In-house lawyers and legal privilege in competition law investigations Paolo Palmigiano, Solicitor Head of Competition Law, Group Legal Lloyds Banking Group CLA, 29 April 2013

Summary Introduction Key cases Why legal privilege for in-house lawyers matters Key challenges for in-house lawyers

Introduction Legal privilege and rules on discovery In Europe, rules about discovery, privilege and in-house lawyers differ considerably UK : litigation privilege and legal advice privilege Italy (and civil law jurisdictions): duty of professional confidentiality and roles in-house EU : legal privilege does not apply to in-house lawyers

Importance of LPP in competition law Competition authorities (Commission and NCAs) have wide-ranging powers to request information Formal requests for information Dawn raids Access to the premises Documents (electronic or not) Interviews

Key cases - 1 AM & S Europe v Commission (case C155/79) Akzo – ECJ judgment of 14 September 2010 - facts In EU competition law investigations, in-house lawyers cannot benefit from legal professional privilege, even if they are subject to national professional rules. Their independence is compromised by the employment relationship Reasoning Lack of independence (notwithstanding professional rules and safeguards) There is no unequal treatment Different situation in various member states – no predominant trend Modernisation (and self-assessment) has not changed the role Right of defense and principle of legal certainty unaffected No violation of principle of national autonomy in procedural matters

Key cases - 2 P.U.K.E. v Commission (6 Sept 2012) A party is not permitted to act itself but must use the service of a third person authorised to practise before a court of a member state Only a lawyer authorised to practise before a court of a MS may represent Polish in-house lawyers are authorised to practise before Polish court However, Court finds they are not independent Statute of the Court imposes a necessary condition: A lawyer representing a party before European Court is entitled to practise before a Member State court. That is not however a sufficient condition: Every lawyer entitled to practise before a court of a MS is not automatically allowed to act before the Courts of the EU. Brussels Court of Appeal – (5 March 2013) (Dawn raid of Belgacom by Belgian NCA)

Why in-house legal privilege matters - 1 In-house lawyers admitted to the bar are bound by the same professional and ethical rules (but perception matters) Regulation 1/2003 imposes increasing responsibilities on undertakings to perform self-assessment to comply with competition law Incentives to comply with competition law have increased, given the major legislative changes and the nature of penalties (corporate and personal)

Why in-house legal privilege matters - 2 Increased number of in-house competition lawyers Greater importance of their role and responsibilities In-house resource readily available to the business ex ante (which fosters compliance) Key role in setting up corporate compliance programs In-house lawyers work closely with the business to ensure compliance of commercial propositions In-house lawyers need to be able to follow-up on concerns of potential breaches without fear of discovery Sending everything outside is not possible

Key challenges in-house Definition of an in-house lawyer Who is likely to investigate? UK? EU? Others? In UK, who is the client in a company? Business people do not understand privilege Fact-finding investigations and mock exercises Email v phone When to involve an external lawyer

MANY THANKS