5 五月 2021 Daniella Strik  -  Georgios Fasfalis Business Crime - Dispute Resolution

Privilege is back! The Rotterdam District Court rules on privilege for in-house counsel

Executive summary

On 28 January 2021, the Rotterdam District Court (the "Court") issued a decision regarding privilege for in-house counsel under Dutch law. It determined that privilege may apply to in-house counsel working for a Dutch company outside the Netherlands, if such persons enjoy privilege under their home jurisdiction rules. On the contrary, in-house counsel (Dutch-qualified or otherwise) working in the Netherlands can only benefit from privilege if they enter into an agreement with their employer – also known as a “professional statute” – in order to ensure their independence.

Background

The 28 January 2021 Court decision comes in the aftermath of a raid of a Dutch oil company’s premises by the Dutch Public Prosecution Service (OM) in February 2016. Said raid was conducted in connection with an investigation as to how rights to explore an oil field in Nigeria were obtained and related bribery allegations.

The 7 October 2019 examining magistrate's decision

During the raid, the Dutch Public Prosecution Service seized documents and data sent or received by the Dutch oil company’s in-house counsel, to be used for the Dutch criminal proceedings. The company filed a complaint, arguing that this seizure was unlawful under Dutch criminal law, which led to a decision by the examining magistrate on 7 October 2019. 

In his decision, the examining magistrate considered that:

  • unlike Dutch in-house counsel, who were obliged to sign a professional statute in order to safeguard their independence from their employer and be covered by legal professional privilege, non-Dutch in-house counsel had not signed such a document; and
  • the head of the legal department of the relevant Dutch oil company was a member of the Executive Board of the same company; as a result, the independence of the persons working for said legal department was not sufficiently guaranteed.

In light of the above, the examining magistrate ruled that non-Dutch-qualified lawyers working as in-house counsel, either within or outside the Netherlands could not be considered as holders of confidential information for the purposes of Dutch criminal law and could not benefit from legal professional privilege. 

These findings were disputed by the Dutch oil company, leading to the 28 January 2021 Court decision.

The 28 January 2021 Court decision

The Court ruled on 28 January 2021 that non-Dutch lawyers, working as in-house counsel outside of the Netherlands and enjoying legal professional privilege in their home jurisdiction, can enjoy legal privilege in the Netherlands without having to sign a professional statute. The Court noted that the mere fact that in-house counsel worked for a subsidiary of a Dutch company was insufficient to justify the application of Dutch legal professional privilege requirements concerning the conclusion of a professional statute. This part of the Court’s decision overruled the abovementioned 7 October 2019 examining magistrate's decision. 

On the other hand, the Court found that non-Dutch lawyers working as in-house counsel in the Netherlands are bound by Dutch legal privilege law requirements. They must sign a professional statute in order to benefit from legal professional privilege under Dutch law,  in a similar fashion as their Dutch colleagues. The Court disagreed with the Dutch oil company’s argument that the professional statute is a mere formality. According to the Court, the absence of a signed professional statute justifies depriving in-house counsel of legal professional privilege. It is noted that the Court did not address the argument of the abovementioned 7 October 2019 examining magistrate's decision regarding the position of the head of the legal department as a member of the relevant Dutch oil company’s Executive Board.

An appeal has, in the meantime, been instituted against the 28 January 2021 Court decision. 

Main takeaways

This recent decision can be viewed as a positive development, as it reaffirms or even broadens the scope of legal professional privilege under Dutch law, for some categories of legal professionals.

In light of this development, it would be advisable for non-Dutch lawyers working as in-house counsel in the Netherlands to sign a professional statute, which would ensure their independence from their employer and safeguard their right to legal professional privilege under Dutch law.