On September 17, the European Court of First Instance (CFI) handed down its judgment upholding a decision of the European Commission (EC) that documents seized during an EC antitrust investigation were not covered by legal professional privilege. Despite indications by the President of the Court during the early part of the proceedings that the CFI might extend the scope of legal professional privilege in EU law, the CFI held that communications between in-house counsel, and internal clients, are not privileged in relation to EC competition investigations, and it set out the procedure that EC officials should follow if a dispute as to privilege arises during an on-site investigation.
In this case, Azko Nobel v. EC, which concerned disputed documents uncovered during a "dawn raid", the CFI held that even though specific recognition of the role of in-house lawyers, and the protection of communications with such lawyers was relatively more common today than when previously considered in the case of AM & S in 1982, it was nevertheless not possible to identify tendencies which were uniform or had clear majority support in that regard in the laws of the Member States. The CFI also highlighted the fact that a considerable number of Member States do not allow in-house lawyers to be admitted to the Bar or Law Society, and therefore do not recognize them as lawyers established in private practice. Thus, "the protection only applies to the extent that the lawyer is independent, that is to say, not bound to his client by a relationship of employment".
In its judgment, the CFI clarified the types of documents that fall within the scope of legal professional privilege. It held the following:
- Internal company documents which are drawn up exclusively for the purpose of seeking legal advice from a lawyer in exercise of the rights of defense, even if they have not been exchanged with a lawyer or have not been created for the purpose of being sent to a lawyer, may nonetheless be covered by professional privilege;
- The mere fact that a document has been discussed with a lawyer is not sufficient to give it privileged status; and,
- The fact that a document has been put together under competition law compliance does not suffice by itself to confer protection on that document.
The CFI also went on to clarify the procedure to be followed during an investigation where there are disputed documents. The CFI highlighted the following points:
- The company concerned does not have to reveal the contents of the documents in question provided that it presents the EC officials with relevant material to demonstrate the privileged nature of the documents;
- The company is entitled to refuse to allow the EC officials to even take a cursory look a the documents which it claims to be privileged, provided that the company considers such a look would reveal the content of those documents. The company must give the EC officially appropriate reasons for its view;
- Where the EC officials do not consider the material presented by the company to be confidential, they may place a copy of the document in a sealed envelope, and remove it with a view to a subsequent resolution to the dispute; and,
- The EC is not entitled to read the contents of the disputed document before it has adopted a decision allowing the company concerned to refer the matter effectively to the CFI.
Although this ruling did not extend the scope of legal professional privilege to include communications between in-house legal counsel and clients, the CFI clarified the type of documents that fall within this definition, and the procedure to be followed in the case of disputed documents.