The European Court of Justice (ECJ) has confirmed in Akzo Nobel and Akcros Chemicals v European Commission that internal communications by company employees with in-house counsel are not legally privileged in competition law investigations by the European Commission.  The decision will have far reaching consequences for multinational companies operating across Europe.  Communications with their in-house counsel will be available to the European Commission and could be used against the companies involved during EU competition law investigations.

The national laws of privilege in each Member States are not affected by this decision. The Irish Courts and the Irish Competition Authority have previously afforded in-house counsel the benefit of legal professional privilege in certain circumstances. Given that the ECJ’s judgment conflicts with the position under Irish law, it is important to be clear as to which set of rules apply.  The situation is as follows: the EU privilege rules will apply when the European Commission carries out an investigation. Where a national authority (e.g., the Irish Competition Authority) assists the Commission with its investigation, the EU privilege rules will still be applicable. However, where a national competition authority undertakes its own investigation under its national legislation or under the EU competition rules, the national rules on privilege will apply.

The ECJ relied on an earlier decision in which it held that for communications between lawyers and clients to be protected by legal professional privilege in Commission competition investigations, the exchange must emanate from an “independent”, EU qualified lawyer. The Court concluded that in-house counsel do not have the requisite level of “independence” because of the close relationship with the employer.

Companies may wish to review their procedures regarding the seeking and dissemination of legal advice to ensure that they are better protected should an EU investigation occur.