ECJ’s view on attorney-client privilege: When will professional secrecy apply? What is the view from Turkey?

Imagine that you consult a legal issue with your lawyer. You most likely would want the discussion between you and your lawyer to be kept between the two of you. Indeed, this is the reason why correspondence between attorneys and clients is privileged. In this regard, the European Court of Justice (“ECJ”) recently rendered a game-changing decision[1] (“Belgian Tax Decision”) providing its current view on attorney-client privilege. This article discusses the ECJ’s assessment on the attorney-client privilege as well as the Turkish Competition Board’s standpoint in terms of the validity of the professional privilege on documents that are seized by case handlers during an on-site inspection.

What exactly is the attorney-client privilege?

Attorney-client privilege is "a client's right to refuse to disclose and to prevent any other person from disclosing confidential communications between the client and the attorney.[2] The ECJ and the Turkish Competition Board foresee two cumulative criteria that must be met to benefit from the attorney-client privilege.

The first criterion is that the correspondence must be between an independent lawyer and its client. An independent lawyer exists when there is no employee-employer relationship between the attorney and the client.[3] Accordingly, correspondence by and to in-house lawyers does not benefit from legal professional privilege.[4]

In Hilti v. Commission,[5] the ECJ decided that documents that are prepared by an in-house lawyer in conjunction with an outside legal adviser should benefit from legal secrecy. In Akzo Nobel & Akcros v. Commission,[6] the ECJ found that documents concerning a competition compliance program are considered within the scope of the right to defence and thus would benefit from legal professional privilege, provided that the independent lawyer criterion is satisfied.

The second criterion is that the correspondence must serve the use of the right to defence. Correspondence between an independent attorney and their client cannot be included in the scope of the attorney-client privilege unless it is directly related to the exercise of the right to defence. Accordingly, in order to be considered as exercising the right to defence, as a principle, the correspondence should relate to an examination or an inquiry of an independent lawyer’s opinion. On this note, in AM&S v. Commission,[7] the ECJ emphasised that the attorney-client privilege extends to include correspondence between an external lawyer and an undertaking that took place before the launch of an investigation. The ECJ grounds its assessment by arguing that the relevant correspondence may relate to the investigation, even though the communication took place before the European Commission’s investigation decision. To that end, in AM&S v. Commission, the ECJ highlighted that while investigating competition law violations, the Commission is not entitled to examine the undertakings’ earlier written communications with their external lawyer, provided that they have a relationship to the subject matter of that procedure.[8]

ECJ’s game-changing decision: The Belgian Tax Decision

As set forth above, the ECJ has been assessing legal professional privilege within the scope of the right to defence.[9] However, contrary to its previous case law, in the Belgian Tax Decision, the ECJ based the attorney-client privilege on the principle of the protection of private life.[10]

Referring to the European Court on Human Right’s Altay v. Turkey case of 9 April 2019, the ECJ emphasised that exchanges between lawyers and their clients are afforded strengthened protection and underlined that protection covers not only the activity of defence but also legal advice. The ECJ further explained that individuals who consult a lawyer can reasonably expect that their communication is private and confidential. Accordingly, attorney-client privilege guarantees the secrecy of legal consultation. Therefore, the ECJ ruled that, as a rule, those persons must have a legitimate expectation that their lawyer will not disclose to anyone, without their consent, that they are consulting him or her, or the content of the consultation.[11]

Decisional practice of the Turkish Competition Board

The case handlers of the Turkish Competition Authority are vested with the authority to review and seize documents of all kinds. However, this authority is limited by legal professional secrecy. In assessing the attorney-client privilege, the Turkish Competition Board requires the satisfaction of the same two criteria as the ECJ.

The Board in its Dow decision,[12] indicates that all correspondence with an independent attorney is to be considered within the scope of the attorney-client privilege, provided that the communication concerns the exercise of the right to defence. The Board rationalises this criterion with the following argument: The purpose of this protection is to ensure that those who receive consultancy do not worry that the information obtained and the correspondence could be revealed without their consent, and to allow them to provide all of their information to their lawyers such that they can use their defence rights effectively.[13] To illustrate, the Board states that an independent lawyer’s opinion on whether an undertaking’s agreement violates competition law rules would benefit from the privilege.

On the other hand, the Board makes it clear that correspondence that supports how an undertaking could infringe competition law is not considered within the scope of legal secrecy. In Enerjisa, the Board examined whether a competition law compliance report prepared by external lawyers would be considered within the scope of the use of an undertaking’s right to defence.

The Board concluded that the seized documents are not related to the use of right to defence and rejected to return the relevant correspondence. Although the administrative court of first instance cancelled the Board’s decision, the court of second instance reversed the cancelling and the highest administrative court, the Council of State, upheld the court of second instance’s decision. The reasoning was that such a report could serve to conceal a potential competition law violation and that there was no competition law investigation carried out by the Competition Authority or any judicial procedure initiated against a Board decision. Accordingly, it was resolved that the compliance report should not be granted a privileged treatment. Hence, under Turkish law, documents that show an undertaking’s competition law compliance efforts/results do not enjoy legal secrecy, even if they are prepared by independent attorneys.

Conclusion

The attorney-client privilege has always been considered within the scope of the right to defence by the ECJ. However, further to the Belgian Tax Decision, the ECJ now considers the privilege within the scope of respect for private life instead of right to privacy, thus widening the application of legal professional privilege. It is a matter of great curiosity whether (and how) the ECJ’s decision will affect local competition authorities, including the Turkish Competition Authority.

[1] C-694/20, Orde van Vlaamse Balies, IG, Belgian Association of Tax Lawyers, CD, JU v Vlaamse Regering, dated 08.12.2022.

[2] "Attorney–client privilege", Black's Law Dictionary, p. 1391 col. 2 (Bryan A. Garner 10th ed. 2014).

[3] 155/79, AM&S Europe v Commission, dated 18.05.1982, para. 21-26; C-550/07 P, Akzo Nobel & Akcros v Commission, dated 14.09.2010, para. 40-119.

[4] T-24/05, Alliance One International, Inc. And Others v Commission, dated 27.10.2010; 85/79/EEC, John Deere, dated 14.12.1984; 88/589/EEC, London European-Sabena, dated 04.11.1988.

[5] T-30/89, Hilti v. European Commission.

[6] C550/07, Akzo Nobel & Akcros v Commission.

[7] C-155/79, AM&S Europe Limited v Commission.

[8] C-155/79, AM&S Europe Limited v Commission, para. 23.

[9] T-30/89, Hilti v Commission; C550/07, Akzo Nobel & Akcros v Commission.

[10] The Belgian Tax Decision, paras. 27-33.

[11] The Belgian Tax Decision, para. 27.

[12] Turkish Competition Board’s Dow decision, dated 02.12.2015 and numbered 15-42/690-259.

[13] Turkish Competition Board’s IGMD decision, dated 20.06.2019 and numbered 19-22/352-158; Warner Bros decision, dated 17.01.2019 and numbered 19-04/36-14; Enerjisa decision, dated 06.12.2016 and numbered 16-42/686-314; Dow decision, dated 02.12.2015 and numbered 15-42/690-259; CNR decision, dated 20.08.2014 and numbered 14-29/596-262.

Tagged with: Gen & Temizer | Özer, Bulut Girgin, Simru Tayfun, Competition, Turkish Competition Board