When is a lawyer sufficiently independent?

Before the General Court and the Court of Justice of the EU (‘CJEU’), parties must be represented by a lawyer. Not every lawyer that is formally a lawyer under national law is also a ‘lawyer’ within the meaning of EU law, as the CJEU’s decision in bonnanwalt v EUIPO shows (case C-580/22).

Background

The appellant, bonnanwalt Vermögens- und Beteiligungsgesellschaft mbH (‘bonnanwalt’), filed an application for revocation based on non-use (Art. 58(1)(a) EUTMR) against the EU trade mark ‘tagesschau’. The EUIPO revoked the trade mark to a large extent. Bonnanwalt’s appeal to the Board of Appeal was partially upheld and the trade mark revoked further but not entirely. Bonnanwalt filed an action before the General Court against the Board of Appeal’s decision (case T-83/20).

The General Court dismissed the appeal as inadmissible because bonnanwalt was not considered to be properly represented by a lawyer within the meaning of Art. 51(1) of the Rules of Procedure of the General Court and Art. 19(3),(4) of the Statute of the Court of Justice.

Art. 51(1) Rules of Procedure of the General Court reads:

A party must be represented by an agent or a lawyer in accordance with the provisions of Article 19 of the Statute [of the Court of Justice].

Art. 19(3),(4) of the Statute of the Court of Justice states:

(3) […] parties must be represented by a lawyer.

(4) Only a lawyer authorised to practise before a court of a Member State or of another State which is a party to the Agreement on the European Economic Area may represent or assist a party before the Court.

The General Court found that the lawyer representing bonnanwalt was the only employee of a law firm, which was owned and managed by the managing director of bonnanwalt. In other words, the managing director of the appellant was the same person that owned and managed the law firm representing the appellant.

This led the General Court to hold that bonnanwalt’s lawyer was not sufficiently independent from its client. Since the owner and manager of the lawyer’s employer and the managing director of bonnanwalt were the same person, it could be assumed that this person exerted effective control over the lawyer. The law firm’s and bonnanwalt’s interests were partly aligned, which created the risk that the professional opinions of the lawyer were at least partly influenced by its professional environment.

Bonnanwalt appealed to the CJEU. The CJEU admitted the appeal on 30 January 2023 (see here).

The CJEU’s decision

The CJEU upheld the appeal and annulled the General Court’s judgment.

The term ‘lawyer’ found in the Rules of Procedure and the Statute of the CJEU must be interpreted autonomously and independent of national law.

The objective of the necessity to be represented by a lawyer is above all to protect and defend to the greatest possible extent the client’s interests, acting in full independence and in line with the law, professional rules and codes of conduct.

The requirement of independence of a lawyer has a negative dimension, namely the absence of an employment relationship between the lawyer and its client, and a positive dimension, namely the obligations of professional ethics.

Regarding the negative dimension, the independence must be understood not as the lack of any connection whatsoever between the lawyer and the client, but only of those which have a manifestly detrimental effect on the lawyer’s capacity to carry out the task of defending the client while acting in the client’s interests to the greatest possible extent, in line with the law and professional rules and codes of conduct.

The Court presumed that a lawyer working in a firm as an employee is as independent as a lawyer practising individually or as a partner in the firm. Nevertheless, there are limits to this presumption of independence. For instance, an associate lawyer may not represent a partner of the law firm that the associate lawyer works for, because the partner is likely to exercise effective control over the associate.

The CJEU considered the situation in the present case to be different. Due to the lack of a direct relationship between the lawyer and bonnanwalt, there are not sufficient indications that the lawyer acted under the control of the managing director of bonnanwalt/the owner of the lawyer’s employer.

Comment

Since this Kat is rather curious (fortunately ‘curiosity killed the cat’ but not the IP GuestKat), he checked the commercial register and it turns out that the managing director of bonnanwalt is also the company’s sole shareholder. Also, the address of bonnanwalt and the law firm, which employs bonnanwalt’s lawyer are the same. These facts are neither mentioned in the General Court’s nor the CJEU’s decision but they seem to be crucial:

If the CJEU considers a lawyer not to be sufficiently independent where the lawyer represents a partner of the law firm, should the same not also apply where the lawyer represents a company fully owned and managed by that partner? It does not seem to make a difference whether the partner is represented or the partner’s own company. It is of course a separate legal entity, but the company’s interests are identical to the partner’s interests.

Even if the owner of bonnanwalt was not identical to the lawyer’s employer, it seems quite strange to consider the lawyer sufficiently independent. As the name suggests, the task of a managing director is to manage the company. While a managing director may be subject to the control and instructions of the company’s shareholder(s), the director’s interests are usually aligned with the interests of the company. The lawyer is engaged by and takes instructions from the same person that employs the lawyer and may exercise direct control over the lawyer’s work.

But Luxemburgum locuta, causa finita.
 

The picture was created with Craiyon.