In context

Signed charter needed for foreign in-house counsel to have legal privilege

February 17, 2021
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In context

Can in-house counsel admitted to a non-Dutch bar invoke legal privilege in the Netherlands? The Rotterdam District Court has ruled that these “foreign in-house counsel” can – if they have that right under the jurisdiction where they work. In addition, if they work in the Netherlands, they must also meet specific criteria set by the Netherlands Bar. According to the court, foreign in-house counsel practising in the Netherlands should be treated the same as Dutch in-house counsel. The latter are required to sign a professional charter – a document that guarantees their independence and is signed by both employer and in-house counsel – in order to invoke legal privilege.

 

Although the ruling is not final, it is important to consider its implications. To err on the side of caution, we recommend that clients who employ foreign in-house counsel make sure that their charters are in order and signed and record that the standards required by this charter have thus far been upheld.

The ruling

The case concerned in-house counsel who were members of foreign bars, but who were employed by a company in the Netherlands or by a group company residing outside of the Netherlands. The question put before the court was whether these foreign in-house counsel were entitled to invoke legal privilege in Dutch criminal proceedings.

 

The Rotterdam District Court’s judgment on 28 January 2021 partly annuls an earlier ruling from 2019 (see previous In context article).

 

The District Court confirmed that independence is a decisive element when answering the question of whether in-house counsel has legal privilege. In contrast to the 2019 ruling, however, the court held that for both Dutch and foreign in-house counsel practising in the Netherlands, independence is – or at least is considered to be –sufficiently guaranteed if the charter is signed by in-house counsel and their employer. According to the ruling, it is not up to courts to assess actual compliance with the charter; that is up to the Dutch bar association. This approach is in sharp contrast with the previous ruling by the investigating judge, where the legal department as a whole was found to tack sufficient independence because the general counsel formed part of the executive committee.

 

Also in contrast to the 2019 ruling, the court held that foreign counsel practising outside of the Netherlands are not subject to Dutch law requirements. Their right to invoke legal privilege is regulated by the rules of the jurisdiction in which they work.

 

Practical implications

According to the decision, a signed charter is a straightforward way to guarantee and provide evidence of independence. It ensures that both Dutch and foreign in-house counsel working in the Netherlands can invoke legal privilege. A template for this “Professional Charter for In-House Counsel” is provided by the Netherlands Bar (in Dutch only).

 

The decision, however, does leave room for uncertainty. The court disregards the requirements (and guarantees) of foreign bars for foreign in-house counsel working in the Netherlands. Instead, the court directly imposes a requirement on foreign in-house counsel that only applies to Dutch in-house counsel who want to retain their right to invoke legal privilege. Moreover, it does so on penalty of losing the right to invoke legal privilege – and seemingly with retroactive effect.

 

The court has not indicated whether foreign in-house counsel practising in the Netherlands in the past without a signed charter, but acting within the spirit of the charter, can nevertheless invoke legal privilege.

 

Furthermore, what “practising in the Netherlands” means exactly remains unclear. The District Court has left it to an investigating judge to determine the period when  foreign in-house counsel worked “factually in the Netherlands”, and what documents would be the result of these activities. There do not seem to be any clear-cut criteria, for example, on differentiating between a foreign in-house counsel who is employed by a Dutch entity or one who is advising on or is active within the field of Dutch law.

 

For now, we advise clients who employ foreign in-house counsel working in the Netherlands to formalise a charter, if possible, in line with the template provided by the Dutch bar association, and to document that the standards required by this charter have been upheld by the foreign in-house counsel. We have developed an unofficial English version tailored to foreign in-house counsel working in the  Netherlands. For foreign in-house counsel who work outside the Netherlands, it is advisable to verify the privilege rules of the jurisdiction in which they practise to assess whether legal privilege can be invoked in future Dutch proceedings.

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