A recent appeal brought before the European Court of Justice (“ECJ”) by two chemical companies has re-opened the contentious issue of the scope of legal professional privilege (“LPP”) under European Community law. Details of the appeal, brought by Akzo Nobel Chemicals and Ackros Chemicals against a judgment of the Court of First Instance of 7 September 2007, were published on 8 February 2008. The judgment of the Court of First Instance had upheld a decision by the European Commission that certain documents seized during an unannounced inspection (often referred to as a “dawn raid”) on the companies’ premises in relation to suspected infringements of competition law were not covered by LPP.
The dispute centers on documents seized by the European Commission in the course of a dawn raid undertaken at the companies’ UK premises with the assistance of the UK Office of Fair Trading in February 2003. The documents in question included:
- Copies of an internal memorandum containing information gathered by management for the purposes of seeking advice from external competition lawyers, including one copy with a handwritten record of a discussion with external counsel (Set A);
- Hand-written notes made by management for the purpose of preparing the memorandum contained in Set A and copies of related email exchanges with members of the in-house legal department (Set B).
The companies argued that the documents in both Set A and Set B had been wrongly taken by the Commission on the basis that they were covered by LPP and appealed both the Commission’s decision to take the documents in question and its subsequent refusal to return or destroy them. The Court of First Instance found in favour of the Commission. It confirmed the existing case law under European Community law to the effect that communications with in-house counsel are not covered by LPP. It also took a narrow approach to the circumstances in which LPP would apply to communications with external counsel: only those documents whose main purpose was the seeking of external legal advice would be covered by LPP.
The current state of the law therefore takes a very restrictive view of the scope of LPP and creates a trap for those accustomed to the more expansive approach taken in other jurisdictions. A range of organisations, including the International Bar Association, the American Corporate Counsel Association and the Council of the Bars and Law Societies of the European Union have intervened in the proceedings to argue in favour of a more expansive approach to LPP in line with the approach taken in other jurisdictions. A key argument made by the appellants is that, in failing to reinterpret the existing case law in relation to LPP in light of significant changes in the legal landscape (in particular the way in which the role of in-house counsel has evolved), the Court of First Instance violated the general principles of protection of the rights of the defence and of legal certainty.
The existing position on LPP under European Community has drawn heavy criticism and is seen by many as being anomalous and as under- valuing the role and integrity of in-house counsel. However, a ruling in favour of the appellants would require the ECJ to over-rule not just the Court of First Instance, but also its own well-established case law.