In-House Lawyers are not among the Privileged Classes

Despite a battle stretching back 28 years, the EU's Court of Justice has today refused to recognise that in-house counsel may give privileged or confidential legal advice in competition matters to their corporate colleagues.

This means that the European Commission is able to read the advice which an in-house counsel gave to his or her business colleagues, including advice saying that the company was breaching the tough competition rules on pricing, market allocation and so on. The in-house lawyer's advice is therefore a "smoking gun" for the European Commission cartel busters who dawn raid businesses and homes around Europe to find evidence of cartels, anti-competitive practices and abuses of dominance. As a result of this judgment, only the advice of outside lawyers is "privileged" and confidential.

The judgment of the Luxembourg-based court today refuses to overturn precedent in the Court of Justice itself dating back to the 1982 AM&S case and the General Court in this case relating to a dawn raid on Akzo.

Following the judgment, only outside counsel, whether solicitors or barristers, can claim privilege. Advice by economists and business or management consultants may be inspected and may well be the evidence which enables the Commission to impose the massive fines which it can now do - fines of up to 10% of worldwide turnover.

To-day's judgment is unfortunate because it fails to recognise the critical role of in-house counsel and now the only path forward is for legislation to be enacted at EU level to recognise privilege in certain circumstances.

Judgment in Case C-550/07 P Akzo Nobel Chemicals Ltd v Commission