It’s no secret that the UK is faced with a huge fraud problem. Economic crime is thought to cost the UK as a whole up to £350bn a year and fraud accounts for 40% of all reported crime. National reporting service Action Fraud handled around a million contacts last year, representing reported losses of more than £2.3billion.
The past few months have seen the release of two important government documents: the second plan against economic crimewhich allocates £400 million of funding to this area over the next three years, and a new anti-fraud strategy which details how fraud will be tackled through more resources for law enforcement and the criminal justice system, better reporting and monitoring of fraud, new technologies and enhanced cooperation with the private sector. Targeting scammers, holding tech platforms accountable and ensuring that the tech sector is not an enabler of fraud will all receive close government attention.
While there are valid questions being asked about the resources of UK enforcement agencies, these bodies (which include the Serious Fraud Office, the National Crime Agency and the Financial Conduct Authority as well as the police) have been invested considerable powers to investigate fraud and crime.
For any business and its staff, the impact of a police fraud investigation can be significant and can include reputational damage, employment law issues and the risk of civil litigation, as well as financial repercussions. This may be the case even when the investigation does not ultimately result in a criminal charge or regulatory conclusion.
So how can members of a business ensure that their business is better protected in this scenario? There are a number of key points to keep in mind:
1. Get a lawyer: From the moment an investigation begins, there are many vital decisions to be made, all with significant legal consequences. Getting sound, pragmatic legal advice from an experienced specialist lawyer at an early stage will inevitably save you time, money and heartache later. A lawyer will act as an important professional intermediary – allowing for smoother communications with the investigator – and will help ensure “equality of arms” where your company might otherwise feel discouraged from dealing with a state agent.
By using a solicitor, your business can also ensure that all relevant communications relating to the provision of legal advice are protected by legal professional secrecy (LPP), one of the most important protections in English law. When the LPP applies to a document, it can legally be withheld by an enforcement agency (or an opponent in litigation).
2. Make privacy a priority: In order to ensure the preservation of the LPP as well as to limit collateral damage (both internal and external to a company) due to information leaks, communications relating to an investigation must remain strictly confidential. Taking steps such as using a project codename, keeping the “circle of acquaintances” as small as possible, and using secure communication methods will all help. Because of the expertise they possess, experienced IT professionals are often part of the inner circle of an investigation and all IT staff should be well trained to understand their confidentiality obligations.
3. Consider retaining evidence: When relevant items are altered or destroyed before the investigator can retrieve them, it could harm a police investigation – at best, it could harm your company’s relationship with the investigative body; at worst, it could result in criminal charges. One of the first big decisions will be what material is relevant, where it is and how to keep it. Steps should be taken to suspend document destruction policies and, where appropriate, issue notices of suspension to relevant data custodians. Another important task, usually the responsibility of trusted IT personnel, will be to ensure that electronic material relating to investigation subjects or witnesses is preserved by imaging and backing up email accounts and file repositories. .
4. Liaison with authorities: In many cases, it will be in your company’s interest to cooperate fully and voluntarily with the authorities when it comes to providing information; it can help prevent law enforcement from using some of their more disruptive powers. But the relevant business considerations are very nuanced. For example, it is essential to ensure that all avenues of liability and associated risks to the business are fully understood. The timing, nature and manner of communications can often tip the scales, and legal representation is crucial here.
5. Don’t forget about data privacy issues: Data Privacy is a particularly complex area of law, with many competing interests to balance. At all stages of an investigation, there is a good chance that your company will be involved in the processing of personal data, which may be sensitive. You may be asked – or required – to transfer data to an external party. Conducting a proper data privacy impact assessment is a recommended first step that allows your business to understand and assess its risks in this area and forms part of an audit trail of actions taken. during the survey lifecycle.
Caroline Day is a partner and Phil Taylor is a professional support attorney with the law firm’s criminal litigation team. Kingsley Napley LLP.