In a recent decision that could have important implications for multinational businesses, including companies based in the United States, the European Court of Justice (ECJ) reaffirmed the principle that communications between business executives and their in-house counsel are not protected by the legal professional privilege (LPP), which is akin to the attorney-client privilege. See Case C-550/07 P, Akzo Nobel Chemicals Ltd v. European Commission.
During the European Commission’s (EC) investigation of Akzo Nobel Chemicals Ltd and its subsidiary Akcros Chemicals Ltd (collectively, Akzo) for possible antitrust violations, the EC seized a number of documents, including email messages between the managing director and in-house counsel. The EC determined that the LPP did not apply to these email messages, and on appeal, the General Court agreed that the email communications between company management and in-house counsel were not protected from discovery in antitrust cases or investigations by the EC. Akzo then appealed to the ECJ.
On appeal, the ECJ affirmed the holding of the General Court. Relying on earlier precedent, the ECJ held that in order for the LPP to apply to legal communications, attorneys must be “‘independent lawyers’ . . . ‘who are not bound to the client by a relationship of employment.’” Because in-house attorneys are employees of their companies, the ECJ held that they are not sufficiently independent under this standard. As further justification for its decision, the ECJ noted that the laws of other EU countries do not afford protection to these types of communications with in-house counsel.
While this decision on its face applies only to EU antitrust investigations by the EC, it could potentially have a significant impact on in-house communications generally. Communications with in-house counsel based in the EU or in-house counsel opinions that are circulated to offices in the EU may be subject to a waiver of the LPP. Accordingly, companies with offices in the EU may wish to reexamine their communication policies and discuss with outside counsel the issue of who should participate in their internal legal communications to ensure that the LPP is preserved.