In-house lawyers and legal privilege in competition law investigations

Paolo Palmigiano, SolicitorHead of Competition Law, Group LegalLloyds Banking Group

CLA, 29 April 2013

Summary

Introduction

Key cases

Why legal privilege for in-house lawyers matters

Key challenges for in-house lawyers

Introduction

Legal privilege and rules on discovery

In Europe, rules about discovery, privilege and in-house

lawyers differ considerably

UK : litigation privilege and legal advice privilege

Italy (and civil law jurisdictions): duty of professional

confidentiality and roles in-house

EU : legal privilege does not apply to in-house lawyers

Importance of LPP in competition law

Competition authorities (Commission and NCAs) have wide-

ranging powers to request information

Formal requests for information

Dawn raids

- Access to the premises

- Documents (electronic or not)

- Interviews

Key cases - 1

AM & S Europe v Commission (case C155/79)

Akzo – ECJ judgment of 14 September 2010 - facts In EU competition law investigations, in-house lawyers cannot benefit from

legal professional privilege, even if they are subject to national professional

rules. Their independence is compromised by the employment relationship

Reasoning

Lack of independence (notwithstanding professional rules and safeguards)

There is no unequal treatment

Different situation in various member states – no predominant trend

Modernisation (and self-assessment) has not changed the role

Right of defense and principle of legal certainty unaffected

No violation of principle of national autonomy in procedural matters

Key cases - 2

P.U.K.E. v Commission (6 Sept 2012) A party is not permitted to act itself but must use the service of a third person

authorised to practise before a court of a member state

Only a lawyer authorised to practise before a court of a MS may represent

Polish in-house lawyers are authorised to practise before Polish court

However, Court finds they are not independent

Statute of the Court imposes a necessary condition:

A lawyer representing a party before European Court is entitled to practise

before a Member State court.

That is not however a sufficient condition:

Every lawyer entitled to practise before a court of a MS is not automatically

allowed to act before the Courts of the EU.

Brussels Court of Appeal – (5 March 2013) (Dawn raid of Belgacom by

Belgian NCA)

Why in-house legal privilege matters - 1

In-house lawyers admitted to the bar are bound by the same professional and ethical rules (but perception matters)

Regulation 1/2003 imposes increasing responsibilities on undertakings to perform self-assessment to comply with competition law

Incentives to comply with competition law have increased, given the major legislative changes and the nature of penalties (corporate and personal)

Why in-house legal privilege matters - 2

Increased number of in-house competition lawyersGreater importance of their role and responsibilities In-house resource readily available to the business ex

ante (which fosters compliance)Key role in setting up corporate compliance programs In-house lawyers work closely with the business to ensure

compliance of commercial propositions In-house lawyers need to be able to follow-up on concerns

of potential breaches without fear of discoverySending everything outside is not possible

Key challenges in-house

Definition of an in-house lawyer

Who is likely to investigate? UK? EU? Others?

In UK, who is the client in a company?

Business people do not understand privilege

Fact-finding investigations and mock exercises

Email v phone

When to involve an external lawyer

MANY THANKS