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Deal or No Deal, Brexit is a Big Loss for Privilege in the European Union

As the United Kingdom moves toward an exit from the European Union, the uncertainty of what Brexit will mean and what agreements will be reached is preoccupying businesses with UK operations and their legal counsel. In addition to helping the business navigate this uncertainty, in-house legal departments have been assessing how the potential changes to UK lawyers’ rights of practice in the European Union will affect their companies’ European legal matters.

One topic that is maybe not quite as urgent, but certainly no less important, is the impact that Brexit will have on legal professional privilege in Europe. Most businesses that rely on UK-licensed lawyers for legal advice are aware that unless an agreement is reached to the contrary, the United Kingdom’s exit from the European Union will strip its lawyers of their ability to practice before EU courts or have their legal advice attract legal professional privilege in the European Union.

As the global bar association for in-house counsel, the Association of Corporate Counsel (ACC) has always championed legal professional privilege as a necessary condition for effective corporate compliance. In Europe, ACC has worked to educate legislators, regulators, and business stakeholders about the value of legal professional privilege and advocating for the extension of legal professional privilege to in-house counsel before EU bodies and courts.

The United Kingdom’s exit from the European Union will have an outsize impact on efforts to bolster legal professional privilege in the European Union in two primary ways. First, without an agreement to the contrary, UK lawyers will lose the ability to assert privilege before EU bodies to protect their legal advice. Second, the United Kingdom has been a strong champion of privilege within the European Union, and it will lose its ability to influence on that issue as an EU member state.

UK lawyers will lose their legal professional privilege before EU bodies

While the focus on negotiations between the European Union and the United Kingdom has been to arrange for a transition period to provide for an orderly exit, the circumstances beyond such a transition period (if it even indeed comes to pass) are a huge unknown. For the legal sector, if there is no permanent agreement in place addressing the status of the UK’s legal professionals, then the UK’s lawyers will essentially be treated as third-country lawyers within the European Union.

This has a range of implications, not the least of which is that UK lawyers will lose their privileged status before the EU courts and governing bodies. With the United Kingdom having the largest legal sector in Europe, the loss of UK lawyers practicing before EU bodies is not insignificant. That is why we have seen thousands of UK solicitors join the roll of the Irish Law Society or apply to re-qualify in another EU member state. Indeed, the attention being paid to UK lawyers’ future status within the European Union highlights the limited view that EU courts have of legal professional privilege.

Essentially, EU courts only recognize privilege for advice given by external lawyers who are admitted in an EU or European Economic Area (EEA) member state. As a result, multinational companies have had to carefully arrange their legal affairs in a manner that protects privilege under a system that does not accord privilege to in-house counsel or even to external lawyers not admitted to practice in EU member states.

UK lawyers were often the beneficiaries of this EU precedent that requires an EU-admitted lawyer to enjoy full privilege protection because of the United Kingdom’s status as a center of business. Not only European companies, but also those based in the Americas, would retain UK lawyers to lead EU legal matters where the maintenance of privilege and consistent representation before EU bodies was important.

Once the United Kingdom exits the European Union, UK lawyers will have to rely on admission to another EU or EEA member state to continue to enjoy their privileged status before the EU courts and governing bodies. Clients will also need to be vigilant to ensure that legal advice related to matters that may come before EU bodies is provided by lawyers who are admitted in an EU member state. These limitations around Europe’s largest legal sector are likely to have a negative impact on clients.

UK influence on EU privilege issues will wane

While there may be workarounds for individual UK lawyers who need to retain the ability to represent clients before EU bodies and have legal professional privilege, those workarounds will not compensate for the loss of the United Kingdom’s role as a champion of legal professional privilege within the European Union.

England is widely regarded as the “home” of legal professional privilege, with the roots of testimonial privilege firmly established in English law as early as the 16th century. The United Kingdom’s three law societies have championed legal professional privilege in the European Union through intervention in court cases, advocacy with legislators, and participation in the Council of Bars and Law Societies of Europe (CCBE) activities.

The law societies advocate for a broad right of privilege, and they recognize the importance of privilege rights for corporations and other organizations. While voluntary bars such as ACC and the European Company Lawyers Association (ECLA) take an active role in protecting privilege in the European Union, the law societies have the advantage of being organs of an EU member state. If the United Kingdom leaves the European Union without preserving its status, UK lawyers will no longer have this advantage.

Another important UK privilege point, especially for in-house counsel, is that the United Kingdom is one of the EU jurisdictions where in-house legal communications are privileged before national level courts and authorities. Currently, ACC counts 16 EU and EEA jurisdictions where in-house counsel have some form of legal professional privilege: Belgium, Cyprus, Finland, Germany, Greece, Hungary, Iceland, Ireland, Latvia, the Netherlands, Norway, Malta, Poland, Portugal, Spain, and the United Kingdom. Post-Brexit, a reduction in the number of EU jurisdictions recognizing in-house privilege may make it harder to advocate for recognition of in-house privilege at the EU level.

When the European Court of Justice last considered the issue of in-house counsel privilege, it noted that granting privilege to in-house counsel was not the majority position of EU member states. The United Kingdom’s exit from the European Union is one less member state that can lend its support to the idea of in-house counsel privilege at the EU level.

While there may eventually be a deal that addresses some of the difficulties individual UK lawyers face around practice before the EU courts and legal professional privilege, it seems unlikely that such a deal will provide the United Kingdom with the political power to influence the European Union’s practices around privilege, and that indeed is a loss for those who promote the protection of legal professional privilege around Europe.

About the Author

Mary BlatchMary Blatch is the senior director of advocacy at Association of Corporate Counsel.


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