In a judgment of 5 March 2013, the Brussels Court of Appeal set out the conditions under which the Belgian Competition Authority can seize documents when investigating competition law violations. More specifically, the appellate court ruled that legal advice of in-house lawyers is privileged and hence cannot be seized. In addition, the court set out a number of good practices which the Authority should follow in order to determine whether electronic documents fall within the scope of its investigation.
The case before the court was based on dawn raids conducted by the Competition Authority at Belgacom's premises in 2010. Belgacom was suspected of having abused its dominant position on the high-speed Internet market. During the raid, the Authority copied thousands of electronic files and seized legal advice provided by Belgacom's in-house lawyers.
Following the raid, Belgacom sued the Competition Authority, claiming the Authority had seized privileged correspondence with its in-house lawyers and challenging the methods used to select electronic files in the scope of the investigation.
Advice of in-house lawyers is privileged
The Brussels Court of Appeal ruled that both communications between a company and its external counsel (advocaat /avocat) as well as legal advice provided by the company's in-house counsel are privileged.
The question of whether correspondence with in-house lawyers is privileged has long been a subject of discussion under Belgian law. At the EU level, the European courts recently confirmed the AkzoNobel case, denying legal privilege to correspondence between a company and its in-house lawyers. However, under Belgian law, the legislation establishing the institute for company lawyers provides that legal advice rendered by in-house counsel to the company's management is confidential.
Further to the Brussels Court of Appeal's judgment, it is now clear that, under Belgian law, the legal advice of in-house lawyers is privileged. Furthermore, the concept of legal advice is interpreted broadly to cover not only final opinions of company lawyers but also general communications between the company and its in-house counsel regarding such opinions, such as requests for advice and preliminary and draft opinions.
Hence, during a dawn raid, the Competition Authority can no longer seize legal advice exchanged between a company and its in-house counsel, regardless of whether they are carrying out the inspection on their own behalf or at the Commission's request. However, if the European Commission carries out the inspection itself, it will still be allowed to seize legal advice provided by in-house counsel, pursuant to the AkzoNobel decision.
Good practices to select electronic files in the scope of an investigation
When conducting inspections at a company's premises, the Competition Authority can only seize electronic files which fall within the scope of its investigation. Unfortunately, Belgian competition law does not indicate how electronic files should be selected.
In the Belgacom case, the Competition Authority seized thousands of electronic files, including some which fell outside the scope of its investigation. All files were copied and transmitted to the competition prosecutors, who made a final selection and deleted those documents deemed to fall outside the scope of the investigation. Belgacom had ten days to contest the selection of documents.
The Brussels Court of Appeal condemned this practice as a fishing expedition. It set out a number of good practices for the Competition Authority to follow in the future when selecting electronic documents.
First, the documents should be selected in the company's presence. Second, the selection should be made using keywords, which should be closely connected with the practices under investigation. Hence, general terms which could cover a wide array of subjects are not allowed. In addition, the selection of documents on the basis of keywords should be double checked using another set of keywords and spot checks. Finally, the company should be given sufficient time to review the selection, taking into account the complexity of the case. The prosecutors should permanently delete documents deemed to fall outside the scope of the investigation.
It should be noted that the Competition Authority's powers to seize electronic documents when conducting an inspection remain unimpaired. However, when exercising these powers, the Authority must take into account the principles set out by the Brussels Court of Appeal.
The Authority has announced that it may appeal this decision to the Belgian Supreme Court (Hof van Cassatie/Cour de Cassation).
The recent bill amending the Belgian Competition Act does not lay down rules for the seizure of electronic documents by the Competition Authority in the context of an inspection. This judgment may prompt the legislature to take action in this area.
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