LawSoc lashes out at 'outrageous' Akzo privilege ruling

The Law Society has branded as "outrageous" and "foolish" last week's European ruling that communication between in-house lawyers and internal clients should not benefit from the same legal protection as that between companies and their external advisers.

Commenting on last week's judgment in the European Court of First Instance, Law Society chief executive Des Hudson expressed deep concerns that the ruling would set back developments made in improving business practice.

He said: "It is an outrageous suggestion that the advice given by solicitors should not be afforded the same level of protection merely because of their employed status. This inequality between members of the same profession is unsustainable."

The ruling was delivered in response to a complaint by Dutch chemical giant Akzo Nobel against the European Commission (EC) over the status of lawyer-client confidentiality.

Akzo Nobel complained when the EC seized documents during a 2003 investigation into price-fixing - a complaint backed by lawyers' associations including the Law Society, which has lobbied to highlight the role played by in-house counsel in maintaining good corporate governance.

Hudson said the ruling appeared to run counter to EC moves to improve compliance within companies, adding: "It appears to be a foolish move by the court not to refresh its case law to reflect the realities of the 21st century. The role of in-house counsel has greatly evolved since 1982."

As part of the ruling, the court held that EC had infringed confidentiality when it forced Akzo Nobel subsidiary Akcros Chemicals to allow it a "cursory glance" at documents.

Akzo Nobel is a multinational pharmaceuticals, chemicals and healthcare company with annual revenues of €13bn (£9bn) and 62,000 employees worldwide.