How should an organisation prepare for and react to a dawn raid?Clearly the best preparation for a dawn raid is to ensure that compliance procedures are sufficiently robust to avoid regulatory breaches in the first instance. However, if the worst is to happen then “be prepared” is the mantra. Circulate guidelines to employees who will be at the coalface when investigators arrive: your receptionist, security staff and junior management. Ensure they have the firm’s checklist of procedures and have been trained to understand the powers and methodology of the regulator. When the investigators arrive, senior management and in-house legal representatives should first find out the nature of the allegation and scrutinise the warrant. A request should be made for the search to be delayed until the organisation’s external lawyers arrive. The appointment of external lawyers will provide the protection of legal professional privilege for relevant documents and communications, and expertise in the consideration of the search mandate. Legal professional privilege is not available to the in-house legal team. Monitoring the raid is vital: shadow each official to make sure their behaviour is recorded accurately and that, crucially, no privileged correspondence is reviewed or seized. Any documents which are to be seized should be copied and a full record of who took them should be made for future reference. If a seized document is in electronic form, it should be backed up onto the central server. The organisation’s IT manager will be relevant in such a scenario because the investigators may have brought along an IT specialist to retrieve electronic data from computers. It is imperative that documents are not deleted, shredded or otherwise removed from the premises whilst the raid is taking place. Any approach for comment/statements from employees should be made in the presence of a lawyer, and then should be kept short and relevant to the question. What an employee must not do is lie. This will lead to an offence being committed, which can result in a prison sentence if proved. Once the raid is completed, it is important that employees are updated on the reason behind the raid and the organisation’s stance on the search. Whilst SMEs may be of the view that this tends to happen only to larger entities, such a nonchalant approach could be their undoing if, for instance, the SME is part of a larger investigation or is the sole focus of the enquiries. Dawn raids are no longer the preserve of the silver screen, but a real weapon in the modern day regulator’s armoury. Anil Rajani is partner at Fladgate LLP.
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