Jennifer Millins, Partner
Mishcon de Reya
So, hello everyone, thank you for joining us. I know there’s a few people who will still be just dropping into the session now. We will get started, it’s a short 25 minute webinar and we’re keen to make the most of every moment that we have. So, welcome everybody to the latest in Mishcon’s series of Disputes Nightmare Scenarios, where we provide practical insights and share our experiences on some common dispute nightmares that you may be coming across in your, in your businesses and your practices. With this session, Mishcon are delighted to be collaborating with and joined by FTI Consulting and so thank you very much to them for their collaboration. I would say, as we’re still waiting for a few final people to join, if you have any questions during this session, please do send them to us using the Q&A function that you will see on your screen. As I say, it’s a very short session so, we will try to take questions at the end if we can, to the extent that if we aren’t able to get to your question or if you have any questions or anything you would like to discuss that relates this session, please do get in touch with us separately or after the session, we’ll be delighted to chat further with you. So, to introduce what we’re going to be talking about today, the topic for discussion is what you would do if a member of your Board was accused of sexual harassment. Now, I’m not, we are not specific here on, on, on the, where the accusation comes from but in our scenario, our accuser is a more junior, female employee and the member of the Board is a male employee, but of course it doesn’t always happen that way. I’ll introduce the scenario in a little bit more detail but before I do so, I’d like to introduce myself and my fellow panel members. My name is Jennifer Millins, I’m a Partner in the Employment team here at Mishcon de Reya. I’m joined by Bella, who I’d like to intro… invite to introduce herself now.
Bella von Bohlen, Leader
Crisis and Litigation Communications, FTI Consulting
Thanks, Jennifer. I’m Bella von Bohlen, I’m a Leader in the Crisis and Litigation Communications Team at FTI Consulting in London. We advise clients in how to manage reputational risk and protect brand value at times of crisis and we are seeing more of this sort of scenario crop up, or certainly we’re seeing that our clients are concerned about it cropping up for them.
Jennifer Millins, Partner
Mishcon de Reya
Thank you, Bella. And Nick, may I ask you to introduce yourself please.
Nick Dent, Partner
Mishcon de Reya
Thank you, Jennifer. I’m Nick Dent, I’m a Partner in the White Collar Crime & Investigations department at Mishcon. My practice is focussed on representing individuals who are the subject of criminal allegations.
Jennifer Millins, Partner
Mishcon de Reya
Thank you. So, to kick off with the scenario so, so, you have received a serious allegation of sexual harassment which, from a member of staff, a more junior member of staff against one of your Board members. It has come in in the form of let’s say, an email to the HR Director, which often tends to be where these things are directed, but it has quickly come to the attention of the Board and of course to you as an advisor to and support for the Board, yeah, and the question is sort of what do you do as a first stage. So, we’re looking at the immediate aftermath of the complaint being raised. So far, it has been raised with the HR Director, it has come to the attention of the rest of the Board. Bella, from your perspective, there’s obviously a serious allegation here and, and some potential for some really adverse publicity to come out of this. What would you do as a first stage or what would you be advising that Board to do?
Bella von Bohlen, Leader
Crisis and Litigation Communications, FTI Consulting
So, the first comment I’d make is that from a reputational perspective, unfortunately the media just adore these sorts of stories, senior level misconduct, and if a story like this got leaked and picked up, they just tend to run and run and it’s important to consider the way they are reported because they are reported in two parts. Firstly, it’s the alleged conduct itself and then secondly and crucially, it’s the way the company responded. So, when we come in to advise, the very first thing we’re thinking of is that response and making sure that we’re doing absolutely everything that we possibly can to, you know, work with our colleagues in the legal team, work with HR, ensure that we’re protecting the individuals but also, managing that reputational piece. So there are two first things that we’d do at Hour Zero. First of all, we have to come up with a holding line. Now, we wouldn’t be doing anything proactive at this point because we just simply don’t know enough and we always have to have in mind leak risk and if we are contacted for comment, we want to have a position, there’ll be an expectation that we’d have a position and it would be something very generic and it could be as simple as, “We are aware of this and we are doing something about it” and that, that thing will be presumably, an investigation, which Jennifer will go on to talk about later. But I think you would want definitely to have something to say beyond, “The company declined to comment.” And then you would need to immediately start thinking about your stakeholders so, going through that exercise of who will be interested in this? Who needs to know about this? What do they need to know and when? Again, far too early to be proactive but you need to start thinking that through. When people think about comms, they immediately think of the media. The media will always be a stakeholder but it will be by no means the only stakeholder nor the most important, so you need to start thinking, you know, about your internal audience, that’s particularly important because there may already be rumours circulating about this particularly if it happened at a work event, as they so often do and but you’ll also be thinking about commercial partners, investors, do you have a parent company that might want to know about this? And the risk you are looking to manage at this stage is that the situation has leaked and picked up in the media, there are some really ugly headlines and you have some critical stakeholders who pick up the phone to you and say, “Why on earth didn’t you, didn’t you tell us about this?” So, you’re starting to map that all out and work out where the main risks lie.
Jennifer Millins, Partner
Mishcon de Reya
I think, I think that’s absolutely right I think Bella and I came to you first on that because I think that risk of a leak that you described could happen at any time. I think the, the second thing you’re going to be wanting to think about and it will probably run in parallel to this is, what do you do next with the allegation? You obviously need to do something with it internally and that will feed into and underpin a lot of I think what we’re talking about today, that investigation that’s going to go and to proceed from this stage on. Now, you do not have to make an absolutely immediate decision about how you handle the investigation but it will, it will inform a lot of what you do. So, as an immediate first step before you launch into an investigation of the allegations, you really need to think about a number of things. One, you need to dig out your policies and procedures, that’s a first step, it’s not though the be all and end all and slavishly following your procedures might not get you where you want to be so, you will have a grievance procedure, you will need to at least follow the main text of that procedure. You will need to consider whether or not to suspend the Board member in question and that is often a very difficult decision. You don’t know how long this investigation is going to go on for, how long that person is going to be out of the business and of course, the internal comms, if not the external comms around that, Bella, I’m sure are things to think about as well because that will need to coincide with anything that you, you know, the way you respond to a bigger, a bigger leak so, “where is this person?” is a question that absolutely needs a cogent response and one that be updated regularly.
I think the next thing from perspective to say is that you will need to think very carefully about who is told about these allegations. You’re going to need to protect to the extent possible, the confidentiality of the complainant, the allegations are serious, they’re very sensitive. But similarly, confidentiality is important for the accused. You don’t know until you’ve conducted your investigation, whether there is truth in the allegations or not and the reputation of that Board member is also of paramount importance. So, balancing those competing interests is difficult and it is also of course, as I’m sure a number of you will know from having looked into these matters in the past, very difficult to investigate thoroughly an allegation of this nature without revealing the identity of the complainant and I would say it’s pretty much impossible in this case but, you know, whether and to what extent there are witnesses, what they get told about the allegations, what they are, yeah, how much they are drawn into the, the fact pattern in order to get their sort of testimonies here, is something that needs to be also kept under close review. So, but keeping the pool of people, the team of people that are involved in the immediate aftermath of this is really important both in terms of who is thinking about comms and liaising on the comms but also, who is thinking about how the investigation is structured. So, I think those are the immediate sort of Hour Zero points from me but Nick, you know, this is an allegation that is sufficiently serious to, to, to be potentially a criminal offence, certainly from where I’m sitting. Do we need to think about that at this stage?
Nick Dent, Partner
Mishcon de Reya
Yes. So, from a criminal point of view, it’s important at a very early stage of the investigation for those representing both employers and individuals to carefully analyse the nature of the conduct in question. Sexual harassment is a term which could mean behaviour which is solely consistent with an employment or disciplinary issue. Alternatively, sexual harassment can include behaviour which also amounts to a criminal offence and if the conduct is capable of amounting to a criminal offence. then in my view, it’s crucial that the accused receives independent legal advice from a criminal lawyer before they engage with the investigation. A criminal lawyer, sorry, go ahead, yeah.
Jennifer Millins, Partner
Mishcon de Reya
No, I was always, I always jump in at this stage because I, I have a, an innate sort of nervousness about involving external, other lawyers in, in, for either the complainant or the accused at this early stage because it all, it tends to hinder the ability of the business to, to investigate freely and, and to shape that investigation as it wishes to do so. So, I think there’s a tension there that, that always needs to be balanced but, but carry on, Nick.
Nick Dent, Partner
Mishcon de Reya
It, it’s very likely that a criminal lawyer will approach an employment investigation in a very different way to an employment lawyer. That different approach can lead to attention because of the kind of conflict of advice but it’s often a resolvable tension when the lawyers work in a collaborative manner. Broadly, criminal lawyers would be reluctant to advise their clients to put forward an account in any investigation or interview until they have received adequate disclosure as to the nature of the allegations that are against them. They would also generally wish to understand whether a complaint had been made to the police before they engage with the investigation in any meaningful way.
Jennifer Millins, Partner
Mishcon de Reya
Yeah, and we could back I think to that, that element of police involvement because I think that can be, can be important and certainly something that, that we get asked frequently in terms of, you know, should we go to the police. But, but, but we, we touch on that in a sort of a, from the wider perspective, I think at this stage we are, we know it’s a serious allegation, we know that it potentially has criminal consequences so, we are looking at an investigation that is as thorough as it can be but it’s also because of the nature of the allegations and the person involved, the people involved, very sensitive so, one thing that you will often want to consider at this stage is whether there as anyone internal that is appropriate to carry out the investigation, you know, can you, do you have someone who is capable of managing and navigating the sensitivities and the confidentiality and also, you know, potentially finding some very difficult evidence that incriminates one of the Board members, one of the most senior people in the organisation and that’s always very difficult so, so, for all of those reasons, often businesses will at this stage think about getting an external, third party involved to do the investigation. Bella.
Bella von Bohlen, Leader
Crisis and Litigation Communications, FTI Consulting
Yeah, Jennifer, I was going to ask about that because when we are messaging around an investigation, it’s always very useful to be able to say it’s independent and as I said before, you’re going to want your message at the beginning will be generic and will be, “We’re aware of this and we’re doing something about it” and an investigation is really helpful because of course you want to point to what it is that you’re doing and in fact, there was an article in the FT a couple of weekends ago saying that internal investigations aren’t necessarily worth the paper they are written on because they are such sort of intrinsic conflict there with working together, you’re both, both, you will care about you know the reputation of the company and as we know, these situations of mismanage can be existential. So, I just wondered what you think about that question between internal versus external?
Jennifer Millins, Partner
Mishcon de Reya
I think a lot of it is presentational. Ultimately, it is still the company who is instructing an external third party to an investigation but what it does do is, it gives at least, it gives certainly the appearance of, or an arm’s length investigation of something that’s more independent, of something that is, you know, more along the lines of an inquiry into what’s happened rather than a, you know, someone internally just asking people what they saw and what they heard and, and, and experience was. But ultimately really, that is only, that is all they are doing and so from my perspective, the meaningful difference is the, that what, is, as I said before, it’s navigating the sensitivities, it’s, it’s ensuring that you have someone who is capable of, of digging into and digging up potentially concerning evidence about someone who is very senior in the organisation and you potentially can influence, you know, their career going forward. So, so, I think that, that’s the key thing that I, but I, I see it often used and very positively in the messaging in both internally and externally about what a business is doing in these circumstances to be able to say we have an external third party, we have an experienced HR consultant, we have a, a KC who is on, you know…
Bella von Bohlen, Leader
Crisis and Litigation Communications, FTI Consulting
Exactly. And, and, I mean I think, again, one of the challenges, one of the main communications challenges is that you’re expected to take a position before you know anything, you know, and it’s really difficult for companies and frankly, an investigation buys people time because it’s, people understand, you know, internally and externally that it’s totally inappropriate to ask people to divulge specifics when there’s a live investigation so, we find it’s very, very helpful to say that we’re aware of this, we’re taking it very seriously and to that end, we’ve commissioned an external, independent investigation and then there’s a little bit of breathing space to work out exactly what’s gone on.
Jennifer Millins, Partner
Mishcon de Reya
Yeah, I think that’s right and of course, as the business, you’re still in charge of the, in controlling the scope of the investigation. You don’t just let somebody come into your business and have free rein, yeah, you have some control over that. But Nick, what do we need to be thinking about if we’re trying to put together a sort of terms of reference for an investigation and thinking about how we manage that, from your perspective. This is obviously, you know, what’s going to happen to this investigation report if, if there’s a, if this is a criminal allegation or, or, or indeed trial.
Nick Dent, Partner
Mishcon de Reya
If the police become involved then that potentially becomes disclosable to the police and if the matter progresses beyond just an investigation but to a criminal charge and a trial further down the line, then there’s a good chance it will end up being disclosed in court and evidence being used either by the prosecution or the defence so, it’s worth employers having a, an understanding and expectation that that could happen perhaps years down the line when they’re setting up the investigation in the first place.
Jennifer Millins, Partner
Mishcon de Reya
Yeah, and it goes back to Bella’s point about just not knowing what, what’s going to happen beyond the initial kind of 24 hours where we are the moment in terms of, you know, where, where this is going to be used. Something that often comes up and that Nick and I tend to have a healthy debate about is the issue of privilege here so, so, whether and to what extent the, the investigation or at least part of the investigation could be privileged, by which I mean not disclosable in any subsequent litigation. I and a lot of fellow employment practitioners think it’s quite difficult to assert privilege over an investigation report or the work product that comes out of that investigation report because it’s not being done normally for the purposes of, of, of receiving legal, of giving and receiving legal advice, it is, it is much more about a factfinding mission from, from which from my perspective will then inform a company’s decision of whether or not to take disciplinary action. But Nick, I think you, you will come from it from a slightly different perspective.
Nick Dent, Partner
Mishcon de Reya
I’d agree, it’s a very difficult decision for employers to make at the start of an investigation and it’s a strategic decision do they want to try and maintain the confidence over the investigation, the product of the investigation and the outcome but in reality, it’s very hard to maintain that and there’s often going to be somebody trying to pick away at the privileged nature of it so, there is a way to do it possibly, with difficulty, and then some thought needs to be given about the practical realities of that and perhaps the reputational impact of privilege not being maintained over it.
Jennifer Millins, Partner
Mishcon de Reya
Yeah, I think there is also then the, the, goes back to the question of what’s going to happen to this report and what do we want to use it for because from where I’m sitting, I want to be able to use it as a justification for potentially starting disciplinary action against a Board member or for saying to the complainant, “We have found absolutely no case to answer here. There is going to be no disciplinary action” and Bella, of course, if you want to talk about an investigation in the public…
Bella von Bohlen, Leader
Crisis and Litigation Communications, FTI Consulting
Yeah, just quickly on that, it’s, it’s very important when you commission an investigation what you say about that investigation to your stakeholders so, don’t promise people that you will share the findings of that report. You might say that you could share a summary or something like that but be very careful because once that report comes in, you’re stuck with it and if you’ve told everyone and you know and their uncle that you’re going to share the findings then, you know, that could end up being awkward. But perhaps I could just take a minute to talk about, you know, if, if there’s a leak and how you then manage that when you do have to start talking because there are a few principles that it might be, it might be worthwhile just thinking about. And the first is, so obviously you’re going back to that stakeholder map and you’re considering who you need to talk to but you also need to think about how. So, let’s say your HR department comes and said look, the employees, they’ve started talking about this and we’re getting inbound enquiries or perhaps you’ve suspended the individual so, it’s out internally. What do you then do? Is it an All Staff email? Is it a town hall? Give some thought to what could be forwarded on. Give some thought to what could be recorded and shared and again, you know, you would typically be staying quite high level at this stage, you know, “We’re aware of this, we’re doing something about it” and please direct any enquires to xx.” That’s really useful because you don’t want employees being contacted by, by, you know, the press and giving their version of events so, giving your employees somewhere to direct enquiries on is, is very helpful. Also, think about cadence. Once you start, start talking, don’t set up an expectation that you will be sharing a blow by blow account of this so, just be very careful about that. And then also, and this is really important, think about your commercial context. What else do you have going on? Is there a big product launch? Are you fielding executives for interviews? We recently had a client who, that was the defendant in, in a trial, accused of quite embarrassing conduct. Day One of trial coincided with the announcement of a huge, new brand sponsorship deal. Similarly, we had a client in crisis and that coincided with the announcement of a merger so, do you need to pause other, external comms while you’re managing all of this?
Jennifer Millins, Partner
Mishcon de Reya
Thanks Bella. Nick, something I often get asked and will defer to you on is, should we as a business inform the police if we think this is serious?
Nick Dent, Partner
Mishcon de Reya
Good question. So, generally, there’s no hard and fast rule but generally, if the business is aware that a report has already been to the police then it’s good practice to contact the police force, if possible, the investigating officer and find out whether they have any objection to the investigation being commenced and progressing. If no report has been made then there is no obligation on the employer to try and contact every police force in England and Wales to find out whether there is an investigation so, that’s, it’s just a feel about the circumstance really rather than any particular guidance.
Jennifer Millins, Partner
Mishcon de Reya
Thank you. But you wouldn’t normally be advising our client to report it to the, proactively report it to the police?
Nick Dent, Partner
Mishcon de Reya
No. there’s no legal obligation on most employers to do so. There are some exceptions where there’s perhaps a safeguarding issue, depending on the nature of the business, but generally speaking there’s no requirement to do so.
Jennifer Millins, Partner
Mishcon de Reya
Brilliant, thank you. And so just looking at sort of the, the casting our, our, our thoughts a little bit ahead, you know, from my perspective, coming out of the first sort of 24/48 hours that we’ve just been talking about, what I’m looking at is, whether there’s disciplinary action to be taken against the complainant, whether the, the, the grievances are upheld or not. What we do with the, the individual to protect that individual if the allegations have been well-founded to the complainant and then of course what to do with the ongoing employment of that Board member and whether and to what extent they remain within the business. That, all of those considerations could lead to employment tribunal litigation for, for me, and Nick, for you, where do you sort of see this going if it runs?
Nick Dent, Partner
Mishcon de Reya
For me then, there’s the police investigation and trying to persuade the police not to charge the accused. If the accused is charged then the trial proceedings start and that’s when the kind of disclosure issues become paramount in preparing a case for trial and then trying to get the, the helpful documents from an employment investigation which might be used to undermine the prosecution’s case or assist the defendant’s case.
Jennifer Millins, Partner
Mishcon de Reya
Thank you. I’ve got some, some questions here. I just want to ask each of you, Nick and Bella, to give us a couple of top tips of, you know, in a sort of ten seconds each and then I’d like to just, just take some of the questions that we’ve had here.
Bella von Bohlen, Leader
Crisis and Litigation Communications, FTI Consulting
Okay, from me, I’d say be prepared, think about this now before it happens and you’re in the eye of, in the eye of the storm and put your people first. Increasingly, we are finding that employees are really expecting their employers to act in a way that’s ethical and transparent so, keep them close.
Jennifer Millins, Partner
Mishcon de Reya
Nick.
Nick Dent, Partner
Mishcon de Reya
For me, I’d say think about the long term. Perhaps how this might look years down the line rather than just the here and now at the start of the investigation.
Jennifer Millins, Partner
Mishcon de Reya
Yeah, I think that’s absolutely right and I think, I, I would echo all of those and say yeah, act quickly as it is a real, really important to act quickly is really important to and to really consider confidentiality in all its forms, would be my two top tips. We’ve got, thank you to my panellists, we’ve got a, a question from Nathalie Bream and she asks, “The, the conflict of allowing or encouraging a Board member to criminal advice is really hard as internally, we would want to investigate fully and take appropriate action but it seems that they could hide behind the criminal advice.” What’s your thought on that, Nick?
Nick Dent, Partner
Mishcon de Reya
For the accused point of view it’s really important that they’re able to gain advice on where they stand to be able to prepare properly for any interview that might happen and give some thought to what a response might be to an investigation because they have to understand that whatever they say in an investigation might well end up in the hands of the police and the CPS much further down the lines so, they should normally want to sort of front load their advice and find out where they might stand before they commit anything.
Jennifer Millins, Partner
Mishcon de Reya
But I’m very much with Nathalie, that if I want to get on with this investigation then it is unhelpful for me to have a, a lawyer interjecting for the, for the accused and saying actually, hang on a minute, we need x, y and z before we can answer any of your questions because this is our employee and we have to, to, to be seen to be acting reasonably and swiftly to assess the allegations and to, we obviously have the other side that though, which is to deal with the complainant and, and protect, protect that individual and swift action there is obviously super important. So, so, I would be taking a robust view from the company’s perspective of trying to push that through and, and, and you know, and using any failure to respond to questions or turn up for interviews or, or against the individual complainant because you can’t otherwise progress with what you need to do from the employment perspective if you’ve got a, you know, the, those legal sort of hurdles coming from the, from the accused but it is a difficult balancing act. Obviously, an individual who is accused of this sort of misconduct at any disciplinary hearing would have the right to be accompanied but that right does not extend to, to the right to have a lawyer in the room from an employment law perspective, it’s, it’s a colleague or a trade union representative.
I’ve got one final question about reports to the regulators, assuming that the employer is regulated in some capacity and a Board member and is in that regulated role. The answer will depend on the regulator, I mean if we’re talking about financial services then you, you will have various obligations that arise pretty early on in this process and you would want to be thinking about whether and to what extent you need to report but, but the answer is nuanced and it will depend, for example, if you suspend the Board member, from a financial services regulator perspective, you will likely have an obligation to inform the FCA straight away so, it will depend what you do and at what point you have findings and things that, that will, you know, that you need to, to report to the regulator but certainly something that we could talk about in more detail offline.
I’m going to leave it there because we are, we are at our time. Obviously, if we have more questions, and I can see that there are some more that have popped up so thank you to, to William Oswald and Caroline Leahy for those. We will answer those offline. If you have any other questions or if anyone would like to speak about this matter further the obviously do pick up the phone to, to me, to Nick or to Bella. And it’s just left for me to thank everyone who has attended this session and listened to us today and to thank Nick and Bella very much for your, for your contributions and participation. Thank you.
Bella von Bohlen, Leader
Crisis and Litigation Communications, FTI Consulting
Thanks.
Nick Dent, Partner
Mishcon de Reya
Thank you.