dramatic and invasive investigatory power and judicial authority.

26 Article 14(a) of

Regulation 17/62 epitomizes this investigatory power; it practically permits “spontaneous

on-site investigations without the warrant of judicial authority.”27 Answers to concerns of

in-house counsels that their work may be compromised by this sweeping authority were

found in the ruling on the scope of the attorney-client privilege for companies in the EU by

the European Court of Justice (ECJ) in the 1982 case of AM&S Europe Ltd. v.

Commission.28 For the attorney-client privilege to be protected, corporate

communications must be conducted for the purposes of a client’s right of defense; in

other words, the protection is granted practically after the Regulation 17 investigation has

begun.29 In this case, the Court focused on the structural impossibility of an in-house

counsel to be independent.30

The ECJ in AM&S and the European Court of First Instance in Akzo Nobel31 both

viewed that an in-house counsel is not capable of giving independent advice due to

his employment by the company and that the professional privilege is not extended to in-

house

26
See Nash, 43 St. Mary's L.J. at 469; Commission Regulation 17/62, art. 14(1), 1962 O.J. (13) 204
(EC), available at 1962 EUR-Lex CELEX LEXIS 31962R0017.
27
Nash, 43 St. Mary's L.J. at 469; Commission Regulation 17/62, art. 14(1), 1962 O.J. (13) 204 (EC).
28
See Nash, 43 St. Mary's L.J. at 470.
29
Id. at 471; AM&S, 1982 E.C.R. at 1611.
30
Nash, 43 St. Mary's L.J. at 472.

31
Case C-550/07, Akzo Nobel Chems. Ltd. v. European Comm'n, 2010 E.C.R. 00000, EUR-Lex
CELEX 62007CJ055 (Sept. 14, 2010) [hereinafter Akzo Nobel II].

8
attorneys.32 Contrary to some U.S. courts which look to the content and practical nature of

advice offered by a counsel, what determined the independence of a lawyer in both

aforementioned cases in Europe was “the existence of a particular relationship itself

– corporate employment or private law practice” rather than “[the] relationship’s

factual

underpinnings[.]”33 In another case, when the in-house documents implicated an intentional

violation of EC antitrust statutes, the European Community Commission did not

provide protection for the attorney-client privilege between the in-house counsel of the

American company John Deere and its company managers.34 Yet, even within Europe,

countries have varied positions regarding the attorney-client privilege. For example, in-

house counsels in the United Kingdom or Germany may deserve some limited attorney-

client privilege under certain qualifications; those in France, however, are not even

qualified for protection as they

are neither members of the bar nor “avocats.”35

Problems when an international dispute arises

32 Anello, 27 Penn St. Int'l L. Rev. at 304.

33 John Gergacz, In-House Counsel and Corporate Client Communications: Can Eu Law Afterakzo
Nobel and U.S. Law After Gucci Be Harmonized? Critiques and A Proposal, 45 Int'l Law. 817, 825
(2011); Akzo Nobel II, supra note 31, at PP 47-49.
34
Pratt, 20 Nw. J. Int'l L. & Bus. at 170-71.
35
Anello, 27 Penn St. Int'l L. Rev. at 304; Lisa J. Savitt & Felicia Leborgne Nowels, Attorney-Client
Privilege for In-House Counsel is Not Absolute in Foreign Jurisdictions, The Metropolitan Corp.
Couns., Oct. 2007, at 18; Louise L. Hill, Disparate Positions on Confidentiality and Privilege Across
National Boundaries Create Danger and Uncertainty for In-House Counsel and Their Clients, in BNA
Corporate Practice Series: Legal Ethics for In-House Corporate Counsel 2 (2008).

9
 The gaps among laws of different countries have caused problems in international

disputes regarding, for example, the applicability of analysis or ways of interpreting the same

subject. Specifically, in resolving the issue of what law to apply to the attorney-client

privilege, the United States federal courts have employed “touching base” analysis.36 The

“touching base” analysis looks to the relevancy of communications to the U.S. – whether

U.S. attorneys, clients, and proceedings are involved.37 Even when the communications did

not “touch base” with the United States, the court in Astra Aktiebolag v. Andrx

Pharmaceuticals, Inc. applied its own privilege law because applying foreign privilege law

(in this case, Korean law) would defy both American privilege law and Korean disclosure

law.38

While foreign attorneys are not automatically excluded from the privilege by U.S.

courts, U.S. attorneys sometimes do not receive the same treatment from the foreign

courts.39 Some courts in the U.S. recognized the attorney-client privilege for foreign

attorneys, but such has not been the case outside the U.S, including many European

countries as addressed above. Aside from the issue of unfairness, such disparity may be

exploited in ways to disclose

36
Anello, 27 Penn St. Int'l L. Rev. at 310; Astra Aktiebolag v. Andrx Pharmaceuticals, Inc., 208 F.R.D.
92, 108 (S.D.N.Y. 2002).
37
Anello, 27 Penn St. Int'l L. Rev. at 310; Golden Trade, S.r.L. v. Lee Apparel Co., 143 F.R.D. 514, 520
(S.D.N.Y. 1992).
38
Anello, 27 Penn St. Int'l L. Rev. at 311-12; Hill, supra note 30, at 2-3; Astra, 208 F.R.D. at 102.
39
Anello, 27 Penn St. Int'l L. Rev. at 313; Maurits Dolmans, Attorney-Client Privilege for In-House
Counsel: A European Proposal, 4 Colum. J. Eur. L. 125, 129 (1998).

10
information or communications that would be privileged in the U.S.40 To address issues

and problems of discrepancy in granting the attorney-client privilege among

different

jurisdictions, as discussed below, scholars have proposed different approaches.

Suggestions from academia & their limitations

Suggestions

Some suggest taking preventive measures to comply with current laws. First,

increasing reliance on connections to the United States can raise the likelihood of U.S.

courts’ taking the case and recognizing the attorney-client privilege of in-house counsels.

Another method is to define the nature of the attorney-client relationship and its

governing law in retainer letters or other documents. 41 A company may also try to

structure the legal

department in a way that would corroborate the “independence” of in-house counsels. Such

can be done by in-house counsels serving as liaisons between their company and

outside counsels and increasing consultation with outside counsels.42

Or, a more assuring precaution can be taken by “formulat[ing] agreements with the

investigating agency so that the documents may be returned to the corporation without the

privilege being deemed waived in the United States[, England, Hong Kong,43 or any other

40
See Anello, 27 Penn St. Int'l L. Rev. at 313.
41
Id. at 313-314.
42
See Nash, 43 St. Mary's L.J. at 486-87.
43
England and Hong Kong have “a more favorable privilege climate.” Pratt, 20 Nw. J. Int'l L. & Bus. at

11
countries that would afford the attorney-client privilege for the case at hand]” or by

“seek[ing] protective orders in the United States [or the country at issue] to ensure the

return of the

documents seized by a governmental entity like the European Commission [or any other

entities that have conflicting laws on the privilege issue] and retaining grounds for asserting

the privilege.”44

Another precaution that can be taken through contracts would be selecting a

favorable choice of law and forum contract provisions. This would be especially important

if a company wishes to bring its case to U.S. courts because courts in the U.S. have been

respectful of the forum selection clause. Per Bremen v. Zapata, forum selection clauses

should be treated as valid unless there is a showing that it would be unreasonable or unjust

or that the clause was invalid for fraud or overreaching. 45 Therefore, in-house counsels,

when formulating a forum selection or choice of law clause, should be careful in selecting

the “right” or pro-corporate forum to better protect internal legal communications.

Others choose to avoid the risk of not affording attorney-client privilege as a whole,

such as by communicating orally.46 Courts’ seemingly less reliance on oral testimony in

176; Aubrey Roberts, Colloquium on Attorney-Client Privilege in International Practice, Legal

Professional Privilege in the United Kingdom, 7-SPG Int'l L. Practicum 15 (Spring, 1994); see
Martindale-Hubbell, People's Republic of China Law Digest (Reed Elsevier Inc. 1998).
44
Nash, 43 St. Mary's L.J. at 492; Cf. Lisa C. Wood & Ara B. Gershengorn, Rule 502: Does It Deliver
on Its Promise?, 24 Antitrust 84, 85, 87 (2010).
45
M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 2, 92 S. Ct. 1907, 1909, 32 L. Ed. 2d 513 (1972).
46
Pratt, 20 Nw. J. Int'l L. & Bus. at 172; Nash, 43 St. Mary's L.J. at 487; Martine A. Petetin & Willard

12
some countries like Germany,47 their heavier reliance on evidence in writing as illustrated

in AM&S and Deere & Co.,48 and the lack of development in discovery laws such as in

Japan49

support this strategy of evasion.50

Other ways to evade unfavorable consequences include hiring local outside counsels

who would advise of receiving the protection and choosing a favorable choice of law and

forum for contract provisions.51 Having a counsel who can immediately advise a company

to “avoid litigation in forums like Italy or France that do not honor the confidentiality of

communications between general counsel and corporate employees” would save time and

cost for the company.52

More active suggestions include “lobby[ing] for changes in the rules of foreign

K. Tom, European Commission Hostility to Attorney-Client Privilege Creates Trap for Unwary, 20 No. 6
ACCA Docket 74, 88 (2002).
47
Kurt Riechenberg, The Recognition of Foreign Privileges in the United States Discovery Proceedings,
9 J. Int'l L. Bus. 80, 88 (Spring, 1988); see Pratt, 20 Nw. J. Int'l L. & Bus. at 172-73.
48
See Case No. 155/79, AM&S Europe Ltd. v. Commission, 1982 E.C.R. 1575; Re Deere & Co. v.
Cofabel NV, Commission Decision of December 14, 1984, [1985] 2 C.M.L.R. 554; Pratt, 20 Nw. J. Int'l
L. & Bus. at 173.
49
Daiske Yoshida, Note, The Applicability of the Attorney-Client Privilege to Communications with
Foreign Legal Professionals, 66 Fordham L. Rev. 209, 210, 224 n.90 (October, 1997); Pratt, 20 Nw. J.
Int'l L. & Bus. at 173.
50
Pratt, 20 Nw. J. Int'l L. & Bus. at 172-73; see generally Riechenberg, supra note 42, at 88.
51
Pratt, 20 Nw. J. Int'l L. & Bus. at 172.
52
Pratt, 20 Nw. J. Int'l L. & Bus. at 176, Josephine Carr, Are Your International Communications
Protected?, 14 No. 6 ACCA Docket 32, 34, 38 (November/December, 1996).

13