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The EC has won round one of a battle to keep company and in-house counsel communications from becoming confidential.
Laura Cameron, CFO Europe Magazine
November 5, 2007
Anyone who watches popular American legal TV shows such as "Law and Order" knows that what is said between clients and their lawyers is protected by "attorney-client privilege," right? Well, maybe not, according to a ruling in September by Europe's second-highest court.
The case stems from a 2003 price-fixing investigation, in which the European Commission raided Dutch chemical manufacturer Akzo Nobel's UK offices. The company claimed that memos seized were privileged because they referred to conversations between management and in-house counsel.
The disputed documents were sealed pending a decision by the European Court of First Instance, which found that under European competition law, legal professional privilege (as it's known on this side of the Atlantic) covers only communication with independent external lawyers.
A host of legal bodies, including the European Corporate Lawyers Association and the American Corporate Counsel Association, participated in the case on behalf of Akzo Nobel. Jonathan Sinclair, a lawyer from Eversheds who led Akzo Nobel's defence team in 2003, says that "massive interest" in the case suggests "a very real prospect that it will be looked at again by the European Court of Justice," the final arbiter.
Akzo Nobel hasn't yet decided whether to appeal, though a press re-lease claimed the ruling "has no bearing on any substantive pending cases." An Akzo official gripes, however, that "this inefficiency will increase our costs." After all, Akzo Nobel has been party to anti-competitive practices five times in the past seven years, paying fines worth €139m.