Limited Scope of EU Legal Privilege Confirmed: In-house Counsel Excluded

The appeal in Akzo Nobel turned on whether in-house counsel can be deemed to be independent, though they are bound to their clients by a contract of employment.

In rejecting the appeal, the ECJ held that in-house lawyers’ economic dependence and their close ties with their employers mean that they cannot attain a level of independence comparable with that of an external lawyer, even though they may be regulated members of a Bar Association of a European Union Member State.  The Court rejected the claim that the changed "landscape" of EU competition law, in particular with the passage of Regulation 1/2003 and the accession of new Member States, warranted a departure from the strict position laid down in the AM&S jurisprudence.

The ECJ judgment adheres closely to Advocate General Kokott’s Opinion of 3 May 2010 in its emphatic rejection of privilege protection for advice from in-house counsel.  It, nonetheless, importantly differs in its silence on the status of non-EU qualified lawyers.  Advocate General Kokott had expressed her view that the extension of privilege to lawyers who are members of a Bar or Law Society in a third country "would not under any circumstances be justified".  Despite this, and despite the intervention of several European and international Bar Associations, the ECJ declined to rule explicitly on the question.  This leaves the pre-existing position unchanged, meaning that advice from lawyers qualified outside of the European Union cannot be assumed to benefit from legal professional privilege.

Webinar

A webinar discussing the impact of the ECJ’s judgment in Akzo Nobel Chemicals Ltd and Akcros Chemicals Ltd v. Commission, as well as developments in legal privilege in the UK and the US, will be held on Thursday, 23 September 2010.  Gibson Dunn partners Daniel Swanson, David Wood, and James Ashe-Taylor will be joined by Jasper de Gou, Senior Competition Counsel of Akzo Nobel N.V.  If you have any questions regarding these issues or have not already received details of this webinar and would like to attend, please contact the Gibson Dunn attorney with whom you work, or any member of the firm’s Antitrust and Trade Regulation Practice Group.