31 May 2022 | By Marten Männis
Professional statute essential for Dutch in-house counsel, Supreme Court holds
On 24 May 2022, the Dutch Supreme Court held a judgment on in-house counsel and on their right to invoke legal professional privilege. The case concerned the right of foreign in-house lawyers at Shell that were not registered as lawyers in the Netherlands and is the continuation of the decision handed at the Rotterdam District Court in 2021.
In the Rotterdam decision, the Court found that fact that in-house counsel working in the Netherlands must sign a professional statute in which their employer guarantees their independence, in accordance with Article 5.12 of the Dutch Legal Profession Regulations, to invoke legal professional privilege. Furthermore, in-house lawyers working abroad must prove legal privilege based on their local jurisdictions and demonstrate that they fulfil the relevant criteria. The court confirmed that foreign lawyers could benefit from legal professional privilege if the regulations of the country where they are registered as lawyers grant privilege.
Though the appeal against the Rotterdam District Court’s decision in cassation was declared inadmissible, the Dutch Supreme Court made some general remarks about legal professional privilege regarding in-house counsel.
The Court did note that under Dutch law, a distinction must be made between in-house and external counsel. It references the ‘Cohen-advocaat’ scheme, introduced in 1998. In addition, it refers to the regulation on the legal profession by the Dutch Bar Association (NOvA), under Article 5.12 requires in-house lawyers to commit themselves to a professional statute signed by themselves and their employer. It adds a quote (translated to English): “The professional statute protects the lawyer’s independence within their professional capacity against undue influence by their employer, with whom by definition there is a hierarchical relationship.” From this the Court concludes that the independence of an in-house counsel is not self-evident under the rules of the Dutch Bar Association.
The Court also rejected the argument by which the duty of confidentiality and the right of nondisclosure should be considered as two separate core values of a lawyer. It again refers to the Regulation on The Legal Profession from which it concludes that confidentiality hinges on the independence of a lawyer. For in-house counsel specifically, it entails signing the professional statute guaranteeing their independence.
The Court reaffirmed the Rotterdam District Court decision with regards to foreign in-house counsel employed abroad, in which the local rules and regulations confer the rights that the lawyer in question enjoys. Company lawyers based aboard cannot invoke legal professional privilege when they are employed by a Dutch company unless the regime gives them the right to do so. This means that a company lawyer based in Switzerland, where in-house counsel do not enjoy legal professional privilege, but who is employed by a Dutch company, cannot invoke a right of nondisclosure, as they do not have the right either under Swiss law nor under Dutch law.
Foreign in-house counsel who work in the Netherlands must sign a professional statute, in accordance with the Dutch Bar Association, in order to meet the conditions under Dutch law in which in-house counsel can invoke legal professional privilege. This entails that for foreign company lawyers in the Netherlands to enjoy the same rights as Dutch company lawyers, the conditions for guaranteeing independence are identical.