When the European Court of Justice’s ruling in the Akzo case came out on Tuesday, comments from law firms condemning the decision began rolling into the newsdesk within minutes.The court ruled that in-house lawyers are not ‘independent’ enough of their employers for their advice to qualify for legal professional privilege.
For the vast majority of highly competent solicitors working in-house in the UK, that conclusion is an insult. In-house solicitors are bound by professional and ethical obligations that would oblige them to speak out against any shady practice by their employer. And if they choose to blow the whistle, they do at least have some redress in the form of employment or whistleblowing legislation.
It could be argued that, in some cases, in-house counsel are actually in a stronger position to speak out against unethical practice than, for example, an external law firm that may be too dependent on one key client. That firm will have no comeback at all against a client that drops it because it doesn’t like the firm’s advice that a particular project is unlawful. It can’t even sue for wrongful dismissal.
But at the end of the day, these arguments are academic. And in-house lawyers are actually no worse off following this judgment than they were before. The ruling has not changed the position on in-house privilege in EU competition proceedings, it has simply missed an opportunity to put it right. And of course it has alerted companies to the dangers of consulting their own internal counsel rather than external lawyers.
Those external lawyers will, of course, be the real winners in this decision – or they ought to be. Just as the press statements from law firms giving opinions on the ruling came thick and fast, so, of course, have the client updates. Any firms that have not yet informed their large corporate clients that the ECJ has just ruled that only an external lawyer’s advice can avoid the beady eye of the EU Commission are missing a trick.
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