In-House Lawyers & Privilege
22 November 2007
Most people have heard of legal privilege which in simple terms means the confidentiality of the advice of a solicitor relating to a matter which is, or may become, the subject of a dispute.
Several simple rules can apply, which are similar to those applying to “Without Prejudice” discussions. Whilst not absolutely necessary, if there is any doubt a Solicitor will mark a letter of advice as “Legally privileged – prepared by [ ], Solicitors, in contemplation of legal proceedings”.
Solicitors and barristers can also be employed by companies, who are their only ‘client’. Qualified and subject to the same professional standards and rules as their private practice brethren, in the UK the same privilege rules apply to them. The view is that in-house lawyers are regulated by their own national law society and should be afforded the same level of protection.
Since joining the European Union, the continental legal systems with their different approaches have thrown doubt on the position of privilege relating to advice given by solicitors and barristers employed by companies to their employers. In 1982, the European Court of Justice held that a company can only withhold privilege communications from the European Commission if they came from external lawyers and only then if the materials were in the interests of the company’s rights of defence.
Now, the European Court of First Instance has confirmed that in-house legal counsel cannot claim professional privilege protection when under any investigation by the European Commission. Generally, this means the European Commission refuses to recognise in-house lawyers as independent and subject to the same rules as external lawyers.
This means that companies with in-house lawyers must re-think their policies, procedures and strategies for dealing with potential European Commission ‘Dawn Raids’, or even Office of Fair Trading raids where the European Commission join in. In-house lawyers’ papers and advice are unlikely to be protected by privilege and are fully disclosable. This poses major practical questions such as how is legal advice given internally within a company? Do all lawyers in-house have to advise in spoken dialogue only with nothing written down (which would be contrary to the way most lawyers work)?
One solution concerning ‘Dawn Raids’ is to instruct a nearby firm of solicitors with sufficient resources to be able to attend at your company offices being searched within half an hour and to engage them to act on your company’s behalf. Naturally they would work closely with the in-house lawyers (if any) but the valuable weapon of legal privilege would not be lost.
Latest Events
- July 2008
Forthcoming Events
