European Union: Ensuring Legal Independence: CJEU's Decision In Bonnanwalt v EUIPO Raises Questions On Lawyer Independence Before The EUIPO

In a significant development for legal representation before the General Court and the Court of Justice of the European Union ('CJEU'), the recent case of bonnanwalt v EUIPO¹ has highlighted the critical issue of the independence of lawyers. This case delves into the nuanced interpretation of the term 'lawyer' within the context of EU law and has implications for legal practitioners looking to appear before the European Union Intellectual Property Office ('EUIPO').

Background

The dispute arose when bonnanwalt filed an application for revocation based on non-use against the EU trade mark 'tagesschau.' The EUIPO partially revoked the trade mark, leading bonnanwalt to appeal to the Board of Appeal. Having lost the appeal to the Board of Appeal, bonnanwalt appealed to the General Court (case T-83/20). However, the General Court deemed bonnanwalt's appeal inadmissible, citing a lack of proper representation as per Art. 51(1) of the Rules of Procedure of the General Court and Art. 19(3) and (4) of the Statute of the Court of Justice. The crux of the matter was the perceived lack of independence of bonnanwalt's lawyer.

Independence concerns

The General Court's ruling hinged on the fact that bonnanwalt's lawyer was the sole employee of a law firm, which was owned and managed by bonnanwalt's managing director. This close association led the court to conclude that the lawyer lacked the necessary independence, raising concerns about potential undue influence on the lawyer's professional opinions due to aligned interests between the law firm and bonnanwalt.

CJEU's autonomous interpretation

Bonnanwalt's appealed to the CJEU, which rendered a significant decision, emphasising interpretation of the term 'lawyer' within the Rules of Procedure and the Statute must be interpreted autonomously and independent of national law. The CJEU delineated two dimensions of a lawyer's independence: the absence of an employment relationship with the client (negative dimension) and adherence to professional ethics (positive dimension).

While recognising that a lawyer employed by a firm generally maintains independence, the CJEU acknowledged limitations to this presumption. For example, they said that an associate at a firm could not act for a partner in their personal capacity, as there would likely to be execessive control by the partner over the associate. In this case, however, the court emphasised the lack of a direct relationship between bonnanwalt's lawyer and the company, thus alleviating concerns of undue control. There were not sufficient indications that the lawyer acted under the control of the managing director of bonnanwalt in way that would threaten the lawyer's independence.

The findings of the CJEU are compatible with the earlier decision of European Commission v Akzo Nobel,² in which the CJEU found that, under EU law, legal professional privilege does not extend to employed in-house lawyers, as they are not sufficiently independent. This can be contrasted with the common law approach, which is to trust the independence of lawyers' professional duties, including when acting as an in-house lawyer, as their primary duty is to the English Courts and the applicable regulator (the Solicitor Regulatory Authority or Bar Council), which takes precedence over their duty to their employer.

As the Law Society Chief Executive, Desmond Hudson said after the Akzo Nobel decision:

"The court has missed its opportunity to recognise how the role of the in-house lawyer has developed... I hope EU policy makers will come to appreciate the great value that such lawyers bring to both the private and public sectors. It is in their interests to trust these lawyers to get on with their jobs and to trust their regulators to guarantee their independence and ethical behaviour. A solicitor is a solicitor, whether working in private practice or in commerce and industry."

Commentary and unexplored dimensions

The commercial register shows that bonnanwalt's managing director is also the sole shareholder, and both bonnanwalt and the law firm share identical addresses. Although these facts were not explicitly considered in the court decisions (either the General Court or the CJEU), they raise pertinent questions about the true independence of the lawyer. Given the CJEU's example of an associate representing a partner's interests posing independence concerns, it is difficult to see why the same should not apply when representing a company fully owned and managed by that partner. As implied by the title 'managing director,' the primary responsibility of such a role is to oversee the company's operations, and so a degree of control is expected. Although a managing director may be subject to the directives and control of the company's shareholder(s), the director's interests typically coincide with those of the company. Here, the lawyer is contracted and instructed by the very same individual who serves as their employer, potentially enabling direct oversight and control over the lawyer's professional activities.

Conclusion

The CJEU's ruling in bonnanwalt v EUIPO provides some guidance, if not perfect clarity, on the criteria for a lawyer's independence before EU courts. The decision underscores the need to scrutinise the nature of the relationship between the lawyer and the client, taking into account potential conflicts of interest. As legal practitioners navigate these standards, this case serves as a pivotal reference point in shaping the contours of legal representation within the EU legal framework. The common law approach differing from the civil meaning there may be advantage in using common law (English/Irish lawyers).

The law with regard to lawyer independence is not harmonised, and certain jurisdictions (including the UK and Ireland) recognise that in-house lawyers have sufficient independence from their employers to provide impartial advice and benefit from legal advice privilege. This is an advantage to common law lawyers, who will be able to act where civil law lawyers would be barred from doing so.

Footnotes

1. bonnanwalt Vermögens- und Beteiligungsgesellschaft mbH v European Union Intellectual Property Office (EUIPO) (C‑580/22 P)

2. Commission of the European Communities v Akzo Nobel Chemicals Ltd (C7/04 P (R))

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