the NMa's "fast track" option.