Compromising compliance

As you noted in your 16-22 September edition (“ECJ rejects in-house legal privileges”), on 14 September the European Court of Justice decided in the case of Akzo Nobel v European Commission not to recognise the protection of legal professional privilege for the advice of in-house lawyers in EU competition-law investigations. We would like to make clear why legal professional privilege is needed.

In-house lawyers are the front-line guarantor of compliance and it is disappointing that while the EU strives to legislate for higher standards of corporate governance and risk management, the decision of the court in effect rejects this key tool in achieving this aim.

Good legal advice ensures that companies behave correctly and legally. This requires that lawyers can give full and frank advice. In-house lawyers are frequently best placed to give advice that is pertinent to the company in question and to do so quickly. The in-house lawyer’s ability to do so is compromised if he or she cannot advise the company in confidence.

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The recognition of legal professional privilege would contribute significantly to the broader aims of the EU: to promote good corporate governance; to promote a culture of compliance within European companies in all areas of law; to improve the competitiveness of European business and the European economy as a whole.

We continue to dispute the assertion accepted by the court that their employment status compromises the independence of the legal advice they give. If anything, the failure to recognise legal professional privilege does so.

Linda Lee

President, Law Society of England and Wales

London

Wolfgang Ewer

President, German Bar Association (Deutscher Anwaltverein)

Berlin