Procopé & Hornborg Competition blog: Finnish Court upholds broad interpretation of legal professional privilege (LPP) in a cartel case where the documents were re-sent externally
03.09.2019 | By Lotta Uusitalo
Q: What if you disclose outside legal counsel’s advice to someone outside your organization? By distributing such information, do you waive your right to invoke legal professional privilege in a cartel case?
A (under latest Finnish case law): This is open to interpretation.
My advice: Even if the Finnish Supreme Administrative Court granted protection in a particular case, think twice before pressing enter.
What is LPP?
In most jurisdictions legal professional privilege (LPP) protects communications between an outside legal counsel and his or her clients. The privilege is that of the client and not of the outside counsel. The exact scope of LPP or confidentiality of client-attorney communication varies from jurisdiction to jurisdiction, sometimes for example including the advice of in-house lawyers, sometimes not. In its different variants, it is, however, a generally recognized principle and an element of access to justice, rights of defense, right to a fair trial including the right of the accused persons not to incriminate themselves and the rule of law.
An intriguing case concerning rights of defense and LPP has been put to the courts in Finland concerning cartel investigations: the courts decided on certain type of messaging and whether it was protected by LPP in accordance with the previous case law. Also, by disclosing the LPP information to another party, had the cartel company waived its right to invoke the privilege?
FCCA testing the boundaries of LPP – Court rules in favor of defense
In its ruling, rendered on 20 August 2019 in the bus cartel case, the Finnish Supreme Administrative Court evaluated LPP, amongst other things. The Court ruled that it was illegal for the Finnish Competition and Consumer Authority (FCCA) to invoke an e-mail by the cartel company referring to an outside legal counsel’s recommendation. The protection was granted notwithstanding the fact that the cartel company had disclosed the advice and the internal message to another company. Reading the reasoning of the court carefully, it is not as simple as that.
The case itself was about whether the bus companies had acted in consensus with the aim of restricting competition on the market, preventing or impeding access to the market for new scheduled services. The rights of defense were under scrutiny from different angles. A certain question was of a precise message and legal advice: The FCCA’s penalty payment proposal to the Market Court contained a reference to a legal recommendation from a bus company’s law firm and a statement by a company representative referring to it. In its proposal, the FCCA referred to this documentation and the legal advice given by the law firm was related to the subject matter of the infringement in question.
The FCCA argued that the attachment to the proposal was not covered by LPP. The FCCA’s side of the story was that it was the bus company’s internal email correspondence and not correspondence between the company and an outside legal counsel. Referring to case law, the FCCA argued that LPP only covers internal company memos that merely repeat the wording or content of legal advice. Insofar as the message, like the attached email in question, contains company opinions, business assessments and decision-making considerations, this is not communication covered by LPP.
The Supreme Administrative Court stated that under paragraph 3 of article 38 of the Competition Act, an undertaking is not obliged to deliver to the FCCA documents which contain confidential correspondence between an outside legal advisor and the client. Unlike the FCCA and the Market Court, the Supreme Administrative Court held that an email referring to legal advice enjoyed protection of confidentiality for legal advice between the lawyer and the client, and thus the company would not have been obliged to make that email available to the FCCA. In its assessment the Supreme Administrative Court emphasized that it was legal advice obtained to exercise the company’s rights of defense, even when obtained prior to opening of the investigation. Whether or not the company had complied with the advice, was also irrelevant.
But what is the true guidance given by the court if the messages and advice have been distributed externally?
The court pointed out that the wording of the Competition Act concerning LPP is not exact. Also, the national law should comply with the case law of the European Union. The court referred to the cases of Akzo Nobel (C-550/07) and Hilti (T-30/89) and their well-known contents and analyzed that the advice from the outside legal counsel and the internal e-mail referring to it enjoyed protection as LPP documents. The court stated however, the following (unofficial/office translation):
Para 758: “The Supreme Administrative Court holds open to interpretation as to the case law of the [European] Union, what the position should be to the fact that the administrative chief …[of a cartel company] has the following day on 21 December 2010 sent the recommendation given by the law firm and the conclusion made by [an employee of the cartel company] to the department chief… of [another cartel undertaking], e.g., to an outside party vis-à-vis the [cartel company].
Para 759: “In such a case, it is no longer a question of internal distribution of a memorandum, as was the case in the context of legal professional privilege advice in Hilti and Akzo Nobel Chemicals cases. It is open to interpretation if the legal advice so distributed no longer falls within the scope of legal professional privilege or has [the cartel company] waived its legal professional privilege when disclosing such a recommendation to the responsible person at [another cartel undertaking].
Para 760: “The Supreme Administrative Court holds that in the present case concerning penalty payment for a competition infringement, the matter must be evaluated so that where a question is open to interpretation, the rights of defense of the parties to the cartel must be interpreted as broad.”
Para 761: “Evaluating the matter so, the Supreme Administrative Court holds that the …message of 20 December 2010, which has further been sent forward on 21 December 2010 to … with the recommendation by the law firm and the [internal] conclusions, shall be deemed to be protected by legal professional privilege of confidential communication between the client and the attorney”.
The latest Finnish Supreme Administrative Court’s decision does not mean that disclosing the document is irrelevant – the court merely stated that EU law on this matter is unclear. It is worth noting that in cases of external disclosure, the Hilti and Akzo Nobel -rulings protecting the sanctity of LPP information do not necessarily apply.
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