On 5 March 2013, the Brussels Court of Appeal delivered a landmark judgment finding that in-house lawyers' communications benefit from the so-called "legal professional privilege" ("LPP"), i.e. they are protected by the confidentiality of communications between lawyers and their clients.
The Court's judgment settles a dispute that arose following the inspections carried out by the Belgian Competition Authority at the premises of Belgian telecommunications company Belgacom in 2010. During these inspections, large quantities of documents were seized, including internal emails containing advice given by Belgacom's in-house lawyers. The Belgian Competition Authority considered that these emails were not protected by legal professional privilege and could thus be used as evidence in the investigation.
Belgacom subsequently lodged an appeal on this issue before the Brussels Court of Appeal. In its judgment of 5 March 2013, the Court first noted that the legislation governing the Belgian Institute of Company Lawyers (Law of 1 March 2000) provides for the confidentiality of advice given by in-house lawyers. The concept of "advice" in this respect is construed broadly as including requests for advice, any correspondence relating to such requests, draft advice as well as all preparatory documents used as background to the advice. The Court also analysed the issue at hand by reference to the right to privacy enshrined in Article 8 of the European Convention on Human Rights. According to the Court, Article 8 ECHR grants a higher level of protection to correspondence of individuals entrusted with a mission of general interest, where the success of that mission depends on confidentiality of this correspondence. The Court noted that this is the case for in-house lawyers, as their employers must be confident that their requests for advice will not be disclosed to third parties. On this basis, the Court concluded that correspondence relating to in-house lawyers' advice is protected by legal professional privilege. It is, however, unclear which in-house lawyers can benefit from this protection but, as the Court partly bases its reasoning on the Law of 1 March 2000 and makes explicit references to lawyers affiliated to the Belgian Institute of Company Lawyers, it is arguable that its reasoning only applies to those affiliated lawyers.
This judgment stands in contrast to the Akzo judgment adopted on 14 September 2010 by the European Court of Justice (ECJ). In Akzo, the ECJ established that under EU law, correspondence from or addressed to a lawyer is not protected by legal professional privilege if the lawyer is bound to his client by an employment relationship (see VBB on Competition Law, Volume 2010, No. 9, available at www.vbb.com). The ECJ thus essentially excluded advice by in-house lawyers from protection by legal professional privilege. However, the Brussels Court of Appeal considered that there was no inconsistency between its ruling and EU case law since the European Commission's investigatory powers are different from those of national competition authorities. This difference can justify a distinction in the rules on legal professional privilege at EU level and at national level. Relying on Article 22 of Regulation 1/2003, the Brussels Court of Appeal further suggests that officials from the Belgian Competition Authority carrying out inspections must abide by the rule on LPP, even when they act on behalf of the European Commission, whereas EU officials in the same situation should follow the Akzo case law. It is not clear whether the Brussels Court of Appeal contemplates both the situation where the Belgian Competition Authority conducts an inspection on its own but at the request of the European Commission and the situation where the Belgian Competition Authority simply assists the European Commission during an inspection. In the latter case, the ruling of the Brussels Court of Appeal would lead to inextricable situations where, during the same inspection, EU officials would be allowed to look at more documents than their Belgian counterparts.
It should be noted that the issue of the scope of legal professional privilege also arose in other EU Member States. In a very recent judgment, the Dutch Supreme Court confirmed the existence of a general legal privilege for in-house lawyers (see VBB on Competition Law, Volume 2013, No. 3, p. 29, available at www.vbb.com). However, unlike in Belgium, this judgment is actually in line with the current practice of the Dutch Competition Authority (the "NMa"). Interestingly, in its practice, the NMa clearly distinguishes between the situation where it assists the European Commission during an inspection and the situation where it works on behalf of the Commission. In the former case, EU rules apply to both EU and Dutch officials and in-house legal advice is not protected by LPP; in the latter case, national rules apply and in-house legal advice is protected. Thus, not only Commission officials but also NMa officials are allowed to look at in-house lawyers' legal advice if the NMa simply assists the European Commission during an inspection. Conversely, the Dutch rules on LPP will apply if the inspection is carried out by the NMa on behalf of the Commission.
In the UK, communications of in-house lawyers are also protected by the LPP and the British Office of Fair Trading (OFT) in its 2004 guidelines on powers of investigation makes the same distinction between inspections carried out to assist the European Commission and inspections carried out by the OFT on behalf of the Commission. Like in the Netherlands, where the OFT simply assists the Commission, the scope of the LPP is limited to correspondence with external lawyers under the Akzo rule.
The above positions adopted by the competition authorities in the Netherlands and the UK call for a clarification of the exact scope of the recent judgment of the Brussels Court of Appeal and its connection with EU rules applicable to inspections conducted by the Commission. More generally, this discussion gives food for thought on the possible need for a harmonisation of LPP rules within the EU.
Separately, the Brussels Court of Appeal also addressed in its judgment other procedural pleas raised by Belgacom. The Court provided useful guidance on the kind of digital data to be considered within the scope of an inspection and the selection criteria to be used for inspecting and copying digital data. The Court made clear that officials cannot copy large volumes of digital data without first assessing whether this data is actually useful for the purpose of the investigation. The officials should make use of appropriate, precise and proportionate keywords in order to avoid "fishing expeditions". The Court also found that data older than 5 years from the date the case was referred to the Competition Authority cannot be considered to be within the scope of the investigation under Article 88(1) of the Belgian Competition Law. Finally, the Court established that an undertaking being prosecuted for antitrust matters in the bilingual Brussels region can choose that the procedure be carried out in either French or Dutch.
The Belgian Competition Authority has announced that it may challenge the judgment of the Brussels Court of Appeal before the Belgian Supreme Court.
