European Court of Justice rules on legal professional privilege
15/09/2010

In our article ‘Precious Privilege’, published in the August 2010 edition of Without Prejudice, we commented, from a South African perspective, on the advice provided by the Advocate General of the European Court of Justice (ECJ) in Akzo Nobel Chemicals Limited v Commission of the European Communities concerning the extension of legal professional privilege to in-house lawyers.

In its decision on 14 September 2010, the ECJ found in accordance with the views expressed by the Advocate General and consequently held that in-house counsel have no right to legal professional privilege in cartel investigations carried out by the European Commission.

Akzo Nobel, which had built up strong support for its case across the European Union with several organisations, including the European Company Lawyers Association, American Corporate Counsel Association (ACCA) and the International Bar Association, intervening in support of the appeal, argued, without success, that legal professional privilege should be extended to in-house counsel. The decision has far reaching implications for companies who place particularly heavy reliance on the role of in-house counsel in ensuring competition law compliance.

In light of the well developed principles governing the doctrine of legal professional privilege under South African law, where the privilege is recognised as a legal right as opposed to a mere principle of evidence, it is anticipated that our Courts would be circumspect in following the ECJ in limiting the right to legal professional privilege to apply to external counsel only. Our laws preempt the issues contemplated by the ECJ by, in particular, excluding the protection of legal professional privilege from communications geared towards the commission of a crime or fraud, irrespective of whether or not the legal advisor was aware of such an intention.

In dealing with the potential evils proffered by the Advocate General, our Courts should, at most, seek to develop common law principles barring the privilege’s application to all communications which constitute sanctionable offences under the laws of South Africa, irrespective of whether or not these are strictly criminal or fraudulent in nature. This would certainly pose a favourable alternative to entirely removing the right to privilege insofar as it applies to communications with in-house legal counsel (for a more comprehesive discussion please see our article at http://www.adamsadams.com/index.php/news/article/Precious_privilegePrecious_privilege/
Jac Marais
Senior Associate
jac-m@adamsadams.co.za
Andrew Molver
Professional Assistant
andrew-m@adamsadams.co.za