Following dawn raids in the sector of electronic consumer products (white and brown goods) in October 2013, the investigation services of the French Competition Authority (the FCA) obtained a warrant from the liberties and custody judge (the JLD) to carry out dawn raids in Whirlpool’s premises in May 2014.
On 8 November 2017, the president of the Paris Court of Appeal dismissed Whirlpool’s appeal against the warrant of the JLD allowing these dawn raids. However, he decided, in the context of the challenge of the conduct of the dawn raids, that the FCA should not have seized emails discussing the defence strategy of the company, even though these emails did not emanate from outside counsels but from in-house counsels.
A potentially case-law altering decision
Following dawn raids at its competitors’ premises (which did not concern Whirlpool), Whirlpool had requested advice from its outside counsels specialising in competition law. Namely, it asked the outside counsels to prepare its defence, anticipating an investigation into its participation in an alleged cartel. Subsequently, Whirlpool’s in-house counsels exchanged between themselves and with other company employees about the findings of the law firm, summarising and commenting on the strategy and adding their analyses to their outside counsels’. These exchanges were seized by the FCA.
Whirlpool argued that the FCA breached its rights of defence and the principle of protection of legal privilege by identifying, reading and seizing these exchanges, which referred to the outside counsels’ strategic analyses regarding the defence of the company, notably in the course of the ongoing investigation.
The president of the Paris Court of Appeal agreed with this argument, considering that although these emails did not originate from, nor were addressed to, an outside counsel, they referred to the defence strategy set up by Whirlpool’s outside counsels so that the FCA’s seizure was likely to constitute an infringement of legal privilege.
The seizure of these documents was therefore annulled, and the FCA is prevented from retaining copies and using them later.
This is a very innovative decision as the protection of legal privilege was up to now only granted to direct attorney–client correspondence. This decision, if confirmed, could extend the protection granted to attorney–client correspondence to the internal communications between in-house counsels who refer to the defence strategy devised by the company’s outside counsels, even if they add their own interpretation and commentary to the outside counsels’ analysis and strategy.
Nevertheless, the Paris Court of Appeal did not grant a blank protection to in-house counsels’ correspondence. The court rejected the voluntary action brought forward by the French Association of In-House Counsels, due to lack of interest, stating that in-house counsels do not benefit from the same protection as outside counsels, notably legal privilege, granted by a law which only concerns attorney-client correspondence, i.e. outside counsels.
How Reed Smith can help
With extensive experience with anticompetitive investigations and litigation before competition authorities and courts, Reed Smith’s EU, Competition & Regulatory team can assist you if you are involved in such proceedings, from the start of investigations to dawn raids and their appeals before the courts, to advising and defending your company in the course of the authorities’ investigation and proceedings, to appeals on the merits, all the way to the defence against private claims for damages, following decisions of the FCA or stand-alone.
Client Alert 2017-289
