• Email Is Trouble: Latest News for Multinational Businesses is that In-House Counsels’ Emails to Business Units in Europe Will Not Be Privileged
  • September 28, 2010 | Authors: Christina H. Bost Seaton; John P. Hutchins
  • Law Firms: Troutman Sanders LLP - New York Office ; Troutman Sanders LLP - Atlanta Office
  • Email is ubiquitous, for better or for worse. But one of the pieces of advice we steadfastly give our clients is to avoid it where possible. It’s even a good idea to implement programs, processes and systems that encourage less use and retention of email. Programs like “email free Fridays,” systems that regularly purge stored emails, and “culture education” that trains and reminds employees of appropriate vs. inappropriate email use are a few examples of things that work. We all need to be reminded that picking up the telephone is still a pretty good way to communicate, and it doesn’t create the unintended (or unattended to) paper trail that comes with email.

    Last week, we learned of one more good reason why certain uses of email -- particularly, email that communicates or requests legal advice -- should be curbed or avoided. In an appeal brought by Azko Nobel NV during the course of an European Commission competition investigation, the European Court of Justice (Europe’s highest court) found that, in Europe, the attorney-client privilege does not protect legal advice given by in-house counsel from disclosure or discovery in investigations brought by the European Commission. Although this ruling is somewhat limited in scope, it is troubling in its implications.

    While courts in the United Kingdom (like in the U.S) extend the attorney-client privilege to all lawyers, including in-house counsel, many continental European countries have long held that the attorney-client privilege is restricted to outside counsel, who are believed to be more “independent” and “not bound to the client by a relationship of employment.” The ECJ’s ruling adopts this more restrictive view, stating that the legal landscape “has not evolved...to an extent which would justify a change in the case law and recognition for in-house lawyers of the benefit of legal professional privilege.”

    More particularly, the ECJ stated:

    An in-house lawyer, despite his enrollment with a Bar or Law Society and the professional ethical obligations to which he is, as a result, subject, does not enjoy the same degree of independence from his employer as a lawyer working in an external law firm does in relation to his client. Consequently, an in-house lawyer is less able to deal effectively with any conflicts between his professional obligations and the aims of his client.

    While the ECJ’s ruling only applies to European Union competition law investigations by the European Commission, its firm statements as to in-house counsels’ perceived lack of independence indicate that the ECJ is unlikely to extend the attorney-client privilege to in-house counsel any time soon and gives those who advocate for a more limited application of the privilege another decision supporting their position.

    Of course, email communications regarding legal advice are widespread. It should be discouraged, however, and in-house counsel of businesses with European operations now have even more reason to be especially wary. While in-house counsel in the U.S. likely expect that their communications are protected by the attorney-client privilege, they cannot expect such protection to extend to continental Europe. Even including European personnel as “cc or “bcc” on emails to in-house clients within the U.S. is dangerous, as it could create vulnerability to an argument that the privilege has been waived by including European personnel who perhaps are not protected by the privilege.

    Before hitting send on that email, in-house counsel should consider the possibility that it could be subject to discovery. Likewise, requests for legal advice in emails should be avoided. Using the telephone for these kinds of communications is highly preferable. Even if no privilege protects telephone communications with European personnel, oral conversations are much more difficult for witnesses to remember with clarity months or years after they have occurred. And emails, taken out of context and often missing the “tone” that was intended by the sender, are open for interpretation. The ECJ’s latest decision echoes the warning signs that have been present since early in the days of email. Hitting “send” can be hazardous. Organizations should consider how to encourage more responsible and careful use of this communication tool.