Lord Chancellor Refuses to Intervene in In-House Lawyers Case

Scotland
Kenneth Clarke has refused to intervene in a case in which the General Court of the European Union ruled that an application was inadmissible solely because the company had used in-house lawyers to present their case. 

In Prezes Urzedu Komunikacji Electronicznej (UKE) (Case T-226/10 the court held that the degree of independence of in-house lawyers was less than that of an external lawyer. The requirement for independence meant that UKE's in-house lawyers had no standing to bring a case before the European Courts. For further details about the case and the court's decision see our October 2011 Alert.

A number of bodies, including CBI Scotland and the UK Law Societies had written to the Lord Chancellor urging him intervene in an appeal in the UKE case. However Mr Clarke has refused, basing his decision on "long standing EU case law on the interpretation of Article 19 of the court's statute, which relates solely to who may represent a party before the courts of the European Union, and has to date no domestic ramifications". 

This case is the latest in a line of decisions from the European Courts which make a distinction between in-house and external lawyers, including the decision in Akzo Nobel in which it was held that communications with in-house lawyers would not be treated as privileged in European Commission competition law investigations.

Disappointingly the European Courts have made this distinction notwithstanding the professional obligations imposed on in-house lawyers in many jurisdictions, including the UK, to ensure independence.  This failure to recognise the regulation and professional status of in-house lawyers seems an overly simplistic approach to the concept of independence - and one which risks setting a precedent in other areas of European law.

We will report on the outcome of the appeal in due course.