The decision of the Court of Justice of the EU in the AM&S case in 1980 is arguably one of the most controversial EU competition law decisions the court has ever made. The court limited the benefit of legal professional privilege in EU competition investigations to communications between firms and external, EU-qualified, lawyers, giving the European Commission the power to order disclosure of communications between firms under investigation and their in-house and non-EU qualified lawyers.

After nearly three decades, the court has been asked to reconsider this decision. In February this year, the court's Grand Chamber of 13 judges heard an appeal by Akzo Nobel against a decision of the court of first instance (now the general court) upholding a Commission decision, requiring Akzo to disclose advice given to it by a Dutch in-house lawyer.

The status of in-house legal advice from a Dutch cohen-advocaat is the focus of the appeal. However, intervention by the UK and Irish Governments, the Council of the Bars and Law Societies of the EU and the European Company Lawyers' Association has broadened the focus to include the status of communications with all in-house lawyers. Intervention by the American Corporate Counsel Association and the International Bar Association has also challenged the non-privileged status of non-EU legal advice, although this is not directly relevant to the subject of the appeal.

The basis for the existing disparity in treatment between external and in-house lawyers under the AM&S case is the principle that only communications with an independent lawyer may be protected by privilege. The court took the view in that case that the employment relationship between an in-house lawyer and his or her sole client prevents the in-house lawyer from acting independently.

The arguments made by Akzo and the interveners challenged the court's view. They provided examples of jurisdictions in which in-house lawyers are subject to the same rules of ethics and discipline as external lawyers and generally have a core duty of independence, regardless of their employment status. Where this independence exists, they argued, privilege should apply: it would be discriminatory to treat external and in-house lawyers differently where both are subject to the same rules. The Commission's response was largely a pragmatic one: many EU member states do not recognise privilege and it would create confusion and lead to the development of document safe havens if the Commission were able to copy a document in one jurisdiction but not another.

The advocate-general's opinion on the appeal, generally a good guide to the court's ultimate decision, is due to be issued on 29 April. However, the court may take a considerable amount of time to issue its judgment.

In the meantime, it is impossible to predict with certainty how the court will rule. A decision to afford privilege to communications with in-house lawyers would end nearly three decades of differential treatment and harmonise the EU competition law position with the position in many EU member states (including the UK). This would make a fundamental change to the role of thousands of in-house lawyers, and to the way in which firms manage their communications. A decision to uphold the AM&S case, on the other hand, is likely to fix the existing position for years to come. The question is whether the court will opt for a middle way, by prescribing the conditions an in-house lawyer has to satisfy before his or her advice can be afforded privilege – and if so, whether introducing a further level of complexity into this already complex area would be desirable.

Gillian Sproul is the head of the London competition group at Mayer Brown.