By Jonathan Rayner


In-house lawyers must re-think their strategy for dealing with European Commission dawn raids, the Commerce & Industry (C&I) Group has warned.



It follows the long-awaited decision of the European Court of First Instance in the Akzo Nobel case, confirming that in-house counsel cannot claim legal professional privilege (LPP) protection when under investigation by the commission.



The court reaffirmed the position of the European Court of Justice in 1982 that a company can only withhold privileged communications from the commission if they come from external lawyers - and only then if the materials were in the interests of the company's rights of defence.



The commission refuses to recognise in-house lawyers as independent, even though in some European countries - including the UK - they can join the law society and claim privilege in domestic matters.



Simon Welch, chairman of the C&I Group's corporate governance committee, said this 'significant judgment' raised several questions. 'How do you protect communications from in-house providers? Do you rely on spoken dialogue only, with nothing written down?'



Law Society chief executive Des Hudson said it has long argued that in-house lawyers regulated by their own national law society or bar have the same core duty of independence as those in private practice - and should be afforded the same level of protection. He said: 'This inequality between members of the same profession is unsustainable and it is disappointing that court did not set this straight.'



The Council of Bars and Law Societies of Europe, European Company Lawyers Association, International Bar Association, Dutch Bar Association and American Corporate Counsel Association had all intervened in the case in support of LPP for in-house lawyers.