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In-house Lawyers Face EU Setback

The European Court of Justice's advocate general issued an opinion Thursday in Akzo Novel v. Commission, the closely watched case in which Akzo Nobel challenged the longstanding European principle that attorney-client privilege applies only to outside lawyers, not in-house counsel.

In 2007, the European Court of First Instance upheld the old standard, and Advocate General Julianne Kokott's April 29 opinion fell in line with that reasoning.

"[A]n enrolled in-house lawyer is less able to deal effectively with any conflicts of interest between his professional obligations and the aims and wishes of his client than an external lawyer," she wrote.

In a statement, the Association of Corporate Counsel and its European chapter, intervenors in the Azko case, called Kokott's opinion "extremely disappointing, reflecting fundamental misunderstanding of both the role and responsibilities of in-house counsel, and the impact of financial renumeration on any lawyer retained by a client to represent the client's legal interests."

Although the advocate general's opinion is nonbinding, a final ruling is expected later this year, and the WSJ's Real Time Brussels blog notes that "judges often follow the advocate general's line of reasoning."

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