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Legal professional privilege does not apply in-house

 

Legal professional privilege
does not apply in-house



In Akzo
Nobel Chemicals Ltd and Akcros Chemicals Ltd v European Commission, the ECJ has
dismissed an appeal against an earlier General Court judgment that denied the
application of legal professional privilege to communications with in-house
lawyers.

Privilege
entitles a party to withhold written or oral evidence from production to a
third party or a court. In the main this consists of: (i) legal advice
privilege (confidential communications between lawyers and their clients made
for the dominant purpose of seeking or giving legal advice); and (ii)
litigation privilege (confidential communications between lawyers and their
clients, or the lawyer or client and a third party, which come into existence
for the dominant purpose of being used in connection with actual or pending
litigation).

Some
private and public sector organisations have in-house legal teams. So, does
legal privilege apply, for example, where a line manager seeks legal advice
from an in-house lawyer on the dismissal of an employee? The ECJ have confirmed
that legal privilege does not apply in such circumstances.

The ECJ held that
regardless of the national professional rules and ethical obligations to which
in-house lawyers are subject, due to their economic dependence and the close
ties with their employers, in-house lawyers do not enjoy a level of
professional independence comparable to that of an external lawyer. Therefore
legal professional privilege does not cover exchanges within a company or
corporate group with in-house lawyers. In the ECJ’s view, this does not lower
the level of protection of the rights of defence of undertakings as any
individual who seeks advice from a lawyer must also accept the restrictions and
conditions applicable to the exercise of that profession.


September 2010

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