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In-house lawyers not covered by legal privilege rule

6 May 2010

The legal professional privilege rule protecting communications between lawyers and their clients does not extend to in-house lawyers, an EU advocate general has suggested.

Advocate General Kokott gave her opinion in an appeal brought by Akzo Nobel and Akcros Chemicals, one of its subsidiaries, against a decision refusing to extend the privilege to the companies’ in-house legal team.

The case started in 2003 after the European Commission decided to place internal correspondence between in-house counsels at Akzo and Akcros on file in the course of antitrust investigations into a cartel in the market for plastics additives.

In September 2007, the then Court of First Instance ruled that the legal privilege rule did not extend to in-house communications.

The companies had argued that their in-house lawyers should be covered by the privilege because, although employed, they had remained full member of their local law society – the Dutch Bar.

They appealed against the CFI’s ruling but advocate general Kokott said in case Case C-550/07 P Akzo Nobel and Akcros v European Commission that legal privilege was not intended to protect communications between in-house lawyers and their employers.

The rule, she said, was based on the lawyer’s specific role as an “organ of the administration of justice”, who has to provide legal assistance to his client in full independence and in the overriding interests of justice.

According to the advocate general, a salaried in-house lawyer, whether or not he was a member of a local law society, did not enjoy the same degree of independence from his employer as a lawyer in private practice in relation to his client.

She added there was a structural risk that an enrolled in-house lawyer would encounter a conflict of interests between his professional obligations and the interests of his company, on which he is more economically dependent and with which, as a rule, he identified more strongly than an external lawyer.

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