Can foreign in-house counsel invoke legal privilege in the Netherlands?

In the Netherlands, it has since long been accepted that an in-house lawyer can be admitted to the Dutch bar ('advocaat in dienstbetrekking').¹ At the same time, the rights and obligations of in-house lawyers admitted to a foreign bar (or possessing an equivalent qualification) have remained uncertain, especially as concerns their entitlement to legal privilege.² Recently, the Dutch Supreme Court has settled this issue, ruling that in-house lawyers who are qualified abroad are entitled to legal privilege in the Netherlands if certain conditions are fulfilled.³

Every in-house counsel admitted to the bar needs a 'professional charter'…

The Supreme Court has held that every in-house counsel working as 'advocaat' in the Netherlands needs to possess a 'professional charter' ('professioneel statuut'). This charter is a contract between the in-house attorney and their employer, which codifies the employer's undertaking to respect the attorney's independence and to enable them to comply with all rules of professional conduct, including those related to confidentiality (which may imply that the attorney cannot work in an open-plan office).⁴ A template of the charter (in Dutch) can be found on the website of the Dutch bar association.

For Dutch in-house counsel admitted to the Dutch bar, the obligation to conclude a professional charter already existed pursuant to the binding regulations of the Dutch bar association.⁵ However, until the Supreme Court's recent decision, it was uncertain whether the absence of a professional charter would preclude the attorney's right to legal privilege. The Supreme Court has now held – in contrast to the Advocate-General⁶ – that the conclusion of a professional charter is a mandatory condition that needs to be met before an in-house lawyer, irrespective of the jurisdiction where they are admitted to the bar, can invoke legal privilege.⁷

… or equivalent agreement for foreign in-house counsel

However, the Supreme Court has specified that in-house counsel admitted to a foreign bar can also meet this requirement by concluding an equivalent agreement with their employer. This agreement may be governed by the law of the attorney's home jurisdiction and does not need to be identical to the Dutch professional charter, but it should provide equivalent guarantees in respect of the attorney's ability to work independently and to comply with applicable rules of professional conduct without any interference by the employer.⁸

Additional conditions for non-EU/EEA/Switzerland counsel

The Supreme Court has further determined that any attorney qualified outside the EU, EEA or Switzerland can only invoke legal privilege in the Netherlands if their activities meet a double test. First, it needs to be confirmed that the attorney would be entitled to privilege under the law of their home jurisdiction in respect of the activities concerned. Second, privilege will only apply on the condition that if the same activities would have been performed in the Netherlands by an attorney admitted to the Dutch bar, this attorney would have been entitled to privilege.⁹

Privilege in respect of what?

Even if an in-house lawyer is entitled to legal privilege by virtue of their professional qualification, this does not imply that privilege can be invoked in all circumstances. Rather, an in-house lawyer can invoke privilege only in respect of information that was shared with them in their capacity as attorney ('advocaat').¹⁰

In this regard, it should be noted that the recent decision of the Supreme Court indicates that legal privilege applies only in the context of the in-house attorney's 'regular legal practice'. Whether this condition is fulfilled needs to be assessed on a case-by-case basis. According to the Court, it is of particular importance whether the in-house counsel's activities concern pending or prospective proceedings.¹¹

Earlier case law has determined that it is in principle up to the attorney to assess whether specific documents are privileged.¹² Under Dutch law, the right to legal privilege is held by the attorney and not by the client, because the public interest served by legal privilege is wider than that of the individual client: it serves to protect everyone's right to consult an attorney in confidence, without any fear of disclosure.¹³ The attorney's determination that privilege applies is in principle not subject to review, unless that determination is undoubtedly incorrect.¹⁴

The in-house counsel's checklist

The Dutch Supreme Court's recent ruling clarifies that in-house counsel admitted to the bar can only invoke legal privilege in the Netherlands if the following questions can be answered in the affirmative:

• Has a professional charter or an equivalent agreement been concluded between the attorney and their employer?
• If the attorney's home jurisdiction is not in the EU/EEA/Switzerland: would privilege apply under the laws of the in-house lawyer's home jurisdiction and would an attorney admitted to the Dutch bar be entitled to privilege if they had performed the same activities in the Netherlands?
• Has the attorney been entrusted with the relevant matter in their capacity as attorney?

Remaining uncertainties

Although settling some controversies, the Supreme Court's decision has left other questions unanswered. For instance, the Supreme Court does not address the scenario of non-EU/EEA/Swiss attorneys based in the Netherlands.¹⁵ In respect of activities undertaken outside the Netherlands, questions of applicable law arise: should privilege be assessed under Dutch law when invoked in Dutch proceedings regardless of the place of performance or the law applicable to the services?¹⁶ The Supreme Court's decision suggests that qualified in-house lawyers must always possess a professional charter, regardless of their location, if at some point they would want to rely on legal privilege in Dutch proceedings.

Another remaining uncertainty concerns the scope of the legal privilege held by qualified in-house counsel, which the Court limits to activities undertaken in the context of a 'regular legal practice'. It may be difficult to determine whether a document is shared in such a context, especially if the relevant activities are unrelated to legal proceedings.¹⁷ We recommend that in-house lawyers take measures to specify when they act as 'advocaat', for instance by confirming their engagement by the company in that capacity on a particular matter and by maintaining their own case file.

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Notes

1. See the Conclusion of Advocate-General Spronken in the Shell case, 25 January 2022, ECLI:NL:PHR:2022:62, para. 9.2. The binding regulations of the Dutch bar association require that the attorney, when performing activities under the employment contract, acts exclusively for the employer and related group companies. The activities should predominantly involve the practice of law. See for a general comment on the divergences among different jurisdictions as concerns the position of in-house counsel, 'Commentary on IBA International Principles on Conduct for the Legal Profession', 11 October 2018, page 14.
2. Legal privilege is regulated differently in different jurisdiction, see e.g. the 'Commentary on the revised text of the 2020 IBA Rules on the Taking of Evidence in International Arbitration', noting that Article 9 of the IBA Rules "seeks to encompass both the common law understanding of counsel-client privilege and the civil law understanding of the duty of professional secrecy". It should be noted that pursuant to case law of the Court of Justice of the European Union, an in-house lawyer cannot invoke legal privilege in respect of matters governed by EU competition law. See Dutch Supreme Court, Decision of 15 March 2013, ECLI:NL:HR:2013:BY6101.
3. Dutch Supreme Court, Decision of 24 May 2022 (Shell), ECLI:NL:HR:2022:760. The Court explicitly noted that its decision concerned legal privilege in criminal proceedings (see para. 4.1). It is generally considered, however, that since legal privilege is derived from a general principle of law, it should apply similarly in different fields of law.
4. See the policy adopted by the bar council of Amsterdam on 8 November 2019.
5. Article 5.12, Verordening op de advocatuur.
6. Conclusion of Advocate-General Spronken in the Shell case, 25 January 2022, ECLI:NL:PHR:2022:62, para. 11.20.
7. Dutch Supreme Court, Decision of 24 May 2022 (Shell), ECLI:NL:HR:2022:760, para. 4.4.2.
8. Ibid, para. 4.4.3 and 4.4.4.
9. Ibid, para. 4.4.4.
10. Dutch Supreme Court, Decision of 10 November 2015, ECLI:NL:HR:2015:3258, para. 3.3.
11. Dutch Supreme Court, Decision of 24 May 2022 (Shell), ECLI:NL:HR:2022:760, para. 4.5.
12. Dutch Supreme Court, Decision of 2 March 2010, ECLI:NL:HR:2010:BJ9262, para. 3.3. It should be noted that the Supreme Court has accepted that under certain circumstances, a client can refuse to disclose information that was shared with an attorney, even if that attorney does not invoke legal privilege. Dutch Supreme Court, Decision of 3 April 2020 (Cremers/SRH), ECLI:NL:HR:2020:600, para. 3.3.2. In that case, a third party may need to review whether the client's refusal to disclose allegedly privileged information is justified. Ibid, para. 3.4.1.
13. Dutch Supreme Court, Decision of 1 March 1985 (Notaris Maas), ECLI:NL:HR:1985:AC9066, para. 3.3.
14. Dutch Supreme Court, Decision of 2 March 2010, ECLI:NL:HR:2010:BJ9262, para. 3.3; Dutch Supreme Court, Decision of 3 April 2020 (Cremers/SRH), ECLI:NL:HR:2020:600, para. 3.2.4.
15. Dutch Supreme Court, Decision of 24 May 2022 (Shell), ECLI:NL:HR:2022:760, para. 4.4.4, apparently only addresses activities performed in the home jurisdiction of the non-EU/EEA/Swiss lawyer ('gesteld dat die werkzaamheden in Nederland zouden zijn verricht door een in Nederland ingeschreven advocaat' (onderstreping toegevoegd)).
16. The Advocate-General had noted that parties agreed that Dutch law applied (see para. 5.5). See on this issue B.J. van het Kaar, IPR-bewijsrecht en bewijsverkrijging (2008) para. 3.4.4.
17. In view of the Supreme Court’s consideration that it is of particular importance whether the in-house counsel's activities concern pending or prospective proceedings (para. 4.5).