The European Court of First Instance (CFI) handed down an important ruling on 17 September 2007 in which it refused to extend the scope of legal professional privilege to communications between parties and their in-house lawyers in the context of EU competition law (Akzo Nobel Chemicals Limited and Akros Chemicals Limited v Commission of the European Communities). The CFI has decided that EU law should continue to follow the 1982 judgment of the European Court of Justice (ECJ) in the case of AM&S Europe v Commission of the European Communities [1983] QB 878. In that case the ECJ held that privilege did not extend to protect internal communications involving in-house lawyers from disclosure during competition investigations by the EU Commission. That protection only applies to communications with "independent" lawyers, which is deemed to exclude lawyers bound by a "relationship of employment".

The CFI refused to extend the scope of privilege beyond the limits established in the AM&S case, despite acknowledging that the protection of communications with in-house lawyers under legal professional privilege is "relatively" more common today among Member States than when AM&S was handed down. The CFI found that there was, nevertheless, insufficient uniformity or a clear majority support among Member States to justify departing from the AM&S decision. In particular, it noted that a large number of Member States still exclude in-house lawyers from the protection of legal professional privilege, and indeed that various Member States have aligned their regimes with the EU system.

The judgment also provides clarification on the procedure to be followed during a Commission investigation and the status of preparatory documents, which it held will be construed restrictively and protected by privilege only when they are drawn up with the exclusive aim of seeking legal advice from an external lawyer.

Comment

In-house lawyers and their companies will no doubt be disappointed at the CFI's refusal to extend the scope of legal privilege to their communications in the context of EU competition law. However, as set out in the attached e-bulletin by our EU and Competition department, which provides the background to the case and more detail about the judgment, the CFI's findings in respect of the procedure to be followed by the Commission during an investigation will provide some comfort.