Attorney-Client Privilege: A Critical Topic For In-House Counsel Of Multinational Companies

Whether documents are privileged, and therefore shielded from

disclosure to investigators or opposing parties in litigation, can

be a complex question, with the answer having a significant impact

on the outcome of a case. Especially for multinational companies,

the rules governing attorney-client privilege are therefore

critical. It is particularly important for in-house counsel to be

aware of the rules, because the privilege rules for their

communications vary significantly by jurisdiction. In some,

in-house counsel are never able to assert the privilege for their

communications, while in others in-house counsel are able to take

advantage of full privilege protection. And in still other

jurisdictions, the rules are differentiated and remain

unsettled.

The European Union's Court of First Instance (CFI) recently

issued an important decision on the scope of the attorney-client

privilege in European Commission investigations, called the

Akzo Nobel case (Akzo Nobel Chemicals Ltd. and Akcros

Chemicals Ltd. v. Commission of the European Communities),

which again addresses these issues. The legal dispute revolved

around an antitrust investigation and related raid by the European

Commission at the UK offices of Akcros and its subsidiary, Akzo.

The commission, which was investigating possibly anticompetitive

behavior, seized a number of disputed documents, including a

manager's memo to his superiors that was researched and written

for the purpose of seeking outside legal advice; the manager's

handwritten notes; and emails between the manager and an in-house

lawyer at Akzo who was based in The Netherlands. Long-established

EU law holds that communications with an in-house counsel are not

entitled to legal privilege.

But to confuse matters, the Akzo Nobel case deals only

with privilege under European Union law, and not with the privilege

regimes of the EU's 27 member states. Under those individual

state regimes, in-house counsel in some cases may be, and in others

may not be, able to rely on a privilege. Nevertheless, with this

decision, the CFI continues to deny legal privilege under EU law to

in-house lawyers. As a result, in-house counsel of multinational

companies?regardless where the company is headquartered

or where the attorney is located?should remember that

communications with employees and executives in Europe may not be

privileged under any circumstances.

In assessing whether a particular communication would be

privileged, and if applicable, determining how to protect it,

in-house counsel of multinational operations have to anticipate

whether the communication could be involved in a U.S., EU, or

EU-member state investigation and/or court proceeding. Counsel must

familiarize themselves with applicable regimes, ask which law

applies, and finally try to protect communications as effectively

as possible.

U.S. Privilege Law for In-House Counsel

Under U.S. privilege law, in-house counsel are treated like any

independent attorney for purposes of considering whether their

communications are privileged. In other words, the standard test of

privilege applies: The issue is whether communications with counsel

are made in confidence for the purpose of receiving legal

advice.

U.S. in-house counsel must be careful about protecting the

privilege, and using it in appropriate situations. For example, in

addition to giving legal advice, in-house attorneys may consult on

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