Is it just me, or does anybody else find it outrageous that European Union (EU) law denies privilege to in-house counsel? It all started back in 1982 with the AM & S case, but since then the European Commission (EC) has continued to doggedly defend this discrimination.

It matters because legal professional privilege in most jurisdictions is an essential part of the framework that allows lawyers to advise their clients without fear of their advice being used against their client.

Just as importantly, it allows clients to be completely candid when seeking legal advice. Without this protection, it is very hard to prop-erly assess risks and for reliable legal advice to be given. While the scope of privilege in the UK has been reduced in recent years, it still remains an important tool for lawyers and their clients. UK courts make no distinction between external and in-house counsel, they focus on the substance of what is being communicated between lawyer and client to determine whether it attracts privilege.

Not so with the EC, which continues to claim that in-house lawyers are not capable of providing an independent legal service, and in a number of investigations has actively targeted the advice given by them. It takes the view that the status of in-house lawyers as employees deprives them of real professional independence and makes them mere functionaries of management.

Former Competition Commissioner Mario Monti expressed fears that granting privilege to in-house counsel could lead to a "real sanctuary within companies" and hinder investigations. He later tried to qualify his remarks by saying that the EC acknowledged that "while the vast majority of companies are fully prepared to co-operate in competition law proceedings, a minority indulge in violation which legal privilege could prevent the Commission from detecting". So to catch the minority of dishonest companies and their unscrupulous in-house counsel you deprive all in-house counsel and their clients of an important legal protection. How proportionate is that?

Security of tenure as an employee is no handicap to my independence as a lawyer. My fundamental professional obligation is to counsel my client to comply with the law, and I believe that in virtually all jurisdictions lawyers are subject to professional codes of conduct. The EC is simply being opportunistic in grabbing evidence that should be privileged.

Perversely, its stance actually hinders compliance programmes, as in-house counsel know that their advice and analysis of facts and risks can actually be used against their client.

This brings me on to the Carson case in 1998. Here, the EC sought to establish privilege over communications with its own in-house counsel on the basis that to disclose them would "render public the debate inside the institution, and fragilise the legal act once adopted". They claim there is a fundamental difference between the internal documents of a company and those of a public institution that acts in the general public interest.

However, and there is a splendid irony here, the case may actually have started a process of undermining the EC's position on privilege for in-house counsel. The court in the Carson case based its ruling on other factors. It found that the EC had to feel able to seek independent advice from its in-house counsel and needed to avoid a situation where it lost interest in requesting written opinions.

Those are two of the fundamental reasons why privilege is recognised in the first place and there is absolutely no reason to distinguish between public institutions and private companies. The court's reasoning suggests (quite rightly) that in-house counsel's salaried status is not incompatible with their professional independence.

Now that we have the Akzo Nobel case, this issue is being looked at again by the judicial institutions of the EU. The Court of First Instance granted interim measures on application by the company, that in-house counsel communications in connection with a compliance programme should attract privilege. The European Court of Justice quashed the order as it said there was no urgency but it has not killed the issue yet.

The question is still very much alive and I am hopeful it will be answered at some stage in 2007. It would be nice if this unjustified discrimination could be ended before its 25th anniversary next year.

Chris Groves is vice president of legal affairs at Turner Broadcasting.