24/06/13

Legal Advice of In-house Counsel Protected by Duty of Confidentiality

The Belgian Act of 1 March 2000 provides that legal advice rendered by in-house counsel is considered confidential when the company lawyer is acting as a legal advisor, intellectually independent of his or her employer (Art. 5). It should be noted that only in-house counsel who are members of the Institute of Company Lawyers (Intituut voor bedrijfsjuristen/Institut des juristes d'entreprise) are protected by this rule.

The Belgian Act of 1 March 2000 provides that legal advice rendered by in-house counsel is considered confidential when the company lawyer is acting as a legal advisor, intellectually independent of his or her employer (Art. 5). It should be noted that only in-house counsel who are members of the Institute of Company Lawyers (Intituut voor bedrijfsjuristen/Institut des juristes d'entreprise) are protected by this rule.

The issue of whether the advice of in-house counsel can be protected before a court of law has been the subject of much debate. In Europe, the prevailing opinion is that in-house counsel cannot rely on the attorney-client privilege. The Court of Justice has confirmed this position in two decisions (AM&S, 18 May 1982, and Akzo, 14 Sept. 2010). The latter case involved a Dutch attorney who was employed by Akzo. The Court noted that in order to benefit from the attorney-client privilege, the lawyer must be independent and that only practicing members of the bar (i.e. non-in-house lawyers), who by definition are self-employed, are deemed to possess the requisite independence. In the US, on the other hand, it is generally accepted that advice rendered by in-house counsel, for the primary purpose of legal assistance, is protected by the attorney-client privilege.

In a decision of 5 March 2013, however, the Brussels Court of Appeal ruled that the Belgian antitrust authorities cannot seize legal advice prepared by in-house counsel for the company, in view of the duty of confidentiality provided for by Article 5 of the Act of 1 March 2000. According to the court, this duty of confidentiality extends only to legal advice and does not cover all activity of in-house counsel. Indeed, the purpose of this provision is to ensure that companies, in particular, and employers, in general, have access to independent and exhaustive legal advice, thereby ensuring that they are able to correctly apply the law. This duty of confidentiality also extends to correspondence and documents exchanged in preparation for the provision of legal advice as well as draft advice. The appellate court further held that Akzo applies only to European antitrust proceedings, whereas national antitrust proceedings are governed by national rules.

This decision of the Belgian appellate court constitutes a major step towards acknowledging that legal advice rendered by in-house counsel should be afforded the same level of protection as under the attorney-client privilege.

Likewise, on 15 March 2013, the Dutch Supreme Court rendered a decision in a case involving a lawyer and member of the bar who worked in-house for a Dutch company. The Hoge Raad held that the lawyer, although not self-employed, was entitled to rely on the attorney-client privilege with respect to information exchanged during meetings which he attended in his capacity as a legal advisor.

These decisions derogate from the prevailing opinion that the legal advice of in-house counsel does not benefit from the same level of protection as that afforded by the attorney-client privilege. In both cases, however, the client (the employer) should be able to freely communicate all necessary information to ensure the best legal advice, which may not subsequently be used against it.

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