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III. THE NEGATIVE IMPLICATIONS OF EU PRIVILEGE LAW UNDER AKZO NOBEL AT HOME AND ABROAD

Published online by Cambridge University Press:  12 May 2011

Justine N Stefanelli
Justine N Stefanelli
Affiliation:
Justine N Stefanelli is the Maurice Wohl Fellow in European Law, British Institute of International and Comparative Law, London.
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Extract

On 14 September 2010 the Court of Justice of the European Union (ECJ) delivered its judgment in Akzo Nobel.1 The judgment and its preceding opinion focused on the application of legal professional privilege to communications between a client and in-house legal counsel. The less-emphasized aspect of the case was the Court's decision to exclude all lawyers qualified outside of the European Union (EU) from the application of legal professional privilege.2 Because the application of legal professional privilege to lawyers from third States was not the focus of Akzo Nobel, the issue was lost in the extensive debate surrounding privilege and in-house legal counsel. The Court unfortunately missed an opportunity to reshape EU privilege law in acknowledgement of its negative consequences on the EU human rights framework and also on the EU's relationships with countries which do not apply a similar bright line rule. These implications will be discussed below with a particular emphasis on the EU's obligations under the European Convention on Human Rights (ECHR) and its relationship with the United States (US).

Type
European Union Law
Information
International & Comparative Law Quarterly , Volume 60 , Issue 2 , April 2011 , pp. 545 - 556
Copyright
Copyright © 2011 British Institute of International and Comparative Law

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References

1 Case C-550/07 Akzo Nobel Ltd and Akcros Chemicals Ltd v European Commission [2010] ECR [as yet unpublished].

2 It is unclear whether AG Kokott meant only to exclude foreign in-house counsel, or all foreign lawyers. Presumably, the latter is intended.

3 Case 155/79 AM & S Europe v Commission [1982] ECR 1575, paras 25–26. In para 21 of this case, the Court held that the confidentiality of communications between lawyers and their clients should be protected at the European level, subject to two conditions: (1) the communications must relate to the client's right of defence, and (2) they must come from an independent lawyer, ie, ‘lawyers who are not bound to the client by a relationship of employment.’

4 ibid paras 40–51.

5 Case C-550/07 Akzo Nobel Ltd and Akcros Chemicals Ltd v European Commission, Opinion of Advocate General Kokott, 29 April 2010, paras 60–61.

6 ibid para 190.

7 ibid.

8 In support of the principle that the application of EU fundamental rights law must respect conferral, see the opinion of Advocate General Sharpston in Case C-34/09, Gerardo Ruiz Zambrano v Office national de l'emploi (ONEM) [as yet unpublished] para 156–163.

9 Art 6(2) Treaty on European Union (TEU).

10 Of course, this may also be the case with regard to the inapplicability of the privilege to in-house legal counsel.

11 R Pattenden, The Law of Professional-Client Confidentiality: Regulating the Disclosure of Confidential Personal Information (OUP, Oxford, 2003) 62.

12 Art 6 TEU. See also Draft Charter of Fundamental Rights of the European Union, Convent 49, 2000 p 10: ‘The rights guaranteed in Article 7 correspond to those guaranteed by Article 8 of the ECHR. To take account of developments in technology the word “correspondence” has been replaced by “communications”. In accordance with Article 52(3), the meaning and scope of this right are the same as those of the corresponding article of the ECHR. Consequently, the limitations which may legitimately be imposed on this right are the same as those allowed by Article 8 of the ECHR….’

13 Campbell v UK (1992) 15 EHRR 137.

14 ibid para 37. The ECtHR states that it is the task for the national courts, rather than the ECtHR, to determine whether the law at issue is valid. Where the national courts have upheld the validity of the law, the ECtHR is unlikely to disagree.

15 ibid para 34.

16 Kopp v Switzerland ECtHR judgment of 25 March 1998, No 23224/94, paras 55–75 and Foxley v United Kingdom judgment of 20 June 2000, No 33274/96 ibid, Kopp, paras 31–47.

17 Petri Sallinen and Others v Finland, ECtHR judgment of 27 September 2005, No 50882/99, para 82.

18 Art 8(2) ECHR.

19 Above (n 5) para 190.

20 ibid.

21 On this issue see, Eversheds, ‘Attorney-Client Privilege in Europe’ (2007), available at <https://www.eversheds.com/documents/AttorneyClientPrivilege.pdf>; accessed 26 November 2010; J Fish, Council of the Bars and Law Societies of the European Union, ‘Regulated legal professionals and professional privilege within the European Union, the European Economic Area and Switzerland, and certain other European jurisdictions’ (2004), available at <http://elixir.bham.ac.uk/Free%20Movement%20of%20Professionals/Links_docs/fish_report_en.pdf> (last accessed 26 November 2010).

22 EU–USA Summit Press Statement of Herman van Rompuy, 20 November 2010, available at <http://vloghvr.consilium.europa.eu/?p=3203>accessed 26 November 2010.

23 CT McCormick, McCormick on Evidence (6th edn, Thomson/West Group, St, Paul, Minnesota, 2006) ss 87–97, 386–445. See also JH Wigmore, Evidence in Trials at Common Law (‘Wigmore on Evidence’) (John T McNaughton rev, Little, Brown and Co, 1961) vol 8, s 2290.

24 Upjohn Co v United States, 499 US 383, 389 (1989).

25 Rule 501 reads as follows: ‘Except as otherwise required by the Constitution of the United States or provided by Act of Congress or in rules prescribed by the Supreme Court pursuant to statutory authority, the privilege of a witness, person, government, State, or political subdivision thereof shall be governed by the principles of the common law as they may be interpreted by the courts of the United States in the light of reason and experience. However, in civil actions and proceedings, with respect to an element of a claim or defense as to which State law supplies the rule of decision, the privilege of a witness, person, government, State, or political subdivision thereof shall be determined in accordance with State law.’ Note that where a case is in federal court under diversity jurisdiction, state privilege law will apply.

26 United States v United Shoe Machine Corp, 89 F Supp 357, 358–359 (D Mass 1950).

27 Above (n 23) s 87, 391 (n 19) (citing the Uniform Rule of Evidence 502(b)). Wigmore on Evidence, ibid, supplies the traditional rule of privilege: (1) Where legal advice of any kind is sought (2) from a professional legal adviser in his capacity as such, (3) the communications relating to that purpose, (4) made in confidence (5) by the client, (6) are at his instance permanently protected (7) from disclosure by himself or by the legal adviser, (8) except the protection be waived.

28 Restatement (Third) of the Law Governing Lawyers s 71 (2000).

29 American Bar Association, Report No 2 of the Section of International Law and Practice, Reports of the American Bar Association, Vol 108 (1983) 681.

30 For other commentaries on this issue see: LP Cummings, ‘Will Globalization be the Death Knell for the Corporate Attorney-Client Privilege in the US? An Opportunity to Re-Examine the Privilege as it Applies to In-House Counsel’, speech given at the 61st annual meeting of the Southeastern Association of Law Schools, 27 July – 2 August, 2008, available at http://works.bepress.com/cgi/viewcontent.cgi?article=1000&context=lawton_cummings; Yoshida, D, ‘The Applicability of the Attorney-Client Privilege to Communications with Foreign Legal Professionals’, (1997–1998) 66 Fordham Law Review 209Google Scholar; Marin, J, ‘Invoking the US Attorney-Client Privilege: Japanese Corporate Quasi-Lawyers Deserve Protection in US Courts Too’ (1997–1998) 21 Fordham International Law Journal 1558Google Scholar.

31 98 FRD 442 (D Del 1982).

32 ibid 444.

33 1988 WL 68932 (DNJ 1988).

34 In fact, Congress rejected a proposed Federal Rule of Evidence that purported to define ‘lawyer’ for purposes of legal privilege as ‘a person authorized, or reasonably believed by the client to be authorized, to practice in any state or nation.’ (Proposed Federal Rule of Evidence 503). This was rejected in favour of the common law approach and so that the law of privilege would not become inflexible. Richardson, HL, ‘US Law of Attorney-Client Privilege as Applied to Non-US Lawyers: A Reciprocity Issue?’ (1985) 7 Michigan Yearbook of International Legal Studies 325Google Scholar, 333.

35 See eg Status Time Corp v Sharp Electronics Corp, 95 FRD 27, 32–33 (SDNY 1982). However, some courts go so far as to grant the privilege to non-lawyers, e.g. professionals specialising in the fields of tax or patent law. See also Yoshida (n 30).

36 15 USC 7245 (2002).

37 SEC, ‘Implementation of Standards of Professional Conduct for Attorneys’, File No S7-45-02, available at <http://www.sec.gov/rules/final/33-8185.htm>accessed 26 November 2010.

38 ibid s 205.3(d) Issuer Confidences. In particular, see the opinion of the Council of Bars and Law Societies of the European Union, opposing the extraterritorial regulation of members of the bar resident in Europe (Part 3(1)), available at <http://www.sec.gov/rules/proposed/s74502/ccberesponse.htm>accessed 26 November 2010.

39 Richardson (n 34) 336.

40 Daly, MC, ‘The Dichotomy Between Standards and Rules: A New Way of Understanding the Differences in Perceptions of Lawyer Codes of Conduct by U.S. and Foreign Lawyers’ (1999) 32 Vanderbilt Journal of Transnational Law 1117Google Scholar.

41 Above (n 5) para 190.

42 An alternative test is whether the speaker intended for the communication to be confidential. See eg Uniform Rule of Evidence 502(a)(2): ‘A communication is ‘confidential’ if it is not intended to be disclosed to third persons other than those to whom disclosure is made in furtherance of the rendition of professional legal services to the client or those reasonably necessary for the transmission of the communication.' However, as Calhoun notes, most courts that use the subjective test, also require some degree of reasonableness (Calhoun, SA, ‘Globalization's Erosion of the Attorney-Client Privilege and What US Courts Can Do to Prevent It’ (2008–2009) 87 Texas Law Review 235, 246Google Scholar.

43 See eg Restatement (Third) of the Law Governing Lawyers s 79 comment c: An attorney's unintentional disclosure does not operate as a waiver. Waiver may be express or implied, although most jurisdictions require that the waiver be voluntary (as opposed to in error) (McCormick (n 23) s 93, 418, 419).

44 On this issue see Cummings (n 30); Calhoun (n 42).

45 The judgment in Akzo Nobel also makes this a problem where communications were made between the client and its in-house counsel. It is arguable that such communications would not be deemed confidential by several US courts.

46 Where the test is simply subjective, this may not be a problem. However, as indicated above, most courts employ a reasonableness standard in conjunction with the subjective test.

47 Calhoun (n 42) 249.

48 ibid.

49 2002 US Dist LEXIS 25789 (DDC Feb 7, 2002).

50 ibid 105.

51 D Hamilton and JP Quinlan, ‘The Transatlantic Economy 2009’ (Brookings Institution Press, Washington DC, 2009). The US and the EU are each other's number one source of foreign direct investment. See European Council on Foreign Relations, ‘Towards a Post-American Europe: A Power Audit of EU–US Relations’ (ECFR 2009) 24.

52 Treaty of friendship, commerce, and consular rights, May 27, 1931, US–Austria, 47 Stat 1876; Treaty of friendship, establishment and navigation, October 3, 1963, US–Belgium, 14 UST 1284; TIAS 5432; 480 UNTS 149; Treaty concerning the encouragement and reciprocal protection of investment, June 2, 1994, US–Bulgaria, S Treaty Doc No 3, 103d Cong, 1st Sess (1993); Treaty concerning the reciprocal encouragement and protection of investments, January 1, 1993, US–Czech Republic, S Treaty Doc No 31, 102d Cong, 2d Sess (1992); Treaty of friendship, commerce, and navigation, July 30, 1961, US–Denmark (Convention of 1826 was in force prior to this date) 12 UST 908; TIAS 4797; 421 UNTS 105; Treaty of friendship, commerce, and consular rights, May 22, 1926, US–Estonia, 44 Stat. 2379; Treaty of friendship, commerce, and consular rights, August 10, 1934, US–Finland, (E-1) 49 Stat 2659. Protocol of amendment, December 1, 1992 (E-2) S Treaty Doc No 34, 102d Cong., 2d Sess (1992); Convention of establishment, December 21, 1960, US–France, 11 UST 2398; TIAS 4625; 401 UNTS 75; Treaty of friendship, commerce, and navigation, July 14, 1956, US–Germany, 7 UST 1839; TIAS 3593; 273 UNTS 3; Treaty of friendship, commerce, and navigation, October 13, 1954, US–Greece, 5 UST 1829; TIAS 3057; 224 UNTS 279; Treaty of friendship, commerce and navigation, September 14, 1950, US–Ireland, (E-1) 1 UST 785; TIAS 2155; 206 UNTS 269, Protocol of amendment, November 18, 1992, (E-2) S Treaty Doc No 35, 102d Cong, 2d Sess (1992); Treaty of friendship, commerce and navigation, July 26, 1949, US–Italy, 63 Stat. 2255; TIAS 1965; 79 UNTS 171; Treaty of friendship, commerce, and consular rights, July 25, 1928, US–Latvia, 45 Stat. 2641; Treaty for the encouragement and reciprocal protection of investment, January 14, 1998, US–Lithuania, TIAS 12918; Treaty of friendship, establishment and navigation, March 28, 1963, US–Luxembourg, 14 UST 251; TIAS 5306; 474 UNTS 3; Treaty of friendship, commerce and navigation, December 5, 1957, US–Netherlands, 8 UST 2043; TIAS 3942; 285 UNTS 231; Treaty concerning business and economic relations, August 6, 1994, US–Poland, S Treaty Doc No 18, 101st Cong, 2nd Sess (1990); Treaty concerning the reciprocal encouragement and protection of investment, January 15, 1994, US–Romania, S. Treaty Doc No 36, 102d Cong, 2d Sess (1992); Treaty concerning the reciprocal encouragement and protection of investments, January 1, 1993, US–Slovak Republic, S Treaty Doc No 31, 102nd Cong, 2d Sess (1992) (The Treaty with the Czech and Slovak Federal Republics collectively entered into force on December 19, 1992, but entered into force for the Czech Republic and Slovak Republic as separate states on January 1, 1993; Treaty of commerce, November 15, 1882, US–Slovenia, 22 Stat 963; Treaty of friendship and general relations, April 14, 1903, US–Spain, 33 Stat 2105; Convention to regulate commerce, US–United Kingdom, July 3, 1815, 8 Stat 228.

53 See also agreement between the US and: Denmark (Art VII); France (Protocol 1(b)); Germany (Art VIII); Greece (Art XII); Ireland (Art VI); Italy (Art V); Luxembourg (Art VIII); Netherlands (Art VIII); Slovenia (Art IV); Spain (Art VI).

54 This appears to be standard boilerplate text used in this type of agreement; however, the extent to which these provisions are relied on in practice is outside the scope of this paper.