The law in the European Union regarding legal professional privilege attaching to legal advice given by and communications with in-house lawyers has undergone a recent shift as a result of the decision of the European Court of Justice (ECJ) in Akzo Nobel v. Commission.
There is no Hong Kong decision that deals directly with the extent of legal professional privilege enjoyed by in-house counsel, and it is generally assumed that the law reflects the English position, which is that communications passing between an employee of a company and an in-house lawyer are privileged provided they are confidential and are directed to, or emanate from, the lawyer in his professional capacity and for the purpose of getting or giving legal advice or assistance.
However, the ECJ has held in the Akzo case that for the purposes of investigations conducted under EU law, documents prepared by in-house lawyers are generally not to be regarded as privileged, on the basis that in-house lawyers, even if admitted to a local Bar association, are not "independent" as they are bound to the client by way of an employment relationship. Documents generated in order to seek external legal advice or to report the content of communications with external lawyers are, however, privileged.
The ECJ also confirmed that legal professional privilege can only apply to communications with external EU qualified lawyers, and that communications with non-EU lawyers (such as Hong Kong lawyers) are not protected by privilege.
Whilst the Akzo decision only applies to claims to legal professional privilege arising out of investigations under EU rules, and the English and Hong Kong courts have not considered the matter since the decision was made, the decision represents a further erosion of the right to assert privilege, already weakened in the last decade in the common law world by the decisions of the English Court of Appeal and House of Lords in the Three Rivers litigation. In-house counsel should bear in mind that asserting legal professional privilege is no longer a right to be taken for granted, and should consider checking whether advice given to colleagues in other jurisdictions, particularly within the EU, is likely to be privileged before providing that advice.