Under Belgian law, legal advice provided by in-house counsel to their employers is covered by the protection for legal privilege.  That is the conclusion reached by the Brussels Court of Appeal in its judgment of 5 March 2013 in the Belgacom case (Case 2011/MR/3).  In addition to the legal advice itself, the legal privilege covers all related correspondence, requests for advice, and documents created in preparation of the advice. 

The Belgacom judgment was preceded by inspections conducted by the Belgian Competition Authority (“BCA”) on the premises of Belgacom, the Belgian telecommunications incumbent, during which the BCA seized a large amount of electronic data including documents prepared by or addressed to Belgacom’s in-house counsel.  The BCA dismissed Belgacom’s claims that those documents were covered by legal privilege and should be deleted from the file.  Belgacom thus brought the case before the Brussels Court of Appeal.

The Court of Appeal sided with Belgacom, reasoning that:

(i)        The Belgian Act of 2000 establishing the Belgian Institute for Company Lawyers (“IJE”) provides that “advice given by company lawyers [who are members of the IJE] to their employer in the framework of their activity as legal counsel, is confidential”.  The legislative history to the 2000 IJE Act specifies that in-house counsel accomplish a task of general interest to “ensure correct application of the law by companies”.  Therefore, companies “must be able to obtain exhaustive and independent advice from their in-house legal counsel”.  As a result, advice by in-house counsel (and related correspondence and preparatory materials) deserves adequate protection.

(ii)      Article 8 of the European Convention on Human Rights (“ECHR”) – similarly to Article 7 of the EU Charter of Fundamental Rights (“EU Charter”) – protects the confidentiality of all correspondence between individuals under the right to privacy.  It provides particularly strong safeguards for exchanges involving persons tasked with a mission of general interest.  Because the task fulfilled by in-house counsel is one of general interest, the Court of Appeal concluded that refusing legal privilege protection to advice from in-house counsel would amount to a disproportionate interference with the companies’ right to privacy.

(iii)      The CJEU Akzo case (Case C-550/07 P, Akzo v. Commission) – which denies legal privilege protection to advice from in-house counsel – does not apply on the national level, including when the BCA enforces EU competition law rules.  This is because Belgium and the EU represent two different legal orders, as illustrated by the application of national law during inspections carried out by national competition authorities at the Commission’s request (see Article 22 of EU Regulation 1/2003).

The Brussels Court of Appeal thus settled the issue at the Belgian level:  legal advice from in-house counsel is protected by legal privilege.  The Belgacom judgment is unlikely to have wider implications on the EU level.  It is true that the Brussels Court of Appeal based its judgment on the right to privacy protected by Article 8 of the ECHR and Article 7 of the EU Charter but this will not have sufficient weight to convince the EU courts to change their established case law.

This situation could give rise to complex issues during EU investigations.  The Belgacom judgment confirms that advice from in-house counsel will be protected even during EU investigations as long as they are carried out by the BCA at the Commission’s request.  Such situations – where the BCA would be investigating a company’s premises without the Commission – will however be very rare.  The same protection is unlikely to apply in inspections conducted by the Commission, during which the BCA would only provide assistance.  But this has not been tested so far.

Undoubtedly, pharmaceutical companies would welcome if such wider protection of internal documents applied globally throughout the EU.  That is especially the case in light of recent developments pushing for modernisation of Commission’s investigation powers (see the Commission’s revised Explanatory Note on Inspections) on the one hand, and for broader access to investigation files for private plaintiffs by both the CJEU (see recent judgment in Donau Chemie case) and the Commission (see the Commission’s proposal for a directive on actions for damages for infringements of competition law provisions) on the other.