The Advocate General's Opinion in the Akzo privilege case was published today. In her Opinion, Advocate General Kokott takes the view that legal professional privilege should not be extended to protect communications between parties and their in-house lawyers from disclosure during competition investigations by the European Commission (Akzo Nobel Chemicals Limited and Akcros Chemicals Limited v Commission of the European Communities).

The Advocate General agrees with the ruling to this effect handed down by the General Court (formerly the Court of First Instance, or CFI) on 17 September 2007, in which it decided that EU law should continue to follow the 1982 judgment of the European Court of Justice (ECJ) in AM&S Europe v Commission of the European Communities [1983] QB 878 (see our e-bulletin on the CFI judgment). In that case, the ECJ held that legal professional privilege only applies to communications with "independent" lawyers, which is deemed to exclude lawyers bound by a "relationship of employment".

The case does not affect the scope of privilege as a matter of English law, under which in-house lawyers continue to enjoy the same protection as external lawyers so long as they are acting in their capacity as a lawyer and not an executive.

The Advocate General has reached this Opinion contrary to the submissions of various parties who intervened in the case including the British, Irish and Dutch governments, the Council of Bars and Law Societies of Europe and the International Bar Association.

The Opinion notes that legal professional privilege serves to protect communications between a client and a lawyer who is independent of that client, but that there is a "fierce dispute" between the parties as to how the criterion of independence is to be understood.

The appellants and intervenors argue in favour of a "positive" definition of independence, by reference to the professional and ethical obligations to which lawyers admitted to a Bar or Law Society are generally subject. The Advocate General, however, takes the view that such obligations are necessary but not sufficient to provide the required independence; there must also be the absence of an employment relationship. She states:

"The reasoning behind this is that an enrolled in-house lawyer, despite his membership of a Bar or Law Society and the professional ethical obligations associated with such membership, does not enjoy the same degree of independence from his employer as a lawyer working in an external law firm does in relation to his clients. Consequently, an enrolled in-house lawyer is less able to deal effectively with any conflicts of interest between his professional obligations and the aims and wishes of his client than an external lawyer." (paragraph 61)

In support of this view, the Advocate General states that in-house lawyers are for the most part "economically dependent" on their employer and, in addition, usually exhibit a considerably stronger "personal identification" with their employer and its corporate policy and strategy than would be true of external lawyers in relation to the business activities of their clients. Both of these factors are said to militate against the proposition that in-house lawyers should enjoy the protection of legal professional privilege in respect of internal company or group communications.

The Opinion goes so far as to say that the "susceptibility" of an in-house lawyer to conflicts of interest makes it difficult for him to raise an effective opposition to any abuses of legal professional privilege, such as handing evidence to the company's legal department under cover of a request for legal advice for the purpose of preventing the competition authorities from gaining access to it. It continues: "At worst, the functional departments of an undertaking may be tempted to misuse the company's or group's internal legal department as a place for storing illegal documents such as cartel agreements and records of meetings between the parties to those cartels and of the modus operandi of a cartel." (paragraph 150)

The appellants also argue that the evolution of competition law since the AM&S case requires this decision to be reconsidered. The new modernised enforcement regime of Regulation 1/2003 leads to an increasing need for internal corporate legal advice by in-house lawyers, who have the necessary intimate knowledge of the business, but unless such advice can benefit from legal professional privilege companies will feel the need to turn to external counsel. The Advocate General dismisses this closeness as a double-edged sword and argues that it is precisely this proximity to the undertaking concerned which calls the independence of the enrolled in-house lawyer seriously into question. A departure from the case-law in AM&S can therefore not be justified by reference to these procedural reforms.

Finally, the Advocate General also rejects the argument that it is solely up to the Member States to determine the precise scope of legal professional privilege, by virtue of their procedural autonomy. According to Advocate General Kokott, EU law would be adversely affected if decisions on the lawfulness of acts adopted by EU institutions were made by reference to principles of national law. She states: "Differences in the substance and scope of legal professional privilege depending on the Member State in which the Commission conducts an investigation would ultimately lead to a legal patchwork which would not be compatible with the principle of the internal market. The very purpose of making the Commission the supranational competition authority was to subject all undertakings in the European Union to uniform rules in the field of competition law and to create equal conditions of competition for them in the internal market." (paragraph 169)

The Opinion concludes that the appeal must be dismissed.


In-house lawyers and the organisations which employ them will no doubt be disappointed at the views expressed by the Advocate General and her conclusion that their communications should not be covered by privilege in the context of EU competition law.

The ECJ is not bound to follow the opinion of the Advocate General in reaching its decision on the appeal and it is hoped that the Court will afford greater weight to the professional and ethical obligations shared by in-house lawyers with the rest of the profession than the Advocate General has seen fit to do.

The views expressed by the Advocate General may, however, make it more likely that the ECJ will decide in favour of maintaining the status quo. We expect the ECJ judgment to be published in the next three to six months. We will issue a further update once it is available.