A dawn raid by the UK or EU regulatory authorities can be an unwelcome surprise, particularly if your business is not fully briefed on how to react. Lawyers in our Commercial Team consider how best you can prepare for an event of this nature.
The golden rule from the outset is to ensure that you and your staff respond calmly and appropriately to the unexpected arrival of regulatory officials (including at worst police officers if it involves a criminal investigation, or court officers/lawyers if it involves the enforcement of a private search order). For a raid by the regulatory authorities, ensure that your “front desk”/reception staff remain polite and courteous at all times, contact senior management immediately, remain hospitable (for example by offering coffee and biscuits, preferably in a side room) and generally remain constructive while doing or saying nothing which may serve to incriminate either themselves or the business.
Generally, investigation teams will wait for the arrival of in-house Counsel/lawyers (in conjunction with senior management), however may not wait for external lawyers, so anything which can be done to keep officials happy while external lawyers are also contacted and summoned, would be ideal. The more legal expertise present during the raid, the better the firm’s chances of responding appropriately and effectively. Ensure that the front desk/reception has a list of key contact names to immediately call (both internal and external) in the event of a raid.
Ensure also that appropriate ID/authorisation for the raid is presented by the investigation team (a warrant if it involves the police, a copy of the court’s search order from the supervising solicitor if a privately instigated search, or appropriate evidence of ID and authorisation if it is a regulatory body), before they are allowed to take any further action.
Commencement of the Investigation
The officials may commence their investigation at any time (despite any attempts to delay pending the arrival of external lawyers) and request access to offices, files, computers and documents. These should only be permitted to the extent they are compatible with the scope of their authorisation.
Ensure that a written record is kept of everything they request access to.
Appoint a senior member of management (or advising lawyer) to act as the direct liaison person with the senior member of the investigation team and ideally designate advising lawyers (or other senior members of staff if not enough lawyers are present) to shadow the members of the team as they search your offices (and to take a written note of everything which the investigating officials have access to and/or copy).
Be constructive by offering a central base/room for the team to operate from (including access to a photocopier) and keep the refreshments supplied. Ensure staff are co-operative, but should be instructed to say no more than is necessary to facilitate the authorised search of documents. If they have any concerns, or find themselves being asked questions beyond that remit (or about which they feel uncomfortable) they should immediately consult one of the advising lawyers present (whether internal or external).
Briefing of Staff
Staff should be informed promptly that an investigation is taking place and be instructed (upon threat of discipline) not to speak to competitors or to the press.
They should also be ordered not to shred any documents (even if innocently, as this could be misconstrued) or delete emails (investigating officials may be able to read deleted emails anyway and arguably innocent behaviour could in itself become unnecessarily self-incriminating if carried out in these circumstances).
Staff should be told not to volunteer any additional information to investigators (without speaking to a legal advisor first) and not to make any remarks that could be misinterpreted.
A written record should be kept by advising lawyers of any conversations between officials and staff (preferably signed in agreement of its contents by both).
Special requests may be made of senior management (for example for complete “images” of their hard drives). These should be co-operated with, although not without first consulting legal advisers.
If there is any danger of there being a conflict between the activities of individual members of staff/ management and the firm itself, you should consider organising separate legal representation for the individuals concerned.
Usually, the investigation team will ask to deal with the firm’s IT manager, which should be permitted with a lawyer present at all times.
Very often investigating officials will come with a pre-planned list of “keywords” which they intend to search on the firm’s IT systems. You should request a written record of the keywords used (or ask the IT manager present to write down all keywords searched against). These will become invaluable later when carrying out a de-brief on the conduct of the raid (and ascertaining what future course of action should be undertaken to pre-empt any further action by the authorities).
If feasibly practical, you should ask your IT team to set up a “mirror-image” computer so that a lawyer can watch exactly what is being searched by the officials (to allow them to object to the viewing/copying of any privileged material, as discussed further below).
Essentially, any communications between, at the very minimum, external Counsel/lawyers and the firm (particularly if they relate to the firm’s “rights of defence”) will be subject to legal privilege and it will be the role of the lawyers present or any other management who may be overseeing the activities of the investigators, to ensure that privileged documents and emails are not viewed, copied or retained by the authorities.
In a competition law investigation being carried out by or in conjunction with the European Commission, this may potentially not apply to communications with in-house Counsel (although the advising lawyers should decide from the outset whether they wish to argue against this and request written confirmation of authorisation for the officials involved to obtain these communications).
For investigations by the OFT alone or any other regulatory bodies, privilege should be asserted for communications with even in-house Counsel.
Access to Premises
If the investigation team is likely to want to return the following day, ensure that the office premises are kept secure overnight and that no unauthorised access is permitted to any person (including staff). Order any cleaners not to attend the premises on that evening. If necessary, employ a security guard to keep watch.
In 2008, Eon was fined €38million after being found strictly liable for the breach of a European Commission seal during the course of a dawn raid (despite arguments being put forward seeking to explain why this may have been unintentional).
As soon as feasibly possible after the raid is over, all records of documents taken, copied or viewed (including emails) should be collated and accessed and the documents/emails in question reviewed by lawyers for offending or incriminating material.
All searches carried out by the officials on the IT systems should be repeated using the search-words used.
At this point, time becomes critical and it is vital for an assessment to be made as quickly as possible by advising lawyers as to the strengths of any case which the authorities may have against the firm.
This will allow advisers to decide upon the most appropriate form of action to take in the circumstances (including submitting an application for leniency if deemed relevant).
An unexpected dawn raid can be a traumatic experience, both for the firm involved and its staff. Having a pre-planned policy in place on how to deal with a dawn raid (and the training of staff on how to follow that policy) may be critical to a business’s chances of successfully defending against a resulting regulatory investigation (and for the avoidance of any further unnecessary self-incrimination during the raid itself). The conduct of occasional “mock dawn raids” may assist in the training and preparation of staff (although care should be taken not to cause undue alarm to staff, or allow misleading information to be leaked to the press).
Given the importance of responding properly during the raid (and in assessing what to do after the raid has taken place) it is also vital to have as much legal support as possible present both during and after the raid.
If you would like any further advice on formulating a “dawn raid policy” for your business, or on conducting “mock dawn raids”, or on how to deal with any other competition law or regulatory issue or investigation, please contact Mark O'Shea by emailing Mark or by calling him on 08450 990045, or speak to your usual contact in the Commerce and Technology team.
This document is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from taking any action as a result of the contents of this document.