In-house lawyers were at loggerheads with the European Commission this week, as a senior EU official told delegates that employed counsel operated under an inherent conflict of interest.

Emil Paulis, the EC's competition director, stood by the commission's view that during European investigations in-house lawyers should not be allowed professional privilege on the same basis as their private practice counterparts.


'There is a major difference between internal and external lawyers,' maintained Mr Paulis. 'It is a matter of independence and subordination. There is a basic situation of a conflict of interest - it is obvious that there is a conflict between their loyalty to the employer and their professional ethical rules.'


Mr Paulis said he was not implying that in-house lawyers were less ethical than those in private practice, but 'simply that lawyers are more independent when they are not in a position of subordination.'


He was responding to Jan Eijsbouts, the head of legal at Dutch chemical company Akzo Nobel, which is in dispute with the commission over the privilege of documents obtained in an investigation.


Mr Eijsbouts told delegates that 'outside counsel can be more likely to give tainted advice to please [their client's] local management than might in-house counsel, who would rightly be dismissed if they provided their chief executive with what turned out to be tainted advice'. He added: 'Independence is not as clear-cut as some make it out to be.'


Mr Eijsbouts went on to criticise the EC's competition directorate for being slow to take decisions. 'DG competition is not well enough resourced, so decisions are delayed for too long.'


  • Lawyers should be careful not to use legal professional privilege as a marketing tool to persuade clients to instruct them rather than accountants, IBA president Francis Neate told the conference. He warned that privilege exists for the public interest and not that of lawyers.