So, it’s the start of an investigation.  Perhaps your firm or organisation has identified a potential issue through regular Compliance monitoring, a whistleblower has raised concerns about the operation of a business line/product or practice, a regulator has asked you some questions about your business, or a general issue has been identified in relation to a market in which you operate - all of which have prompted you to determine that you need to undertake some sort of investigation.  But now what?  In this blog, Samantha Paul in BCLP’s Global Investigations Practice, and formerly in-house Legal managing investigations at a major international bank, outlines the 10 key things you should consider when faced with a new investigation and how BCLP’s new offering, Clear/Cut, can help bring clarity to, and streamline, your investigations.

There are a huge number of things to consider at the start of an investigation.  At times it can seem overwhelming.  What are some of the key questions you should be asking yourself?

  1. Who should be involved in the investigation from your business?  Typically, this would include members of your Legal, Compliance, HR and (as relevant) Investigation teams, together with experts from the relevant business area, Information Technology/Operations team and your Press / Communications team.  You may also want to involve Risk, Audit and Finance depending on the particular circumstances.  Depending on the issues under investigation, you might need to involve people in different locations and assemble a cross-border team.
  2. Are there any potential conflicts - actual or apparent - that might impact on the team you assemble and how you handle the investigation?  It is important that the investigation is free from the taint of any conflict, or perceived risk of conflict.  This might mean that certain areas of the business or people cannot be a part of the investigation team.
  3. Would the investigation benefit from external assistance?  A law firm such as BCLP is highly skilled in handling investigations for our clients, and can provide invaluable guidance at the early stages of the investigation and going forward.  You may also want to consider other external experts depending on the investigation, including accounting, forensic or market experts.
  4. Do you need, or want, to report the issue to a regulator(s)?  There may be specific regulatory reporting requirements at play that requires you to report even a potential issue under investigation.  In the UK, the Financial Conduct Authority and Prudential Regulatory Authority both expect regulated firms to consider whether issues are something of which they would expect knowledge and, if so, to report to them.  Even if there are no reporting obligations, you may want to consider a voluntary or tactical disclosure.  If the matters involve competition or anti-trust concerns, you should carefully consider a so-called leniency application to the relevant authorities.
  5. What evidence might be relevant to the investigation?  It is important to consider this question upfront and take steps to put in place steps via your IT/Operations team to suspend document deletion and preserve all potentially relevant documents.  Further, as relevant and assuming there is no risk of “tipping off” in an investigation with criminal aspects, you should also put certain employees on notice of their personal obligation to preserve all documents (electronic and physical) via a so-called Legal Hold Notice.  Once this has been done, you may relatively quickly want to start the actual processes to recover documents, as this can be a time-consuming process.
  6. Should you consider putting in place a communications protocol for those involved in the investigation?  This is particularly important given the ease and speed with which electronic communications can be, and are typically, created during investigations.  A protocol can help maintain control over the communication flow and, as such, ensure the preservation of privilege and confidentiality in the communications.  For an update on the current status of privilege in investigations in the UK following the Court of Appeal’s decision in SFO v ENRC, please see our previous article here.
  7. Are there any specific employment or personnel related considerations?  If the investigation was triggered by a whistleblower, there will likely be employment considerations, including the whistleblowers’ right to protection against retaliation and, as relevant, anonymity.  There may also be more general employment related issues for consideration.  Investigations can be very stressful for those employees involved, particularly if they are subject to investigation, and require time over and above the employees’ “day job”, which may need careful handling.
  8. Do you need to take any immediate steps to “stem the bleeding”?  If the issue is potentially ongoing, are there any immediate remediation measures that you should take?  Or are there any immediate “lessons learned” that you can adopt to prevent any further similar issues?  Regulators and affected parties are likely to expect such steps to be taken promptly, and it is good business practice to do this in any event.
  9. Are there any others interested parties to whom you need to report?  You may want to consider notifying your insurers, as this could be an insured event or trigger cover under directors and officers (D&O) liability insurance.  In addition, do you need to report any matters to the market, if you are a listed company?  Or perhaps you should consider notifying customers (for example, in the event of a fraud or cyber breach).
  10. What should your initial investigation steps be?   At this stage, having taken the above nine steps, you are in good shape, but it is now critical to determine a realistic and achievable initial investigation plan that will provide you with a good handle on the issues under investigation and the necessary next steps.

Before you despair given the enormity of the task at hand, don’t.  This is where BCLP and Clear/Cut may be able to help.  BCLP’s unique offering, Clear/Cut, combines expert legal knowledge from the lawyers within our Global Investigations Practice and across the wider firm, with leading forensic capability and technology, to quickly and efficiently undertake targeted analysis of tens of thousands of documents and provide you with a succinct report on the issues and next steps.  And it does all of this within 14 days of getting the relevant data for review and for a competitive, fixed fee.  Further information on Clear/Cut is available here.

In some investigations I have been involved in during my careers, this early clarity, following a robust and defensible process, would have been sufficient to determine that no further investigation was needed.  Or at least that only limited further steps were necessary before the issue could be closed.  In other investigations, this early evaluation would have provided much-needed clarity on how the next steps in the investigation should be scoped and an informed, staged investigation plan drawn up.  This could also have provided much needed clarity to the regulators, to give them confidence that the firm had a firm handle on the issues under investigation and was proactively determining next steps.

What is absolutely clear to me is that Clear/Cut would have proven utterly invaluable when handling investigations.  I, or any member of the Clear/Cut team listed here, would be delighted to discuss how Clear/Cut could assist you with your investigations.  Please get in touch to discuss your requirements.

This document provides a general summary and is for information/educational purposes only. It is not intended to be comprehensive, nor does it constitute legal advice. Specific legal advice should always be sought before taking or refraining from taking any action.