C-155/79

T H E CONSULTATIVE COMMITTEE OF THE BARS AND LAW SOCIETIES OF THE EUROPEAN COMMUNITY, represented by D. A. O. Edward, Q C , of the Scots Bar, and J.-R. Thys, of the Brussels Bar, with an address for service in Luxembourg at the Chambers of T. Biever and L. Schütz, 83 Boulevard Grande-Duchesse Charlotte, interveners, v

COMMISSION OF THE EUROPEAN COMMUNITIES, represented by its Legal Adviser, J. Temple Lang, acting as Agent, with an address for service in Luxembourg at the office of its Legal Adviser, M. Cervino, Jean Monnet Building, Kirchberg, defendant,

JUDGMENT OF 18. 5. 19S2 — CASE 155/79

supported by

T H E FRENCH REPUBLIC, represented by N. Museux, acting as Agent, and A. Carnelutti, acting as Assistant Agent, with an address for service in Luxembourg at the French Embassy, 2 Rue Benholet, intervener,

APPLICATION for:

AM &: S v COMMISSION

JUDGMENT

Facts and Issues

JUDGMENT OF 18. S. 1982 — CASE 155/79

of the Commission to look at any pan of the secrecy of communications passing the documents which the applicant between legal advisers and clients for the regarded as covered by privilege, purpose of obtaining legal advice. The AM & S was prepared to permit part of procedure suggested was, in essence, that the documents to be seen so that the of allowing to be seen certain parts of inspectors might reasonably satisfy the document in question which, themselves that the documents were according to AM & S, would enable its indeed privileged. The solicitors for character to be clearly identified. AM & S offered, moreover, to come to Brussels in order to put their arguments to appropriate departments of the The Commission representatives refused Commission. to accept the proposal made by AM &: S. They stated that they were bound by the decision of 6 July 1979, which they The Commission's inspectors thereupon interpreted as meaning that an inspector stated that they would stop the must have the right, if he chose to investigation as far as it concerned the exercise it, to read the whole of a documents for which privilege was document. claimed but that the Commission reserved all rights relating to those documents. As for the meeting sought by By application of 4 October 1979, which the solicitors for AM & S, they stated was registered at the Registry of the that for various reasons a meeting could Court of Justice on the same date, not be held until after 7 September 1979. AM & S commenced the present action.

Advocate General, the Coun decided to subject of the dispute is one of open the oral procedure without any procedure. That matter is the extent to preparatory inquiry. However, it invited which, if at all, the Commission is the parties and the governments which entitled to look at a document in order had submitted observations "to express to determine whether a claim to privilege their views at the hearing as to the for certain documents passing between existence and scope of the principle of lawyer and client is a valid claim. professional privilege in Community competition law, on which the Consul- tative Committee of the Bars and Law This procedural issue arises in con- Societies, intervening, has given a full nection with the principle that the statement of its views". confidential relationship between lawyer and client is entitled under Community law to protection from disclosure. II — C o n c l u s i o n s of the parties According to AM & S, the afore- AM & S claims that the Court should: mentioned principle is not in dispute in the present case. The parties are at issue, 1. Declare Article 1 (b) of the decision not over the principle, but over the of 6 July 1979 void; procedure to be adopted in order to apply it. 2. Alternatively, declare Article 1 (b) of the decision of 6 July 1979 void in so far as it necessarily requires the In that regard, AM & S submits that disclosure to the Commission's until, on the initiative of the Com- inspector of the whole of each of the mission, the Council of Ministers makes documents for which the applicants a regulation for the verification of claims claim protection on grounds of legal for protection on grounds of legal confidence; privilege it is incumbent on both the 3. In either event, order the Commission party claiming protection and the to pay the costs; Commission to take reasonable steps to agree upon a means of verification 4. Order such other relief as may be without the Commission being entitled to lawful or equitable in all the circum- see the contents of the material for stances. which protection is claimed. In the ultimate event of disagreement between the parties, it is only the Court of Justice The Commission of the European which is in a position to inspect the Communities contends that the Court documents and adjudicate on the should: dispute. 1. Reject the application; 2. Order AM & S to pay the costs. Indeed, if the Commission could inspect those documents and use the knowledge gained thereby, the confidentiality of the documents would be destroyed and the III — Submissions and argu- protection rendered largely valueless. In ments of the parties the Member States where parties to an action have the right to see each other's In its application AM & S stresses at the documents some procedure is provided outset that the matter which is the for the independent verification of claims

to privilege for documents relating to demonstrate that the document is legal advice and assistance. privileged by showing a part of the document to the Commission in order to establish its nature. For exampie, a The procedure suggested by AM & S British undertaking might show the would only very rarely oblige the parties Commission the "backsheet" of the concerned to call upon the Court to "Instructions to Counsel" sent by the adjudicate upon the nature of a solicitor to counsel and the heading to document for which privilege is claimed. the first gage thereof. If that were thought insufficient, the task of verifying the documents could be entrusted to a Moreover, even the Commission's reputable, experienced and wholly position does not rule out the possibility independent lawyer chosen by agreement of the Court having ultimately to rule between the parties. N o doubt other upon the character of a document where possibilities exist, such as a statutory the undertaking concerned refuses on the declaration or affidavit and so forth, if, ground that the document is privileged on the other land, an undertaking were to give a copy of it to the Commission to decline to adduce, in whatever and the Commission seeks by means of a manner may be appropriate, sufficient decision to compel the undertaking to do proof to establish that the document was so. protected, it would have little prospect of successfully contesting a Commssion decision imposing a fine or penalty upon In such a case, however, even if the it. In these circumstances few under- Court were to uphold the claim to takings would risk making unwarranted privilege for the document, the claims to privilege and applications to protection would already have been the Court of Justice for an adjudication rendered nugatory by the fact that the on claims for protection would not occur Commission had in any event gained very frequently. knowledge of the content of the document. On the other hand, were the Court to uphold the Commission's argument, there would be no possibility whatever of What is involved, therefore, is the maintaining the confidentiality even of defining of a verification procedure given documents of which the protected nature that, as AM & S readily accepts, the is wholly indisputable. undertaking in question may not confine itself simply to claiming that a document is privileged but must also provide proof The second submission advanced by of its claim. AM & S is concerned with the principle of proportionality, which has long been recognized in the Community case-law That procedure could be specified by the and which the Commission is said to Community institutions, if necessary by have infringed by demanding the means of a Council regulation. production in their entirety of documents for which protection has been claimed when the public interest involved would At the present time, in the absence of have been fully, satisfactorily and any Community provision dealing with practicably met by other means, without such a procedure, AM & S suggests the inspector having had to be given that the undertaking concerned may access to the contents of the documents.

The Commission submits a defence The lack of any legislation dealing with falling into two parts. the question seems to have caused no real difficulty in practice for many years. However, the subject was debated more frequently after the accession of the In the first pan the Commission three new Member States in 1973. examines the question of the protection of legal confidence in Community law in order to show that, contrary to the argument of AM & S, that principle is On 22 June 1978, in answer to a written nowhere an absolute rule with fixed, question (No 63/78) by Mr Cousté, a clear limits which overrides other legal member of the European Parliament, the principles when they conflict, but one of Commission, after recalling that several legal principles which can be Community legislation did not provide differently regulated and reconciled for any protection for legal papers, according to circumstances. stated that the Commission, wishing to act fairly, follows the rules in the competition law of cenain Member In the second pan the Commission sets States and is willing not to use any such fonh its point of view in regard to the papers as evidence of infringements of manner in which verification of the the competition rules but that, subject to nature of the documents for which review by the Court of Justice, it is for protection has been claimed should be the Commission to determine the nature carried out and raises numerous of such papers. objections, including those of a practical nature, to the procedure suggested by AM & S. On the other hand, it is true that in a paper delivered by Dr Ehlermann, Director-General, and Dr Oldekop, a First part: The question of protection of member of the Legal Service of the legal confidence in Community law Commission, to the conference held in June 1978 in Copenhagen by the Fédération Internationale du Droit Européen (FIDE) the existence of a The Commission's proposal for the first general principle of Community law regulation implementing Articles 85 and ensuring professional privilege within 86 of the EEC Treaty, which was to cenain limits was envisaged. become Regulation No 17. contained no provisions on the subject of privilege or "secret professionnel". Although an amendment to the effect of including a The Commission's decision of 6 July provision protecting legal confidence in 1979 was of course based on the view of the proposal had been approved by the the position under existing Community Parliament, the Council did not accept law set out in the answer to the question that suggestion in the final version of by Mr Cousté. Regulation No 17. It is therefore clear that the Community legislature con- sidered the question whether legislation should provide for protection of legal It is. in fact, extremely difficult to detect confidence and decided that it should a single principle of protection of legal noi. confidentiality which is valid for all the

Member Sutes. Even the repon on this absolute or unqualified rule. The extent matter compiled by Mr D. A. O. Edward to which protection is given, and QC and published by the Consultative whether it is given at all, depends on the Committee of the Bars and Law Societies purpose for which disclosure of the of the European Community points out, document is required. The greater the inter alia, that the protection of advice imponance of that purpose the less the given by a lawyer in the hands of his document is protected. client is only ensured in the common law jurisdictions whereas in the six original Member States protection is only given to documents in the possession of the lawyer and that protection is not absolute in all cases. As for the second argument, it is based on the assumption that most under- takings honestly wish to comply with Community law and that most lawyers honestly help their clients to comply with According to the Commission, there are its provisions. That assumption is no two basic reasons possible for accepting doubt correct in the majority of cases but a doctrine of protection of legal there are certainly exceptions. The confidence in Community law. The first question whether compliance with is based on the view that there is a Community law is more effectively general principle of law governing the obtained by disclosure or by protection right to obtain legal advice which from disclosure cannot be decided by implies, as a consequence, some reference to general principles but protection for the documents relating to according to circumstances. that advice. Tke second is that the interest of the Communities in permitting undertakings to obtain legal advice on their obligations under Community rules must outweigh the interest in being able to use as evidence documents relating to Since that argument presupposes that that advice. abuse is very rare it would, according to the Commission, be greatly strengthened were the Bars and national law societies explicitly to recognize that it is contrary to professional ethics and a matter for disciplinary action for a lawyer to help As to the first argument, even if there is his clients to make arrangements which a general principle of law on the right to are reasonably clearly contran· to the obtain legal advice, the extent of the law which is to be complied with — in legal protection which should be given to this case, Community law. documents relating to legal advice is not at all clear. The Commission, for its pan, considers that that extent cannot be deduced from the principle itself but must be determined by practical considerations in the light of all the Another important factor which must be circumstances. The protection given to taken into account is the extent to which communications between lawyer and lawyers consider that they have a duty to client varies considerably from one ensure that their clients disclose all the Member State to another and there is no documents which they are obliged to

The Commission then observes that even in the United Kingdom it is accepted that the extent of the protection of legal The Commission states first of all that it confidence must depend on circum- agrees with AM & S that the dispute stances. To that effect the Commission concerns entirely a question of procedure cites a passage from the Law Reform and not the question whether any Committee's repon on privilege in civil particular document falls within the proceedings and the judgment of the scope of the protection of legal House of Lords in Waugh v British confidence but that that is entirely Railways Board [1979] 3 WLR 150; 2 without prejudice to the position which it All. ER 1169 from which it appears that may adopt on the substantive question in the principle of protection only overrides any given case. the principle that all relevant evidence should be submitted to a court if the document was written for the dominant purpose of obtaining legal advice. That said, the Commission then sets forth its objections in principle to the argument advanced by AM & S. In the Commission's view, the protection of In its answer to Mr Cousté's question the legal confidence is not an absolute or Commission gave the assurance that it rigid rule with clear limits which would not use as evidence strictly legal overrides other legal considerations, but papers written with a view to seeking or one of several objectives which have to giving opinions on points of law to be be reconciled as far as possible in observed which are in the possession of particular situations. In particular, two the undertaking as well as documents other principles are important, namely, relating to the defence. By so doing the that all relevant evidence should be Commission in practice treats as submitted to the Court and that, if a protected all documents which would be claim is made that some undoubtedly protected under the British and Irish relevant evidence should not be disclosed doctrine of privilege, even where such to the Court, that claim should be documents would not be protected under upheld only if it is clearly proved. the priciple of "secret professionnel" or Observance of both principles may only the corresponding rules observed in the be ensured by the procedure followed by

It is because existing Community However, it is not certain that if an legislation, in contrast to the position in undertaking were quite simply to refuse certain Member States, does not make to produce the document that would be provision for any procedure of sufficient ground for a decision by the independent verification, that the Commission. Assuming that it were, it is Commission has gone so far in giving all none the less the case that the dispute the assurances which it believes can brought before the Court would concern reasonably be required. the stated grounds of the decision and not whether the document was protected. The truth of the statements According to the Commission, no made by the undertaking could onlv be method which does not involve an tested by the Court if the Court were to examination of the documents for which look at the document. However, protection is claimed can be satisfactory. AM & S has not explained how it would AM & S appears, in fact, to accept that be competent for the Court to examine where the attitude of the undertaking is the document itself in the context of one of refusal the documents may be examined by the Court. However, the proceedings concerning the validity of a weakness of the argument of AM & S decision of the Commission. lies precisely in the fact that the Court of Justice is not a court which may decide questions of fact. The Commission submits thai no procedure could be satisfactory in which the issues before the Court would not be It is true that, if an undertaking refused the real issue between the Commission to disclose a document and the and the undertaking, that is to say, Commission adopted a decision ordering whether a document is protected. The disclosure of that document, the under- dispute cannot, however, be pui directiv taking could bring a direct action under before the Court by means of an\ of the Anicie 173 of the Treaty before the remedies available under the Trean as it Court of Justice but the Court could now stands. only decide the issue whether the reasons given for the decision were sufficient and not whether the document was The argument advanced by AM &: S protected. implies that, should the case arise, the Court would act as a court of first instance. But, as AM & S concedes, Not having been able to see the where an undertaking and the document, the Commission would not be Commission cannot agree on whether a

document is protected, the matter may the adoption of a procedure such as that only be brought before the Court under proposed by AM & S would allow Article 173 which makes provisions for a dishonest persons to conceal under a procedure in which the Court is not misleading cover or title documents called upon to decide questions of fact. which in truth are in no way protected Moreover, even if that contradiction by legal privilege. could be resolved, it is none the less the case that the Court would be acting as a court deciding questions of fact, which In general, irrespective of the wav in does not accord with its role as defined which documents may be drawn up, the by the EEC Treaty. Commission considers that simply looking at some superficial parts of a document would not give a true If proof of that statement were needed it impression of its nature and therefore may be found in the Order of the that, put shortly, it would be the under- President of the Court in Case 109/73R taking which would decide whether or National Carbonising Company Limited v not a document is protected. Commission [1975] ECR 1193. That order states that "it would in fact be contrary to the balance between the Several practical reasons lead the institutions which derives from the Commission to reject the procedure Treaty for the judge hearing the suggested by AM & S. proceedings for the adoption of interim measures to substitute himself for the Commission in the exercise of a power The first is that that procedure could which belongs primarily, subject to easily be abused by dishonest under- review by the Court, to the Commission takings. . . . " . In the Commission's opinion the same principle applies to any other pre- liminar.' question, including disclosure of Secondly, if the Commission could only documents. rely on statements made by the under- taking's lawyer, it would be placed in the invidious and indeed impossible position The Commission then turns to the facts of having to decide whether it could of the case in order to illustrate some of trust this lawyer or that lawyer. That the difficulties to which the theory pro- would be so unless and until all the Bars pounded by AM & S would give rise in of the Member States accept that certain practice. conduct directed towards protecting the client's interest at all costs is unpro- fessional and a matter for professional According to the argument of AM & S, discipline. the Commission's inspector should confine himself to reading the title page or cover and the heading of the first Thirdly, if the inspector were to consider page of the document for which (as well he might) that what he had been protection is claimed. However, it must allowed to see was insufficient to be borne in mind that many documents convince him thai the contents oi the have neither covers nor headings and document were protected, the issut.- to be that documents which have them do not brought before the Court would not be necessarily correspond, in all their parts, whether the document was protected to their covers or headings. In addition, but, rather, whether that portion of the

AM & S attempts to counter that Finally, it may be necessary to decide objection, which it has already foreseen, related questions which can be resolved by stating that the Court would not be only if the document can be read as a involved in numerous and trivial cases whole. because "the Commission would in practice almost certainly wish to propose a Council regulation so that a proper Such would be the case where, in order statutory machinery for verification to decide whether a document is would be obtained" but in so saying, protected, it is necessary to check: AM & S admits, in effect, that the procedure which it suggests would indeed be "intolerable" unless it were Whether the person who wrote it or the changed by regulation. person to whom it is addressed is a lawyer qualified to practise ; Finally, in regard to the submission which AM & S bases on the alleged Whether the lawyer was assisting or infringement of the principle of pro- participating in illegal activités, so that portionality, the Commission states that it protection would not apply; claims for its inspector only the right to see the document in so far as necessary for the purpose of verifying that the Whether he was acting as lawyer or in claim to privilege is justified. It may some other capacity; often be the case that the inspector will consider that it is not necessary to look at the whole document. Whether the document had been written exclusively, primarily or only partly for the purposes of legal advice or litigation. The principle of proportionality requires that the means used must not go beyond what is necessary to achieve the objective Therefore the Court, even if it was in a sought. It cannot, on the other hand, be position to look at the document in a justification for making verification question under the procedure suggested ineffective or impossible, nor can it be by AM & S, would also be compelled in used as a guise for permitting the under- some cases to act as a tribunal of first taking itself to decide whether a instance to decide related questions of document is protected. fact which could only be resolved by the production of evidence and the hearing of witnesses. In its reply, AM & S observes that, despite some equivocation, the Com- mission appears to accept the existence The Commission considers that it is of a principle of Community law worth stressing all these aspects because, concerning legal confidence. In these in practice, the Court will be called upon circumstances the protection of legal io adjudicate on everv document for confidence constitutes a substantive rule

AM & S is also of the view that the It is common ground between the parties Commission has not considered the that the Commission will not use practical implications of the assurance protected documents as evidence. which it has offered, late in the day, in an effort to deal with one of the defects in its position. Thus the only question which falls for decision in this case concerns the appro- priate procedure for verification of It could be, for example, that after claims for protection and on that issue having looked at a document the the difference between the parties is Commission's inspector may decide that narrow, but crucial. that document is not protected. In those circumstances, even if it considered the document to be covered by legal In regard to the procedure proposed by privilege, the undertaking cannot prevent the Commission, AM & S considers that the Commission from using it as it sees that procedure still does not ensure fit. protection of legal confidence, even though the Commission has stated in its defence that its inspectors will be instructed not to use the knowledge Further, if the protection of legal gained from protected documents. confidence is to be safeguarded by rules of law, those rules must ensure, not only that the law is upheld, but that the law is First, such an assurance by a body which seen to be upheld. That is not so if the combines the investigating, prosecuting documents which an undertaking claims are protected must be inspected by the and adjudicating roles is no substitute for Commission, that is to say, by the very objective rules of law for the protection party against whom the protection is of legal rights. claimed.

Unquestionably, in the present state of decision ordering it to produce the Community law, the procedure documents. It could merely challenge suggested by AM & S is an improvised the Commission's final decision in procedure, but that arises quite simply application of Article 85 or Article 86 of from the omission to date by the the EEC Treaty by claiming that that Commission to exercise its power of decision is based on a wrongful use of initiative and to propose a regulation protected documents. providing, in a manner that conforms to the law of the Community, for a procedure for use in these cases. On the other hand, the Commission's standpoint has the disadvantage of not giving an undertaking any effective As for the objections raised by the means of redress if the inspector wrongly Commission in regard to the procedure decides that a document is not protected. put forward by AM & S, those objections are unreal and unfounded.

AM & S v COMMISSION

Such a solution would at the same time avoid serious difficulties that would arise for national authorities. Under Article 14 of Regulation No 17, the competent In regard to the assertion that for many authority of the Member State in whose years the absence of Community territory an investigation is being made legislation on the protection of legal may, and sometimes must, assist the confidence seems to have caused no real officials of the Commission in carrying difficulty in practice, AM & S points out out their duties. In the United Kingdom, that the Commission did not take any however, it would be wholly contrar)' to decisions imposing fines until 1969 and fundamental principles of national law if that the gradual realization by under- the competent authorities were required takings of the problem of legal

JUDGMENT OF 18. 5. 1982 — CASE 155/79

The references in the Edward Report to diversity of substantive rules of national law in the field of legal confidence result (3) there would be no safeguards for in part from the fact that that report, as undertakings if an inspector im- the CCBE now recognizes, does not take properly used information obtained full account of the methods of interpret- through looking at a document in ation and application of legal texts in the order to decide whether it is original six Member States. On a matter privileged or if he wrongly decided of detail, AM & S states that it is not that a document is not protected, correct that the concept of "secret professionnel" in national law can never protect advice or information communi- cated by a lawyer to his client and it cites (4) the procedure advocated bv the in this regard several decisions given by Commission is not such as to give national courts. the public the impression that legal

AM & S v COMMISSION

In fact, under the system operated by the Commission, an official never performs Finally, the fact that the inspector who in turn the functions of inspector and sees a document is not the person who rapporteur in the same case. Con- subsequently decides whether there is sequently, an inspector never has the sufficient evidence that the undertaking opportunity of using knowledge acquired has infringed the Treaty not only ensures through looking at a protected that the principle that legal confidence document. If he were to attempt to use it should be protected is in fact observed as a basis for a statement in his report on but makes clear even to the public at the evidence he had collected, he could large that there is no possible oppor- not, of course, indicate that his knowl- tunity for abuse. edge was obtained from a protected document. And the rapporteur would therefore be obliged to reject the statement as being unsupported. If, on the other hand, he used it to guide him Having thus answered the criticisms to other, unprotected, evidence two made by AM & S, the Commission, in its possibilities would arise, namely, that turn, criticizes the procedure proposed those documents are within the scope of by AM & S.

JUDGMENT OF 18. 5. I9S2 — CASE 155/79

According to the Commission, every· unprotected, without the Commission procedure for verification of claims to ever being in a position to know the protection must meet rwo requirements: facts. Everything would then be reduced to a device for raising the issue before an appeal tribunal. But Community law- (1) it must ensure that documents which should not depend on such procedural are protected are not improperly contrivances. used as evidence;

Yet another serious objection is that, if In that regard, the Commission asks how the procedure contended for by AM & S it would be able to find reasons for a had to be operated, the Commission decision disagreeing with the finding of would have to negotiate an agreement the third party when AM Se S has not with every enterprise making a claim that suggested that the third party should give any document in its possession was reasons for his conclusion and still less protected and with whoever was chosen that he should include in such reasons to act as the independent third party. It the evidence and the arguments stands to reason that those negotiations favourable to the Commission. would be time-consuming for the Commission and greatly hinder it in its work. Finally, AM & S states that the Court of Justice may look at the document and that in that event the Court is not acting The fundamental flaw in the proposal of as a court of first instance. The AM & S is that it would make it Commission Knows of no procedure necessary in certain circumstances for the provided for in the Treaty in the context Commission to adopt a decision of which the Court has such jurisdiction. declaring the document to be Moreover, even if the Court could look

AM 8c S v COMMISSION

at the document, it would necessarily be fication has been effected and with the the first court or judicial body to view to making that verification itself or examine the principal evidence allowing allow the party resisting disclosure to the question whether or not the determine the validity of its own claim document is protected to be decided. without any possibility of independent But, according to well-settled case-law review. of the Court, it is the Commission and not the Court which must be the tribunal of first instance in all competition From that it follows that, provided questions. Community legislation permits, the veri- fication procedures should:

Intervening in support of AM & S, the United Kingdom states that it is not correct in principle, and that the relevant The United Kingdom considers that the Community rules do not require, that relevant Community legislation permits verification of the soundness of a claim such procedures. to legal privilege should be carried out using procedures which either allow the party seeking disclosure of a document Since the present case is concerned solely to see thai document before the veri- with a question of procedure, it is not lUDGMENT OF 18. 5. 1982 — CASE 155/79

AM & S v COMMISSION

Community. That procedure would also The legal privilege claimed by AM & S, make applications to the Court less whilst being comparable in certain frequent. respects with certain doctrines of Member States other than the United Kingdom, is not, however, a principle "common to the laws of all the Member Finally, it should be remembered that the States". powers conferred on the Commission by Regulation No 17 are limited to that which is "necessary" for the attainment of the results provided for and the fact It follows that the Commission's that a document or information has some inspectors must be in a position to significance for the purposes of an exercise fully and in normal course the inquiry does not inevitably involve an powers which they possess under Article obligation to make disclosure. In cases 14 of Regulation No 17, which auth- such as the present, a principle of very orizes them, inter alia, to "examine the great importance, that of legal books and other business records". confidence, lies on the other side of the However, nothing allows acceptance of scales. In these circumstances, in the view of AM Se S to the effect that establishing whether communication is documents of a legal nature drawn up truly necessary, regard must be had to "for the purpose of . . . obtaining or the principles of proportionality or the giving legal advice" do not constitute balancing of conflicting principles. business records within the meaning of the aforementioned Article 14.

It would also be possible, in so far as there is no sufficient corpus of It is to be noted, moreover, that this case Community legislation in this field, to does not raise the question of protection apply, in regard to the Commission, from disclosure of documents in the national laws on the protection of legal possession of a lawyer or of communi- confidence in so far as those laws may be cations between lawyers, but only of pleaded against national authorities. documents in the possession of the undertaking.

depending upon whether the law of the disclose all business records provided for Member State where they are established by Article 14 of Regulation No 17; the does or does not confer (or confers need for an agreement between the subject to stricter limits) protection for panies on the procedure to be followed certain documents. In fact, the laws in verifying the nature of the documents applying in the various Member States to and the opportunity for the undertaking documents passing between an adviser to judge at first instance whether or not and his client are very different. T o be a document is of "privileged nature") persuaded of this, it is sufficient to note but also because it would alter the the difference which exists between the institutional balance of the Treaty. concept of the "secret professionnel", common to the laws of the six original Member States, and that of "legal pro- fessional privilege" as that has been laid down by decisions of the British courts. Under the scheme proposed by AM & S, the Court of Justice would be vested with jurisdiction to rule whether a document sought by the Commission ought, or ought not, to be "protected". Even though a certain amount of Under the scheme established by Regu- protection is to be found in the laws of lation No 17 for competition matters, all the Member States, it varies so much however, it is for the Commission to in its content that it is difficult to elevate investigate matters connected with the that protection into a "principle common question whether free competition has to the laws of the Member States" and been infringed and it is difficult to even more questionable to turn it into a maintain that that power of investigation rule of law capable of altering the does not include that of examining meaning of Community texts, which documents in their entirety and of long-standing practice of the Com- deciding whether the claiming of some mission has observed. protection or other is, or is not, well- founded. The only power which the Court has in this field is that of reviewing the legality of Commission decisions where an application within the meaning of Article 173 of the Treaty is In the context of the EEC Treaty, the brought. role of the Commission is that of seeing that competition in the common market is not distorted. The Community has therefore an interest in seeing the Commission exercise its powers of investigation in accordance with the Showing itself conscious of the fact that applicable system of Community rules. in several Member States legal rules That interest is not protected under the protect the confidentiality of information system proposed by AM & S, which may passing between an adviser and his client, be shown to be contrary to the Treaty the Commission has acted within the not only because it creates a new framework of the powers conferred on it procedure based on rules of law which by Regulation No 17. But it would be do not exist at the present time in contrary to that regulation to infer from Community law (the opportunity of it that the Commission may not have claiming an exception to the duty to access to the whole contents of a

In that regard, the CCBE contends that Intervening in support of AM & S, the there is a doctrine or principle of legal Consultative Committee of the Bars and privilege in Community law. It can Law Societies of the European Community hardly be denied that, in the form of (hereinafter referred to as "the CCBE") protection against the disclosure of observes that, as both parties accept, the confidential communications between question raised in this case is concerned lawyer and client, the principle of legal only with procedure and consists in privilege forms part of the law of ever)' ascertaining the appropriate method for Member State. verifying whether a document may be protected by legal privilege. The argument of the Commission and the French Republic that there is no However, the conclusions reached by the doctrine or principle common to all the parties are different because AM & S and Member Sutes because the method and the Commission are not at one on the scope of protection can be shown to be definition of the principle of substantive different cannot be accepted. If the law in the context of which the question argument were correct, it would be is raised. necessary to deny the existence of common principles in the field of human rights as well. According to AM & S, Community law has in fact a principle of legal privilege In truth, the mere existence of pro- which affords a right to protection for cedural differences, or even of confidential documents. The Com- differences as to the limits of application, mission's position, on the other hand, is does not by itself prove that there is no less clear-cut. Some of its statements principle common to all the Member appear to concede the existence of a States. principle recognizing a right which affords protection against the disclosure of documents concerning legal advice; The argument of distortion put forward others appear to deny the existence of a by the French Republic is not valid single, generally accepted, clear principle either. If it is assumed that there is a of protection. The argument which the principle of legal privilege in the law of Commission advances in order to some Member States but not in that of demonstrate the merit of its own others, its acceptance as a principle of procedure appears, moreover, to Community law leads to the result that ii

or alternatively, Since the aim of Community law is to find the best solution having regard to national laws, it is necessary to examine that, in so far as it cannot be affirmed the spirit, orientation and general that such a right exists independently, a tendency of the national laws on legal doctrine or principle of legal privilege privilege. protecting the confidential character of communications between lawyer and client is a necessary corollary of The CCBE submits that on this matter fundamental, constitutional or human there can be no doubt. As appears from rights which are expressly recognized the Edward Report, not only do all and protected; and that as such, a Member States afford some protection to doctrine or principle of legal privilege confidential relations between lawyer should be recognized and applied as part and client, but there is a remarkable of Community law; consistency in the explanations of the ratio legis and a clearly discernible tendency to extend rather than to reduce and that, in either case, the law affords the scope of that protection. Finally, a protection, as of right, against disclosure study of comparative law shows that the of confidential communications between protection of legal confidence is a lawyer and client. characteristic feature of democratic systems and that, on the other hand, it has little place in the law of absolutist or totalitarian States. If those submissions are correct, it is irrelevant that Regulation No 17 makes no reference to the protection of legal privilege. As part of "the law", the right To a marked and increasing extent, legal to such protection must be assumed to privilege is seen as a practical guarantee form part of the legal context in which of fundamental, constitutional or human that regulation was adopted. rights. This conclusion has been reached both by legal writers and decisions of the courts, in particular the decisions of the European Court of Human Rights. If there is no principle of legal privilege in Community law, a lawyer could be required to give evidence or to disclose documents in direct violation of his The CCBE therefore submits: obligations under national law.

Thirdly, bearing in mind that the Commission and its inspectors have a In regard to the question at issue, the positive duty of investigation, the CCBE considers that it is not a matter of procedure adopted should not be such as whether the theory of AM & S is correct to create for them another duty (verifi- but whether the theory of the cation of privilege) which is potentially Commission is correct. in conflict with that duty.

Fourthly, in so far as the Commission In that regard, the CCBE adopts the has an interest in disclosure of the practical and legal objections formulated documents in question, the maxim nemo by AM & S. The CCBE considers in debet iudex esse in causa propria applies. particular the position which would arise if a Commission inspector wrongly decided that a document is not The foregoing considerations apply with protected. In that event, the document all the greater force if legal privilege is would have been put on the considered as enhancing fundamental, Commission's file. That fact that, in that constitutional or human rights since the way, the document may be read by general interest in the right which the anyone having access to the file amounts procedural safeguard is designed to in itself to a breach of legal confidence. protect is greater than any public or private interest in the result of the particular case.

Moreover, however, the Commission's theory may be found wanting if tested bv It is characteristic of procedural safe- criteria of principle. guards for such rights that the

JUDGMENT OF 18. 5. 1982 — CASE 155/79

Subject always to its sund on the issue of principle, the CCBE has the following In so far as it is appropriate for the observations on the practicability of CCBE to propose a procedure, it procedures alternative to that of the suggests first a procedure involving an Commission. examination carried out by an "expert", who could confine himself to describing the documents or, on the other hand, could give an opinion as to whether the A distinction must be drawn between a documents were entitled to protection or requirement to produce documents and a not. requirement to disclose their contents. Taking as an example the practice adopted by the Scottish courts, it is If an "expertise" were not possible in the possible to produce documents in a framework of the Community rules in sealed envelope which may be opened force at the present time, a dispute about only by the person called upon to decide documents could always be settled by the whether the documents are confidential. parties agreeing to arbitration on the same basis as suggested above.

The CCBE states that it is ready to 3. On 4 February 1981 the Court made discuss with the Commission the an order as follows: methods and criteria of selection of a panel of independent "experts/arbitres", and the rules and criteria to be followed "1. The oral procedure in Case 155/79 by them. shall be re-opened; the parties shall be notified of the date of the If a regulation is necessary, the CCBE hearing. believes that it should be limited to matters of procedure and should not 2. The applicant shall send to the attempt to define the doctrine of legal Court, within three weeks after privilege, its scope or its limits. notification of this order and under confidential seal, the documents In Appendix IV to its observations, the referred to in Article 1 (b) of the CCBE, after pointing out that the issues contested decision and listed in the raised by the Commission in regard to appendix to AM & S Europe rules of professional conduct for lawyers Limited's letter of 26 March 1979 to are irrelevant to this case, sets forth the the Commission. reasons for which it is not prepared to take the steps in regard to the definition of rules of professional conduct which 3. The Court shall, before the date of the Commission desiderates. the hearing, draw up a report on those documents in the form which it considers appropriate so as not to prejudice its final decision; this IV — Oral p r o c e d u r e repon shall be notified to the parties.

main parties and to the interveners with to fact and to law which they had a covering letter dated 17 July 1981. The advanced during the first sitting. letter notified the main parties and the interveners that the hearing was to be held on 27 October 1981. They were 6. In a letter dated 21 August 1981 invited to state orally at that hearing W. H. Godwin, Principal Assistant their views on the legislation, academic Treasury Solicitor, acting as Agent for opinion and case-law in the various the United Kingdom Government, Member States relating to the existence intervening, requested clarification from and extent of the protection granted — the Court of the words "lawyer" in investigative proceedings instituted by (avocat) and "legal adviser" (juriste) public authorities for the purpose of used in the letter of 17 July 1981 and detecting offences of an economic asked whether the word "parties" in the nature, especially in the field of last paragraph of the letter included the competiton — to correspondence passing interveners. He requested also a copy of between : the letter in French.

AM & S v COMMISSION

8. The Agents for the Government of 9. AM & S Europe Limited, the the French Republic, N. Museux and Commission of the European Com- A. Carnelutti, asked the Court for munities, the United Kingdom, the permission to lodge a written French Republic and the Consultative memorandum in reply to the questions Committee of the Bars and Law Societies put in the letter of 17 July 1981 in of the European Community presented preparation for the hearing on 17 oral argument at the sitting on 27 October 1981; the Court informed them October 1981. by letter dated 9 October 1981 that it was open to them to send the document to all the parties to the case and to ask their agreement to its being lodged at the hearing, and that if there was no The Advocate General delivered his objection from the parties the document opinion at the sitting on 26 January would be accepted by the Court. 1982.

Decision

1 By application lodged at the Court Registry on 4 October 1979 Australian Mining & Smelting Europe Limited (hereinafter referred to as "AM & S Europe"), which is based in the United Kingdom, instituted proceedings pursuant to the second paragraph of Article 173 of the EEC Treaty to have Article 1 (b) of an individual decision notified to it, namelv Commission Decision N o 79/760/EEC of 6 July 1979 (OJ L 199, p. 31),'declared void. That provision required the applicant to produce for examination by officers of the Commission charged with carrying out an investigation all the documents for which legal privilege was claimed, as listed in the appendix to AM & S Europe's letter of 26 March 1979 to the Commission.

4 In that respect the applicant accepts that initially the undertaking claiming protection must provide the Commission with sufficient material en which to base an assessment: for example, the undertaking may provide a description of the documents and show the Commission's inspectors "parts of the documents", without disclosing the contents for which protection is claimed, in order to satisfy the Commission that the documents are in fact protected. Should the Commission remain unsatisfied as to the confidential nature of the documents in question the undertaking would be obliged to permit "inspection by an independent third party who will verify the description of the contents of the documents".

5 The contested decision, based on the principle that it is for the Commission to determine whether a given document should be used or not, requires AM & S Europe to allow the Commission's authorized inspectors to examine the documents in question in their entirety. Claiming that those documents satisfy the conditions for legal protection as described above, the applicant has requested the Court to declare Article 1 (b) of the above-mentioned decision void, or, alternatively, to declare it void in so far as it requires the disclosure to the Commission's inspector of the whole of each of the

AM íc S v COMMISSION

documents for which the applicant claims protection on the grounds of legal confidence.

6 The United Kingdom, intervening, essentially supports the argument put forward by the applicant, and maintains that the principle of legal protection of written communications between lawyer and client is recognized as such in the various countries of the Community, even though there is no single, harmonized concept the boundaries of which do not vary. It accepts that the concept may be the subject of differing approaches in the various Member States.

F The view taken by the Consultative Committee of the Bars and Law Societies of the European Community (hereinafter referred to as "the Consultative Committee"), which has also intervened in support of the applicant's conclusions, is that a right of confidential communication between lawyer and client (in both directions) is recognized as a fundamental, constitutional or human right, accessory or complementary to other such rights which are expressly recognized, and that as such that right should be recognized and applied as pan of Community law. After pointing out that the concept is not a static one, but is continually evolving, the Consultative Committee concludes that if the undertaking and the Commission cannot agree as to whether a document is of a confidential nature or not, the most appropriate procedure would be ic have recourse to an expert's report, or to arbitration. Assuming, moreover, that the Court is the sole tribunal with jurisdiction to settle such, a dispute it ought in that case to be necessary for it only to determine whether or not the contested documents are of a confidential nature on the basis of an expert's repon obtained pursuant to an order under Anicie 49 of the Rules of Procedure.

JUDGMENT OF 18. 5. 1982 — CASE 155/79

9 To all those arguments the Commission replies that even if there exists in Community law a general principle protecting confidential communications between lawyer and client, the extent of such protection is not to be defined in general and abstract terms, but must be established in the light of the special features of the relevant Community rules, having regard to their wording and structure, and to the needs which they are designed to serve.

AM S S Ï COMMISSION

i3 It is apparent from the application, as well as from the legal basis of the contested decision, that the dispute in this case is essentially concerned with the interpretation of Article 14 of Regulation N o 17 of the Council of 6 February 1962 for the purpose of determining what limits, if any, are imposed upon the Commission's exercise of its powers of investigation under that provision by virtue of the protection afforded by the law to the confidentiality of written communications between lawyer and client.

M Once the existence of such protection under Community law has been confirmed, and the conditions governing its application have been defined, it must be determined which of the documents referred to in Article 1 (b) of the contested decision may possibly be considered as confidential and therefore beyond the Commission's powers of investigation. Since some of those documents have in the meantime been produced to the Commission by the applicant of its own volition, the documents to be considered now are those which were lodged in a sealed envelope at the Court Registry on 9 March 1981, pursuant to the Court's order of 4 February 1981 re-opening the oral procedure in this case.

(a) T h e i n t e r p r e t a t i o n of A r t i c l e 14 of R e g u l a t i o n N o 17

is The purpose of Regulation No 17 of the Council which was adopted pursuant to the first subparagraph of Article 87 (1) of the Treaty, is, according to paragraph (2) (a) and (b) of that article, "to ensure compliance with the prohibitions laid down in Anicie 85 (1) and in Article 86" of the Treaty and "to lay down detailed rules for the application of Anicie 85 (3)". The regulation is thus intended to ensure that the aim stated in Anicie 3 (f) of the Treaty is achieved. T o that end it confers on the Commission wide powers of investigation and of obtaining information by providing in the eighth recital in its preamble that the Commission must be empowered, throughout the Common Market, to require such information to be supplied and to undenake such investigations "as are necessary" to bring to light infringements of Anieles 85 and 86 of the Treaty.

i9 As far as the protection of written communications between lawyer and client is concerned, it is apparent from the legal systems of the Member States that, although the principle of such protection is generally recognized, its scope and the criteria for applying it vary, as has, indeed, been conceded both by the applicant and by the parties who have intervened in support of its conclusions.

2: Whilst in some of the Member States the protection against disclosure afforded to written communications between lawyer and client is based prin- cipally on a recognition of the very nature of the legal profession, inasmuch

AM í£ S v COMMISSION

as it contributes towards the maintenance of the rule of law, in other Member States the same protection is justified by the more specific requirement (which, moreover, is also recognized in the first-mentioned States) that the rights of the defence must be respected.

2i Apart from these differences, however, there are to be found in the national laws of the Member States common criteria inasmuch as those laws protect, in similar circumstances, the confidentiality of written communications between lawyer and client provided that, on the one hand, such communi- cations are made for the purposes and in the interests of the client's rights of defence and, on the other hand, they emanate from independent lawyers, that is to say, lawyers who are not bound to the client by a relationship of employment.

22 Viewed in that context Regulation N o 17 must be interpreted as protecting, in its turn, the confidentiality of written communications between lawyer and client subject to those two conditions, and thus incorporating such elements of that protection as are common to the laws of the Member States.

25 Having regard to the principles of the Treaty concerning freedom of establishment and the freedom to provide services the protection thus afforded by Community law, in particular in the context of Regulation No 17, to written communications between lawyer and client must apply without distinction to any lawyer entitled tc practise his profession in one of the Member States, regardless of the Member State in which the client lives.

26 Such protection may not be extended beyond those limits, which are determined by the scope of the common rules on the exercise of the legal profession as laid down in Council Directive 77/249/EEC of 22 March 1977 (OJ L 78, p. 17), which is based in its turn on the mutual recognition by all the Member States of the national legal concepts of each of them on this subject.

27 In view of all these factors it must therefore be concluded that although Regulation N o 17, and in panicular Article 14 thereof, interpreted in the light of its wording, structure and aims, and having regard to the laws of the Member States, empowers the Commission to require, in the course of an investigation within the meaning of that aniele, production of the business documents the disclosure of which it considers necessary, including written communications between lawyer and client, for proceedings in respect of anv infringements of Anieles 85 and 86 of the Treaty, that power is, however, subject to a restriction imposed by the need to protect confidentiality, on the conditions defined above, and provided that the communications in question are exchanged between an independent lawyer, that is to say one who is not bound to his client by a relationship of employment, and his client.

.M In that case it is for the Commission to order, pursuant to Article 14 (3) of Regulation No 17, production of the communications in question and, if necessary, to impose on the undertaking fines or periodic penalty payments under that regulation as a penalty for the undertaking's refusal either to supply such additional evidence as the Commission considers necessary or to produce the communications in question whose confidentiality, in the Commission's view, is not protected in law.

JUDGMENT OF 18. 5. 1982 — CASE 155/79

32 The fact that by virtue of Anicie 185 of the EEC Treaty any action brought by the undertaking concerned against such decisions does not have sus- pensory effect provides an answer to the Commission's concern as to the effect of the time taken by the procedure before the Court on the efficacy of the supervision which the Commission is called upon to exercise in regard to compliance with the Treaty rules on competition, whilst on the other hand the interests of the undertaking concerned are safeguarded by the possibility which exists under Articles 185 and 186 of the Treaty, as well as under Article 83 of the Rules of Procedure of the Court, of obtaining an order suspending the application of the decision which has been taken, or any other interim measure.

(d) T h e c o n f i d e n t i a l n a t u r e of t h e d o c u m e n t s at issue

33 It is apparent from the documents which the applicant lodged at the Court on 9 March 1981 that almost all the communications which they include were made or are connected with legal opinions which were given towards the end of 1972 and during the first half of 1973.

Costs

38 Under Anicie 69 (2) of the Rules of Procedure the unsuccessful party is to be ordered to pay the costs. Under Article 69 (3) the Court may order that the parties bear their own costs in whole or in pan where each party succeeds on some and fails on other heads or where the circumstances are exceptional.

39 Since the parties to the action and the interveners have failed on some heads they must bear their own costs.

On those grounds,

THE COURT

hereby:

P. Heim J. Menens de Wilmars Registrar President

ORDER OF THE COURT 4 FEBRUARY 1981

AM & S Europe Limited v Commission of the European Communities

Case 155/79

Incase 155/79

AM & S EUROPE LIMITED