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04 April 2013
In its long-awaited decision of March 5 2013, the Brussels Court of Appeal held that advice drafted by in-house legal counsel is to be considered as covered by legal professional privilege when facing an investigation under the Competition Act.
The decision was issued on an appeal made by Belgacom, the largest telecommunications operator in Belgium, against the Competition Authority's seizure of electronic documents and emails to and from its in-house legal counsel during a 2010 dawn raid.
In its reasoning, the court first referred to Article 5 of the Act of March 1 2000, which established the Institute of In-house Legal Counsel and states that advice given by in-house legal counsel for the benefit of their employers in the framework of their work as legal counsel is confidential. The court also referred to Article 8 of the European Convention on Human Rights, which protects the right to a private and family life. Based on these two articles, the court concluded that the Competition Authority does not have the right to seize documents containing legal advice from in-house counsel during dawn raids.
The court held that legal professional privilege extends not only to legal advice given by in-house counsel, but also to:
However, legal professional privilege applies only to in-house counsel that are members of the Institute of In-house Legal Counsel. The legal advice loses its professional privilege protection as soon as it is disclosed to a person outside the company.
This decision departs from the established case law of European courts (eg, the Akzo cases) and the practice of several national competition authorities, including the Belgian Competition Authority. The Act of March 1 2000 introduced confidentiality for legal advice drafted by in-house legal counsel after July 14 2000 (ie, the date of its entry into force). However, following the first Akzo decision, the Competition Authority addressed a letter to the Institute of In-house Legal Counsel warning that from April 10 2008 onwards, it would no longer consider the legal advice of in-house counsel as protected by legal professional privilege and would thus proceed to seize such legal advice during dawn raids. The Court of Appeal decision thus overrules this practice.
In practical terms, the court's decision allows companies to oppose the seizure of documents drafted by their in-house counsel during dawn raids by the Competition Authority; the same applies to dawn raids carried out by the Competition Authority at the request of the European Commission or of another national competition authority. However, companies will not be able to oppose such seizures during dawn raids carried out by the European Commission alone or by the European Commission with the help of the Belgian Competition Authority, as in such cases the Akzo rules denying legal professional privilege to in-house legal counsel remain in force. In-house legal counsel in Belgium therefore must remain vigilant when drafting legal advice for their employers and bear in mind that it could feasibly be seized by the European Commission.
The Competition Authority has already indicated that it is considering appealing the appellate court's decision before the Supreme Court.
For further information on this topic please contact Carmen Verdonck or Jenna Auwerx at ALTIUS by telephone (+32 2 426 1414), fax (+32 2 426 2030) or email (firstname.lastname@example.org or email@example.com).
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