ACC: Akzo Decision Is Poor Policy

Monday, October 4, 2010 - 01:00

The Association of Corporate Counsel (ACC), an organization representing more than 25,000 in-house counsel members around the world, believes that the recent decision from the European Court of Justice (ECJ) in Luxembourg reflects an antiquated view of the in-house legal practice. In the case of Akzo Nobel Chemicals Ltd. V. EU (Case-550/07), the ECJ's decision restricts the applicability of legal professional privilege to in-house counsel communications with clients, indicating that the independence of in-house lawyers is insufficient to justify professional status in European Community (EC) competition law matters.The ruling has the perverse effect of undermining the efficacy of corporate compliance in multinational companies.

J. Daniel Fitz, former ACC board chair in London, states, "The ECJ ruling has serious ramifications as it denies in-house attorneys and multinational businesses in Europe and elsewhere the critical legal counsel on competition law matters that companies working in today's global legal marketplace require." Fitz adds, "The Court has locked into place the notion that in-house lawyers are not capable of independent judgment under EU professional standards. This puts companies who rely on the expert advice of their in-house lawyers at a disadvantage by forcing them to divulge confidential communications and jeopardizing their standing in litigation matters, as well as day-to-day business."

ACC's general counsel Susan Hackett states, "We are dismayed that the ECJ did not seize the opportunity to recognize the independent judgment and value of the in-house profession.The court instead relies on conjecture from opinions in the AM&S case of nearly thirty years ago, thereby ignoring the realities of modern in-house practice.In-house counsel are top legal practitioners who are just as capable as their outside counsel counterparts; the idea that professional independence stems from the type of office a lawyer works in, rather than from their moral and professional compass, evidences a deep misunderstanding of legal professionalism and lawyers."Hackett adds, "Further, since in-house counsel play such a vital role in assuring that their companies comply with the law, the ECJ should be promoting - not demoting - their capacities."

Hackett concludes, "In light of this decision, ACC will redouble our efforts to work closely with our members, and especially with our European leadership, to correct such outdated and unfounded presumptions in application of the law."

Background Information

ACC hosts a webpage dedicated to the Akzo issue at http://www.acc.com/ advocacy/professional-privilege-in-the-eu.cfm.

These pages feature links to the decisions, backgrounders and analysis, and practical steps for in-house counsel concerned about privilege protection in cross-border and EC matters.