Christopher Gribbin, Managing Associate
Mishcon de Reya
Hello, I can see some people are just joining, so I’m just going to give it a minute and then we’ll get started. We’ll just give it another half a minute or so, last people join and then we’ll get started.
Welcome everyone, I think we will begin, everyone is more or less here. Hello. I am Christopher Gribbin, I’m a Managing Associate in the White Collar Crime and Investigations team here at Mishcon de Reya and I am very happy to welcome you to a new series of webinars we are running at Mishcon on investigations. Over the course of this series of short lunchtime webinars throughout this year we’re going to be looking at the full range of issues and challenges that arise in investigations, whether those are internal investigations or whether it’s dealing with investigation by a regulator or another enforcing body and so the idea is to get a sense of the pitfalls, the risks and even the opportunities that investigations can bring. So, over the coming months, we will be covering topics such as how to handle the media at the same time as managing an investigation where we will be speaking to the firm’s media and reputation team, or how to deal with or indeed avoid in the first place an investigation into allegations of financial crime. So there’ll be invites for those subsequent sessions that go out over the remainder of this year, so please do look out for them and next session is going to be in March on dawn raids, where we will be speaking with Sarah Houghton, a Partner in our Competition team, but on this inaugural occasion we’re going to be taking a whistlestop tour of a workplace investigation with Laura Penny, a Partner in our Employment team, the team that does an enormous amount of this sort of work. So, Laura, hello. Good to see you.
Laura Penny, Partner
Mishcon de Reya
Hello. Hello.
Christopher Gribbin, Managing Associate
Mishcon de Reya
If we start at the start, when we say or I say, “workplace investigation”, what, what do we mean by that?
Laura Penny, Partner
Mishcon de Reya
So, as you have very kindly alluded to, and thank you very much for having me today, the, the concept of workplace investigation covers an enormous amount of our work and my guess is that most people would be most familiar with lawyers being involved in a workplace investigation in a very sort of typical way, in a classic kind of advising capacity. So, where an organisation has a grievance, is going through a disciplinary process, you’ll very often have lawyers involved behind the scenes advising on that process. Where we are increasingly acting and where there is an increasing uptick of our work is actually acting in a slightly different capacity to that as well and that is to sit as actual investigators, so we will go in, we will actually carry out an investigation for an organisation, it will be us doing the interviews, it will be us going through the process and we’ve done an awful lot of work in that stream for the last couple of years, it’s a growing area and ordinarily that will be divorced from, I know we’ll come on a little bit to talk about the difficulties of being both legal advisor and investigator, but that that is a growing piece in terms of where we are actually acting going in. Typically, the investigations that we see and that we have acted come from a grievance for example, being raised, so and so has happened to me at work, so and so is treating me badly at work, that kind of thing. Disciplinaries, when you’re having to look into something that someone might have done, one of the very big investigations that our team did recently was all to do with financial mismanagement, one of the guys in the accounts department basically syphoning off some money to his own account and that was a huge investigation in terms of looking at whether it was happening so, was it actually, was this money actually going somewhere, right through to interviewing the people that may or may not have known about it and then through to looking for the organisation’s sake at well how could that have, how could we let that happen, what’s wrong with our systems and controls that, that happened in the first place. The other piece of our practice which we’re quite unusual as an employment team as it is to do this, but we act both for employers and for individuals and so we’re very often advising individuals when they are the subject of an investigation, my practice includes quite a lot of work for the financial services sphere as well, so very often that will cross over into our regulatory team into the compliance world of life and that gives us a fantastic insight from the other side of the table so, with one thing and another, it is now an enormous part of our practice, our investigations piece.
Christopher Gribbin, Managing Associate
Mishcon de Reya
And we always sort of hear about workplace investigations as much as anything in the press and you say it’s a growing area, if you could just, if I could ask you why it’s growing because the work that I do is largely around sort of allegations of financial crime and you can draw a pretty clear line between legislative developments which have meant that companies are liable for failing to prevent financial crime, bribery and from later this year, fraud, and so they’ve got an incentive to investigate because they want to know whether there’s liability so, there’s been an uptick there in investigations in the work that I do but is there a similar sort of reason why it’s grown in the way it has in recent years for your work?
Laura Penny, Partner
Mishcon de Reya
Yeah, so I think, I think from in my world, it’s two-fold and, and I think one of the big motivating factors has been a change in legislative landscape so, I’m sure everyone will have received an enormous amount of updates from lawyers like me telling them about their duty to prevent sexual harassment being introduced at the end of last year and there’s lots of examples of that in terms of more obligation being put on employers and even within so if we again look at our sort of FCA world or our crossover into that regulatory world, there’s a huge drive, not yet, released by the FCA but much trailed into non-financial misconduct and that gives rise to liability both for the employer but also for the individuals, for the regulated individuals. So, that definitely feeds a feeling of cultural shift and of that legislative change that it sounds like you guys have experienced in the financial crime world as well, but the second key factor I think really is the demonstrable reputational risk that can arise if organisations have not investigated and have not taken steps to remedy complaints and behaviour, behaviours of this type. I mean you can, you can literally list off any number of them that have been publicly revealed, you know whether that’s Welsh Rugby Union, whether it’s any number of cricket clubs, whether it’s you know certain financial asset managers who’ve found themselves in trouble and I think that the cultural shift between how these things now become public is also changing, you know we are no longer in a world where you are really relying on a front page splash in The Times or The Guardian or whichever other paper you read that makes these things public, I mean the entire Me Too movement came out of social media predominantly, that was really nothing to do with any kind of traditional and professional journalism at its outset when it got the snowball going. So, I think you know one thing or another leaves organisations to realise that actually the reality of these things is that there’s very often circumstances in which you just simply cannot justify not doing a proper investigation into these types of things now.
Christopher Gribbin, Managing Associate
Mishcon de Reya
And they come from all sorts of sources but they can, they can come to sort of dominate the new agenda and some of the examples you referenced there being extremely high profile and sort of led the news for, for days or weeks and do you, do you, do you think by virtue of their high profile, those examples, they’ve given, there’s been a cultural shift both in the attention they get but also in the approach that employers take that they can’t hope for things to go away in the say way that a…
Laura Penny, Partner
Mishcon de Reya
I think that’s definitely right, I mean lots, lots of those examples are historic allegations and I mean years and years and decades ago and now they are coming to light so I think when an employer is doing that sort of risk benefit analysis, you’ve got to be looking at a much longer term view of whether these things ever come out in future, it’s no longer the somewhat more simplistic world we might have been in sort of you know fifty years ago where actually things were dealt with on a more case by case basis and frankly, there was the sort of an analysis that says well maybe this one is one that will go away with the right settlement and everything else, I mean there’s also a sort of imposed cultural shift on some of those things as well so, we now operate in a world where confidentiality can be far less stringent than it ever could be, our own regulator, the SRA, has lots of views on what you need to put into any settlement agreement for example, and you can’t stop people being whistleblowers, you can’t stop people going to the police and all the rest of it and you know the vast majority of employers would never have intended to do those things anyway, but bringing to them to the forefront of things that you actually cannot do has really been feeding that, that shift as well.
Christopher Gribbin, Managing Associate
Mishcon de Reya
Okay, okay, so that’s sort of, that’s the landscape as it were. If we think about a company that has an issue, a grievance is raised or a, a whistleblower report lands on a desk, what does a typical workplace investigation look like?
Laura Penny, Partner
Mishcon de Reya
So, I knew you were going to ask me this question and I’m going to give you a sort of slightly lawyerly answer to start with because there is no typical workplace investigation, there’s no cookie cutter and that’s not quite fair because there’s obviously common themes and common tasks that you do in any kind of investigation, but your reaction to these things can be enormously different depending on the circumstances. So it might be that in the vast majority of cases that you deal with day-to-day as an employer, it’s perfectly acceptable to run things at an internal level, you know you very often get grievances being investigated and heard by an HR team, a compliance team, a legal team, someone else in the business if you don’t have those kind of back office support systems as well and that is absolutely fine in lots of circumstances, you know it’s a junior employee, it’s a relatively limited scope of what the complaint is, all of those things and you can demonstrate as an employer that actually, there’s enough level of escalation, there’s enough level of independence there that someone internally is perfectly the right person to be doing these processes. On the other end of the scale, you can have an enormous external investigation where you fully go out, you instruct an external investigator, it’s all very formalised, it can take you know weeks, months, however long it takes and that is an entirely different exercise in feeling that than sort of internal piece and obviously you might look at doing that in the more complex situations where the person involved or being complained about is at a very senior level, for example where you just can’t possibly demonstrate that anyone within the business might be able to take a decision against them or anything along those lines and then there’s everything in between so, I very recently had a case where we were advising an employer on a redundancy process, one of the people who was at risk of redundancy raised a sex discrimination complaint, so basically they you know the employer was motivated by sex discrimination in her case for highlighting her even being at risk and we, the approach we took was to completely hive out that element of the complaint so, the sex discrimination was investigated externally, completely independently of the redundancy process that, that external investigation fed back into but the redundancy process always remained internal and was run internally by, by the employer. So, no, no typical thing, but there are obviously are trends of what you do and what you think about in any of these things.
Christopher Gribbin, Managing Associate
Mishcon de Reya
Yeah, when you say, you said the external option, which is the option I see with financial crime, that is a bit of a vexed term because in terms of where it sits with independence because there’s been a lot of arguments playing out in recent years about whether or not an external investigation, where you appoint a sort of legal team, whether not that’s the same thing as a independent investigation which is a term that is often used following an investigation. Where do you sit on that? How does, how does it sort of work in your world?
Laura Penny, Partner
Mishcon de Reya
So, I think you’re right and you do have to be very, very careful sometimes about the terminology that you are using. Sometimes the label ‘independent’ can be very heavily weighted and laden with lots of promise and it’s not always the right descriptor of an investigation that’s being carried out, so you do have to be quite careful about it, ‘external’ is often the preferred term because, you know, it’s far less likely to be open to attack. You do need to be going to someone for these things where you can confidently manage them and you know you’re going to an investigator who’s going to be alive to those sorts of issues, so I will almost certainly in the investigations that do, where they’ve faced any challenge from the person or people being investigated, I will almost always face the question of well you can’t possibly be independent because you’re being paid by the company and that, that’s one end of the scale and of course the answer is lots, lots of different answers to that, including no, I’m being engaged as an investigator and I have my own regulatory responsibilities and all the rest of it and that’s the deal and the money is sort of, is what it is, through to more convincing arguments sometimes where there can be suggestions of an existing relationship between you know our firm and the client for example, and a lawyer and the client, you know someone who’s an external advisor who has acted in different capacities and what plays into that and we definitely don’t have time for this conversation today, but what played into that is this balance between circumstances in which you might want to be acting as advisors even if what you’re doing is investigating to an extent so, you’re still doing that under the sort of guise of legal professional privilege, that’s just very briefly where you get to protect as an organisation the advice that you’re being given by your lawyer, but there are limitations to that versus where you are engaging a lawyer but it’s not really relevant that they are a legal advisor at that point, they are being engaged as an external advisor.
Christopher Gribbin, Managing Associate
Mishcon de Reya
Yeah, the privilege I think we are going to in future webinars try and unpack it in so far as one can in a lunchtime webinar because, as you say, not straightforward. But putting, putting privilege to one side, what are the other ways in which the whole process can sort of be scuppered, can go wrong, things that you know you’ve seen not necessarily in your own investigations but things to avoid.
Laura Penny, Partner
Mishcon de Reya
Things to avoid. So, so, the one thing I would say is it can be a very daunting and frenetic period of time when you receive, for example, a very serious complaint or where, particularly if you’re sitting at sort of GC level or HRD level, where the business suddenly decides that it needs some sort of clever cultural review of things, things can seem very urgent and sometimes they genuinely are, but in all cases, I would say that the preparation piece is the most important for an investigation piece, you’ve got to know what you are doing at the outset, what you’re investigating, why, all of those things and that is my, you know, if there’s one takeaway piece of advice from this, this 20-25 minutes then it is definitely take the breath at the start and make sure you’ve set that up. One of the worst sort of horror stories I have ever had to deal with and I hasten to add that we were not involved at the outset of the investigation, we were not instructed till a long time into it, but an organisation had been out to a barrister, and barristers sometimes do these things as well, but different pitfalls and as you’d expect I would say you know don’t always bet on a barrister being your best investigator, but they, they had instructed the start of this investigation and then found themselves snowballed into something that took weeks longer than they thought it was going to, an increasing amount of people being interviewed on a you know week by week basis and the barrister giving an entire suite of recommendations as to what ought to be done at the end of this process and no one in that organisation had wanted any recommendations out of the barrister and they were entirely unrealistic recommendations for the type of organisation they were so, it was like you know, you really need to look at your entire IT system and how the one system talks to the other and all the rest of it and they just, that was just so far out of the scope of what they thought they were getting in that investigation. So, definitely that sort of preparatory piece is where you stop most things hopefully going horribly off the rails.
Christopher Gribbin, Managing Associate
Mishcon de Reya
Yeah, I would completely agree with that, I think it’s very hard to recover if you take over an investigation from a, from a bad start where the whole thing’s just been set up incorrectly, both for privilege for all sorts of reasons, it’s very, very difficult.
Laura Penny, Partner
Mishcon de Reya
Yeah, yeah.
Christopher Gribbin, Managing Associate
Mishcon de Reya
On the other side of the coin then we’re almost out of time, what are your top tips? What are the things to…?
Laura Penny, Partner
Mishcon de Reya
Okay. Top tips, again, preparation is definitely the recurring theme in all of these and I’ll talk about them in terms, in the context of a sort of bigger, external investigation but there’s lots of these things that would apply equally to when you’re sitting down and starting an internal investigation as well probably just on a lesser scale. So key things to think about. Who needs to be involved? Who is going to instruct your external investigator? Who are they going to take instructions from within your organisation? If it’s a very senior person or people involved, do you need the board involved? Do you specifically need a subcommittee of the board involved? Right. So, and the flip of that coin is, is there anyone who needs to be specifically excluded from that process? And again, a very sort of board level dispute, it is no good instructing your board to be your instructing person when actually, it is another board member who is being complained of because you then get into a world of pain of argument of what they are entitled to see just by virtue of being a board member and having their own responsibilities as a director on the board. We’d see those more often than I’d like, frankly. Then sit down, what do you want this investigation to do? How long is it looking at? What allegations is it looking at? Who is it going to talk to? Are there any documents that need to be provided? And all of those things, all of those scoping pieces should then be recorded in a terms of reference and your terms of reference is, doesn’t have to be pages and pages long, it’s just a document that says “This is what you’re instructed to do investigator, you’re instructed to look at this… these people, you’re instructed to speak to these witnesses, you’re instructed to look at this set of documents”, you know, “as I’ve put on a zip file”, whatever it is. Then at the end, what do you want? Do you want your investigator just to do a pure fact find? Yes, that happened. Yes, I find on the balance of probabilities that x did probably say y to z or do you want more than that? Do you want a, “In my opinion as an investigator, I recommend this now goes to”? Do you want the next step of a disciplinary process to be recommended or anything like that? And at the same time that you’re setting those up, obviously with my sort of employment lawyer hat on, I’d be saying to you look, think about what you need to do with anyone within the business. Do you need to be looking at suspending people? Do you need to be looking at taking other steps to make sure that the investigation has a free run? And the reason the terms of reference is so, so important and sometimes people can be a bit reluctant to put one together in case that is all the investigation can do ever and that’s not quite right, you put your terms of reference together so that at the almost inevitable point at which it becomes clear that there might be someone else that you should talk to or there might be a second set of documents you ought to be looking at, I mean I don’t think I’ve ever done an investigation that doesn’t have an element of mission creep to it, but there’s a huge difference between just allowing that to elapse gently and then not knowing where and how to draw a line again versus a real active decision that says actually yes, there’s a really good reason now for adding x to the witness pile and you just do an amended terms of reference, that’s fine, you can deal with all of those things, but it’s a really good landing point to always bring you back to what you are trying to do. And then finally, finally, never go into an investigation without some sort of plan as to what you are going to do as an organisation with the findings of that investigation. There is no point in having a lovely, fulsome, very expensive sometimes external investigation carried out that’s disrupted all of your workforce potentially, if you are not then willing to do something with the findings of that investigation and what you do obviously varies according to huge things, they can be huge of amounts of, you know is it workplace mediation to get all these people talking again or is it actually some big cultural shift that we’re going to advertise that we’ve done internally? That slightly goes back to your introduction piece, which I know some people will have listened to quite cynically to say actually, investigations can sometimes be an opportunity, sometimes it really is your opportunity of an organisation to demonstrate how seriously you take things and how well you deal with things.
Christopher Gribbin, Managing Associate
Mishcon de Reya
Yeah, well look, it’s 12.24 by my clock so we are running out…
Laura Penny, Partner
Mishcon de Reya
We’ve done well.
Christopher Gribbin, Managing Associate
Mishcon de Reya
…against our time so, that I’m afraid has to conclude the first in this series but thank you so much, Laura. As I mentioned at the start, we are going to be ranging over the full landscape of investigations in the coming months in the course of this series. The next one is scheduled for March when Sarah Houghton, a Partner in our Competition team here, will be here to talk about dawn raids and how to manage them. But for now, thank you so much for joining, thank you Laura and see you next time.
Laura Penny, Partner
Mishcon de Reya
See you next time everybody.