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ECJ Limits Attorney-Client Privilege for In House Counsel

By Jason Beahm on September 23, 2010 9:54 AM

In house counsel counting of the benefit of attorney-client privilege were dealt a decisive blow this week by the European Court of Justice, the European Union's highest court. The ECJ soundly rejected arguments from a Dutch chemical company that had asserted attorney-client privilege, or legal professional privilege, over communications between employees and in house attorneys.

The ECJ's advocate general issued an advisory opinion in April which meant that the court was likely to rule in favor of limiting attorney-client privilege when asserted by in house counsel. The Wall Street Journal reports that in 1982, the ECJ made a ruling that exempted in house counsel from the protections of attorney-client privilege. The court found that because the lawyers are employees of the company, they cannot give independent advice and therefore, attorney-client privilege does not apply. This is in stark contrast to the law in the United States, where in house attorneys receive protection under attorney-client privilege.

The court has not released its full opinion, but released the following statement: "The Court considers that the current legal situation in the Member States does not justify consideration of a change in the case law towards granting in-house lawyers the benefit of legal professional privilege."

If your company operates in the European Union, now would be a good time to analyze what the decision means to you and your business. As the ruling goes back to 1982, hopefully the decision isn't a shock, but even if you had no idea that the EU dealt with attorney-client privilege, it's not too late to take a look at your company and see what kind of impact the lack of privilege creates, and how you can take steps to compensate.

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