Compliance programs rely on business people engaged in an open dialogue with their in-house lawyers, but this decision undermines efforts to create a culture of open dialogue about potentially anti-competitive behavior and can increase the cost of legal advice when companies decide that the safest approach is to systematically involve their external lawyers. Given the absence of Supreme Court decisions on the subject, the CJEU`s decision could be an example of lower German courts, which could lead to an even more restrictive approach to legal privilege for in-house lawyers under German law. That remains to be seen. Lawyers who have paid attention to such things can recall the intended consequences of akzo Chemicals Ltd v European Commission, Case C-550/07-P (14 September 2010). In the Akzo case, the CJEU found that internal communication between in-house legal advisers and employees of their companies is not privileged in European competition law cases. By applying a 1980s rule limiting solicitor-client privilege to communications with external legal advisers who are members of the Bar Association, the CJEU concluded that communications from in-house Dutch lawyers were not protected in EU antitrust investigations. (See AM &S Europe v European Commission, Case C-155/79 (18 May 1982). These theories have not yet been upheld by U.S. courts.
On the contrary, at least one court rejected this waiver argument and instead ruled that a foreign in-house lawyer`s communication with a U.S.-certified general counsel was preferred because he had acted as an agent of the attorney general. Gucci Am., Inc. v. Guess?, Inc., 271 F.R.D. 58, 71 (S.D.N.Y. 2010). In fact, most modern authorities believe that disclosure must be voluntary in order to obtain a waiver. Therefore, a target seeking to defend their privilege after a forced disclosure abroad could argue that the disclosure was “unintentional” and therefore should not lead to a waiver. Finally, the European authorities would probably obtain the documents disclosed either by seizure during a search or by administrative order under the threat of sanctions or other legal consequences. In such cases (which, in practice, could be all cases), the privilege holder could credibly claim that he did not intend to disclose his communications, but in fact vigorously oppose the disclosure. Philip Mansfield, an antitrust partner in London, and Jonathan Hitchin, a litigation partner in London, comment: As in the Netherlands, communication with an in-house lawyer is generally protected by legal privilege in England. The judgment of the CJEU does not change anything.
The different treatment of lawyers` internal communications at EU and national level in England may lead to conflicting defence strategies and/or analyses by the EU and the UK in the context of cartel investigations and possible follow-up actions in the UK courts. If critical cartel documents are produced by in-house lawyers, they may be disclosed to the Commission, but can OFTEN be refused in the UK. If the authorities conduct parallel investigations, this could lead to analyses based on potentially contradictory evidence. It is possible that, in all subsequent actions for damages, the OFT as well as the English Court of Justice will find that a company which provides the Commission with domestic legal documents waives the legal privilege that would otherwise be recognised in the United Kingdom, but this has not been examined. This inconsistency already exists between the US and the EU and raises significant issues in global cartel cases and is particularly uncomfortable with the requirement for leniency applicants to cooperate fully with the authorities as a condition of their reduction of fines. However, it is arguably more serious that bodies such as the OFT and the Commission have parallel competences and are required to ensure the consistency of their respective investigations. The CJEU`s decision does not change the position in Dutch law that lawyers admitted to the bar (internal and external) can invoke professional secrecy before the Dutch courts, unlike other lawyers. A business or consumer seeking damages as a result of an agreement cannot therefore compel an in-house lawyer admitted to the bar to disclose internal documents relating to the case or to force that in-house lawyer to testify.
