Internal investigations - trending now!

14 June 2012

Corporate internal investigations and interest in them from the corporate and legal sector continues to gather pace.  There are several reasons for this.  Firstly, the UK is following its American cousins where the practice is well established. Secondly, prosecuting and regulatory authorities in the UK are increasingly expecting corporates and their advisors to conduct their own investigations under supervision.  Lastly, corporates are seeing investigations as a helpful tool in the context of major management change, as a precursor to litigation or a major business decision.

It is not just criminal investigations specialists who are getting involved.  It is apparent that many investigations will be multi-disciplinary with lawyers and experts covering a range of expertise.  Criminal and employment lawyers often work side by side and public, litigation and corporate lawyers often have a role, the reason why so few investigations can be undertaken by the corporate themselves.

In a recent American case, a company identified an internal compliance failure and instances of fraud.  They immediately brought in their Wall Street Lawyers and a top to bottom internal investigation was advised.  The company agreed but decided to use its own, internal resource, albeit supplemented.

Unfortunately, this did not appease the prosecutor.  The credibility of all internal investigations relies on a substantial degree of independence.  Had the corporation appointed external independent investigators from the outset, it would have likely have been in a stronger position. 

It is not just companies that are making use of independent investigations.  The public sector, including central and local government, now make use of them in appropriate circumstances.  Institutions and charitable incorporations are now under increasing regulatory focus.  They too find themselves requiring external lawyers to conduct investigations on their behalf. 

This week in Boston, a joint seminar of the American Bar Association and the International Association of Young Lawyers (AIJA) takes place entitled  “Hot Issues in Employment Law” .  Unsurprisingly the programme is dominated by the joint conduct of corporate internal investigations by labour and fraud lawyers.  Accordingly, Kingsley Napley partners, Andreas White and Mark Beardsworth, will present at the event.

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