Akzo Nobel v Commission: privilege after a dawn raid, run with Claira

On February 12 and 13, 2003, Commission officials, assisted by the UK's Office of Fair Trading, inspected the premises of Akzo Nobel Chemicals and Akcros Chemicals in Eccles, near Manchester. The Commission had ordered the inspection under Article 14(3) of Regulation No 17 to look for evidence of possible anti-competitive practices. As the officials went through the files, the companies claimed legal professional privilege over five documents.

The first two, Set A, were a typewritten memorandum from Akcros's general manager to a superior and a copy carrying handwritten notes that referred to contacts with an external lawyer. The officials put copies of both in a sealed envelope. Set B held the general manager's handwritten notes, made while preparing the memorandum, and two emails between the general manager and Akzo's coordinator for competition law, a member of the Netherlands Bar employed by the company. The head of the team decided that Set B was not privileged and took copies into the file.

We act for the two companies, and we run the review as it could be run today.

The judgments deal with five documents, and the set behind them is larger: the mailboxes and files of the people at the Eccles site, with the general manager first among them. The record gives no volumes, so the first job is to see what has been loaded into Nuix Discover.

Claira's early case assessment works from metadata alone. It reports the volume of the set, the custodians and other people in it, the file types and the dates it covers, and it suggests segments for review, without reading any document or writing anything to the case. For a privilege review the people come first, since they show whose correspondence the officials would have been able to reach, and the date coverage shows how far back before the inspection the set runs.

The assessment downloads as a dated PDF. The team keeps it on the file, because any later argument about the scope of the privilege claims starts from what the set contained.

A Case Context started from the regulatory investigation template is called a Review Mandate, with sections for the regulator and parties, the mandate and scope, the compliance issues, and sensitive and privileged material. The team would generate it from up to five key documents, the inspection decision among them, then answer the questions Claira raises about missing information with the Agent.

The privileged material section carries the rule the review has to apply. In a Commission investigation, privilege needs two conditions together: the exchange must be connected to the client's rights of defence, and it must come from an independent lawyer, which the Court of Justice defined as one bound to the client by no relationship of employment. The section lists the external firms and every in-house lawyer in the group, each marked for what they are, so that a prompt can tell them apart.

A partner then approves the Review Mandate. Only an approved context reaches the prompt generator, so approval fixes the brief that every later prompt is written from.

The Privilege and types template in Multi-Code fills three fields in one pass: a privilege call, the privilege types and the basis for the call. Use with context fills the template's placeholders from the approved Review Mandate, and the team would then rewrite the types for EU law: a communication with an external lawyer, an internal note reporting such a communication, and an exchange with an in-house lawyer, which the prompt sends to a lawyer for a decision. The prompt can also ask for the passages that support each call.

Handwriting changes the scan settings. Text mode reads extracted text alone, so annotated copies and handwritten notes need Scan as set to Image, or to Auto, which picks a mode for each document. The team tests the prompt with Scan Document on 10 to 25 documents chosen to include the hard ones, marks the version Final in Prompt History and starts the bulk scan. Results are written to the Discover fields while the task runs, so checking can begin before it finishes.

Three groups are read first. Every exchange with an in-house lawyer goes to a senior lawyer, since EU law gives those documents no protection in a Commission investigation and the team needs to know what they say. Documents called privileged are sampled, and any passages the prompt asked for are checked against the text. A random sample of documents called not privileged shows what the prompt missed.

For handwritten pages, Agent Mode helps with the reading. The open document goes with each question, scanned pages and handwriting included, so a reviewer can ask the Agent whom a note names and what conversation it records, then check the answer on the page.

Where the calls go wrong in a pattern, the team revises the prompt, tests it on the overturned documents and rescans them into a second field. Each bulk scan links to the prompt version it ran, and the Bulk Task History Report records the prompt text, the model and the comments left on each task.

An internal note that mentions a lawyer is easier to place when the team can see it alongside the contacts with outside counsel around it. In this matter that sequence would hold the memorandum, the notes made while preparing it, the annotated copy and the emails with the competition law coordinator, with whatever contacts with the external lawyer the set records.

An Insight started from the Chronology template, in the Timeline format, can draw on the completed privilege task, up to 25,000 documents, and set those events out in date order. Each statement carries a citation to its source document, and hovering over a citation shows the result Claira wrote for that document. The citations confirm which document a line came from, and the reviewer still checks that the document says what the line claims.

The chronology also shows the team where the set is quiet, which matters when an annotation refers to advice that no document in the set records.

Claira can sort documents into the categories the law uses, and the decision to press a claim stays with the lawyers. In 2007 the General Court dismissed both of the companies' actions, and their appeal to the Court of Justice concerned only the two emails with the in-house lawyer. The companies argued that enrolment at the Netherlands Bar, and the professional rules that came with it, secured the coordinator's independence. The Court held that those rules could strengthen an in-house lawyer's position within the company, and could still not ensure independence comparable to that of an external lawyer.

The same judgement calls arise during an inspection. The General Court described the procedure for a contested document: the company gives the officials its reasons, the officials may place a copy in a sealed envelope, and the Commission must not read it before adopting a decision that the company can take to court. Which documents to contest, and on what grounds, is decided by the people who sign the submissions.

The work product that leaves the firm is a log of the documents withheld and the reasons for each. An Insight from the Privilege log template compiles the privilege determinations from the bulk task with their sources. It exports to Word for the submission, to Excel for the team's own tracking, and to PDF with live citation links, so a partner can open any entry's source document from the page. Before anything is sent, a lawyer checks each row against its document.

The real case ended in Luxembourg. On September 14, 2010, the Court of Justice dismissed the appeal and confirmed that legal professional privilege does not cover exchanges within a company or group with in-house lawyers. It ordered Akzo Nobel Chemicals and Akcros Chemicals to bear the remaining costs of the proceedings jointly and severally.