Short Reads

Safeguarding legal privilege: better safe than sorry?

Safeguarding legal privilege: better safe than sorry?

Safeguarding legal privilege: better safe than sorry?

07.11.2019 NL law

The European Court of Justice recently ruled that the European Commission does not have to take additional precautionary measures to respect the right of legal professional privilege when conducting a new dawn raid at the same company. Companies are well-advised to mark clearly all communications covered by legal privilege as 'privileged and confidential' and to keep all privileged communication separate from other communication.

However, solely marking communication as privileged and confidential does not automatically make it so; the CMA imposed a GBP 20,000 fine on technology company Sabre for (initially) having ‘over-designated’ documents as privileged. Companies should always verify whether the documents have been rightfully designated as privileged by checking their contents.

ECJ dismisses appeal by Alcogroup on alleged violations of legal privilege

On 17 October 2019, the ECJ dismissed an appeal by Alcogroup N.V. and Alcodis N.V. (together: Alcogroup) concerning the treatment of privileged documents following dawn raids by the Commission in two parallel investigations.

In this case, the Commission carried out two separate inspections at Alcogroup's premises. The first inspection took place in October 2014 and concerned potential collusion in the oil and biofuel markets. The second inspection followed in March 2015; this time however it concerned potential coordination and information exchanges relating to bio-ethanol sales.

Following the first inspection, Alcogroup's lawyers exchanged with their client numerous e-mails and memoranda containing legal advice on the subject matter of the first inspection. These communications were marked as 'legally privileged'. During the second inspection, a number of these documents showed up as part of the Commission's digital sweep, but were ultimately tagged by the Commission as legally privileged and separated from the Commission's file (with the exception of one document). Alcogroup subsequently sent a letter to the Commission requesting the suspension of its second investigation, as it considered that the Commission had violated its rights of defence by potentially reviewing legally privileged documents during that second inspection. The Commission responded with a letter stating that those concerns were unwarranted, as it had not yet taken a position as to the privileged nature of the documents concerned. Alcogroup lodged an appeal to the General Court (GC) on the legality of the second inspection decision and the Commission's letter.

The GC ruled that Alcogroup's appeal was inadmissible. The GC held that (i) the Commission's second inspection decision could not have been impacted, as the alleged violation of Alcogroup's rights of defence could only have arisen after that decision was taken, and (ii) the Commission's letter did not amount to a 'decision' affecting Alcogroup's legal position. 

On further appeal, the ECJ upheld the GC's ruling. In particular, the ECJ dismissed Alcogroup's contention that the second inspection decision should have included special "precautionary measures" to prevent the Commission from reviewing legally privileged advice that was drafted specifically as a result of the first inspection. The ECJ confirmed that the Commission is in any event bound to respect the rights of defence and treatment of privileged information as a matter of law, and that the lack of additional 'precautionary measures' in this case could not lead the inspectors to believe that it should treat such information any differently during its second inspection. To the extent the Commission would have violated Alcogroup's rights of defence, the parties could raise these concerns in their appeal against the Commission's ultimate infringement decision. As the Commission had taken no decision with legal effects, the ECJ confirmed the inadmissibility of Alcogroup's appeal.

CMA fines Sabre for incorrectly claiming legal privilege over certain documents

On 11 October 2019, the Competition and Markets Authority (CMA) CMA published its decision to fine Sabre Corporation GBP 20,000 for failing to submit relevant documents on time during its merger control review of Sabre's intended acquisition of Farelogix Inc.

The CMA had asked Sabre to provide all documents in its possession relating to certain specific topics, including the methodology used to retrieve such documents. Sabre's lawyers based their initial document submission to the CMA on a similar submission it had made to the DOJ in the context of merger control proceedings in the US. This submission excluded a large number of documents that were marked as legally privileged. Subsequently, however, two months after the deadline for its initial response, Sabre submitted 444 additional documents in response to the CMA's questions. Sabre explained that, after further review, these documents appeared to have been erroneously classified as privileged.

The CMA held that, even though it was aware that Sabre intended to base its submission on the files submitted in the US procedure, it could not have been aware that a large number of documents, which had been submitted in response to the CMA’s specific requests, would be withheld as a result of an incorrect assessment of legal privilege. The CMA stressed that it is the parties' responsibility to ensure that all relevant material is produced on time in response to its requests. The CMA considered that Sabre could not simply rely on foreign submissions, but had to independently assess its document submissions to the CMA and ensure that all relevant information would be produced. In that context, the CMA took note of the fact that Sabre had not submitted any information on the methodology according to which it had withheld (potentially) privileged information in its initial response.

Conclusion

In conclusion, both cases once again highlight the importance of ensuring that meticulous safeguards are put in place with respect to the selection and review of legally privileged documents.

 

This article was published in the Competition Newsletter of November 2019. Other articles in this newsletter:

 

Team

Related news

09.01.2020 NL law
Deleting WhatsApp chats during dawn raids may cost you dearly

Short Reads - Companies should be aware that the Dutch competition authority (ACM) will not only examine electronic records and emails, but can also check WhatsApp messages during dawn raids. The ACM recently imposed a fine of EUR 1.84 million on a company for non-cooperation with a dawn raid; its highest fine so far for non-cooperation. Several of the company’s employees had left WhatsApp groups and deleted chats before handing over their mobile phones for inspection.

Read more

16.01.2020 NL law
De Amsterdamse milieuzone voor brom- en snorfietsen: voertuigen van een bepaald jaar weren is mogelijk bij ontbreken van een redelijk alternatief

Short Reads - ABRvS 20 november 2019, ECLI:NL:RVS:2019:3865 Deze blog is het vierde deel in een reeks Stibbeblogs over gemeentelijke milieuzones. In 2017 oordeelde de Afdeling over de milieuzone voor personen- en bestelauto’s met dieselmotoren in Utrecht. In 2018 presenteerde de staatssecretaris van Infrastructuur en Waterstaat haar beleid voor harmonisatie van uiteenlopende gemeentelijke milieuzones. Een jaar geleden maakten wij in een FAQ de balans op over de harmonisatie van milieuzones.

Read more

09.01.2020 NL law
Access to the file in Dutch competition procedures: too little too late?

Short Reads - Companies beware: the ACM’s and European Commission’s approach to access to the file are not aligned. According to an interim relief judge, the ACM cannot be forced to grant a company access to a broader set of documents in competition procedures. A potential error in the administrative procedure can be remedied before a court at a later stage. This is different to the right to access to the Commission’s file during administrative procedures, as acknowledged in EU case law.

Read more

10.01.2020 NL law
Is het mededingingsrecht de reddingsboei van zwakke zzp’ers?

Articles - Het toenemende aantal zzp'ers heeft ook mededingingsrechtelijke gevolgen. Volgens de ACM werkt de markt namelijk niet goed als zzp'ers door lage uurtarieven onder het bestaansminimum komen. Jan Truijens Martinez en Simone Evans bespreken in het Tijdschrift voor Arbeidsrecht in Context hoe eventuele belemmeringen die het mededingingsrecht opwerpt bij de bescherming van zzp'ers kunnen worden beperkt en of het mededingingsrecht eigenlijk wel het juiste instrument daarvoor is? 

Read more

09.01.2020 NL law
Competition rules and globalisation to face off in 2020

Short Reads - 2020 will likely revolve around the question whether competition rules should yield to globalisation and digitisation, with suggestions ranging from mere tweaks to competition rules to complementary regulation. Greater cooperation across data protection, consumer protection and competition law appears inevitable. Speedier solutions in more informal settings may become a reality, alongside more frequent use of behavioural remedies.

Read more

Our website uses functional cookies for the functioning of the website and analytic cookies that enable us to generate aggregated visitor data. We also use other cookies, such as third party tracking cookies - please indicate whether you agree to the use of these other cookies:

Privacy – en cookieverklaring