Witness interviews are a key part of most corporate investigations. While documentary evidence can provide the underlying facts of a case, it is often the accounts given by witnesses that deliver the context and detail of what has happened. They can provide vital background information, shed light on the motivations of those involved and allow for an individual’s credibility to be assessed. However, the timing, preparation, record taking, content and use of the interviews need careful consideration.
Witness interviews can serve a number of purposes in the context of a corporate investigation, including:
- to scope the investigation;
- to understand the facts and issues;
- to understand accountability and defences; and
- to assess the credibility of individuals and their accounts.
Interviews in this context can present particular difficulties because of the myriad of employment, criminal, civil and regulatory issues that can arise, and the fact that the interests of the company and the witness are often not aligned. These interviews are typically conducted confidentially, premised on a need to maintain legal privilege and the duty of confidence owed between an employer and employee. This can often be at odds with the expectations of the authorities for the company to provide details of the witnesses’ accounts. In addition, there is often a tension between a company’s right to conduct its own enquiries into allegations of wrongdoing, including interviewing its employees, and the suggestion by the authorities that its enquiries could (depending on how they are conducted) be detrimental to a criminal or regulatory investigation.
This chapter explores these issues, considers the practices that can be adopted when conducting interviews and highlights some of the benefits and risks of these different approaches. It considers the preparation and formalities that may be required for witness interviews in the United Kingdom, and identifies particular complexities that can arise in global investigations when multiple jurisdictions are involved.
7.2 Types of interviews
Broadly speaking, witness interviews in corporate investigations can be split into two categories, preliminary or scoping interviews, and substantive interviews. Generally, they should be distinguished from any employment or disciplinary interview.
Preliminary or scoping interviews may be appropriate at the outset of an investigation to seek background information, identify further sources of evidence, obtain a quick understanding and provide context to an allegation. These interviews will generally take place at the start of the investigation, and depending on the specific circumstances, may take place before any firm view has been reached on the terms of reference or extent of material that will be reviewed. They are more likely to be conducted with employees who may have knowledge of matters under investigation but are not at direct risk of any criticism. It may also be necessary to undertake interviews with whistleblowers at this stage (see Chapter 18 on whistleblowers).
Substantive interviews will generally take place after most, if not all, the relevant material has been reviewed. The purpose is to obtain a detailed understanding of what went on, to provide explanations of key documents in the case and, if necessary, to test the account given. These interviews will often be used to inform an understanding of any individual and corporate liability and any defences. The timing is important and can depend on a number of factors including the available evidence, whether the authorities are already involved and whether civil proceedings are contemplated.
7.3 Deciding whether authorities should be consulted
The decision about whether to consult the authorities in advance of a witness interview is not dictated by statute; no statutory framework explicitly requires it and in general terms a company may manage its internal affairs and make enquiries as it sees fit. Therefore, this decision often rests on whether there is an implicit obligation on the company to notify the authorities under its regulatory reporting regime, or whether it is in the interests of the company to co-operate with the authorities by notifying them of any forthcoming interviews.
Regulated firms may be obliged to report a violation or allegation of wrongdoing. For example, the Solicitors Regulatory Authority’s (SRA) code of conduct requires a law firm to report any allegation of serious misconduct promptly, fully co-operate with its investigation and report any material change about the firm.1 Accountants may hold similar obligations under the requirements of their regulators. There are reporting requirements under the Listing Rules for those companies admitted to trading on a regulated market,2 and those in the regulated sector are required to submit a suspicious activity report if they know or suspect (or have reasonable grounds for knowing or suspecting) that another person is engaging in money laundering or terrorist financing.3 Financial institutions regulated by the UK Financial Conduct Authority (FCA) must under Principle 11 of the FCA’s Principles for Businesses act in an open and co-operative manner and disclose anything relating to the firm of which the regulator would reasonably expect notice.
The FCA’s expectations under Principle 11 extend to requiring a firm to consider notifying it of a decision to investigate conduct concerns at the earliest opportunity. Jamie Symington, Director in Enforcement at the FCA, suggested during a speech4 that self-reporting is the bare minimum that is required and that a firm should discuss the scope of its investigation with the FCA as early as possible. He identified witness interviews as a key area of risk, suggesting that firms be alive to the possibility that their own investigation could prejudice or hinder a subsequent FCA investigation, and that firms should discuss this with the FCA before taking action. A firm should therefore consider its regulatory obligations when assessing if, and when, to consult its regulator regarding any proposed witness interviews.
During a speech at the 2nd Annual GIR Live London conference,5 Mr Symington recognised that there are sometimes good reasons for firms to carry out their own investigations and confirmed that the FCA encourages this proactive approach and does not wish to interfere with a firm’s legitimate procedures and controls. However, he reiterated that when conducting their own investigations, firms should ensure that they do not take steps that might prejudice or obstruct a subsequent FCA investigation and highlighted the importance of early communication in this regard. The Serious Fraud Office (SFO) has similarly acknowledged that there are good and proper reasons for a company to carry out its own investigation6 but has also referred to the potential dangers of an internal investigation ‘churning up the crime scene’, which could include the taking of first statements from witnesses in a way that influences their testimony.7
Where the authorities are not yet aware of the allegations under review, it is likely that preliminary enquiries will be necessary before the company is in a position to reach a view as to whether to self-report (see Chapter 3 on self-reporting to the authorities). Where this includes witness interviews it may be inappropriate for the authorities to be consulted in advance. This can create a tension between the authorities’ expectations to be notified as well as the need for the company to bear in mind the risks of prejudicing a future investigation.
Where an investigating authority is already involved it is prudent for the company to consult it prior to undertaking interviews. Increasingly the SFO and the FCA have sought to impose restrictions on the conduct of interviews in corporate investigations or to prevent them from taking place (see Section 7.6). While a company cannot be prevented from undertaking its own interviews, there is risk of criticism if it proceeds without the consent of the authority, particularly where it could be suggested that it has prejudiced an investigation.
7.4 Providing details of the interviews to the authorities
The issues relating to co-operation with the authorities in the context of corporate investigations are explored in Chapter 9 on co-operating with authorities. When it comes to witness interviews, authorities often expect details of the interviews to be provided. It is therefore crucial to consider the purpose of the interview, its intended audience, record-keeping and, if appropriate, how this information is to be shared.
There is no statutory duty on a company to co-operate with the authorities with respect to its witness interviews. Instead there is published guidance in the form of codes of practice, speeches and guidelines. This varies between regulators but for the most part there is an expectation that details of witness accounts should be provided.
This issue is considered in the Code of Practice on Deferred Prosecution Agreements (the Code)8 jointly issued by the SFO and the Crown Prosecution Service. The Code states at 2.8.2(i) that co-operation with the authorities will include identifying relevant witnesses, disclosing their accounts and the documents shown to them and, ‘where practicable’, making witnesses available for interview when requested. General Counsel of the SFO has made clear that it would expect to be told what the witnesses had to say, with particular emphasis on ‘first accounts’.9
What is less clear how the detail of the accounts should be imparted and the level of detail that is required. In the case of SFO v. ICBC SB10 it was sufficient for oral reports of first-account witness evidence to be provided by the bank to the SFO to enable full co-operation to be established.11 Similarly, in the case of SFO v. XYZ Ltd12 oral summaries were provided without the company’s badge of ‘genuine cooperation’ being compromised.
However, in (SFO) R v. Sweett Group PLC (unreported), Sweett Group’s refusal to hand over details of the witness interviews undertaken during its internal investigation was deemed unco-operative by the SFO. The level and extent of co-operation with the SFO will ultimately be determined case by case.
The FCA expects regulated firms to provide notification of any significant matters that occur in the context of an internal investigation, in accordance with its Principle 11 obligation. While this does not explicitly apply to witness interviews, the FCA Enforcement Guide makes clear that if the FCA is ultimately asked to rely on submissions or an investigation report in the context of its own decision-making powers, it would ordinarily expect the firm to provide the underlying material, which could include notes of witness interviews, in addition to the report itself.13 While the level of information will undoubtedly differ from case to case, the FCA has indicated that an oral report may not be sufficient and that information should be shared in a transparent manner, with a proper record.14 Furthermore, if an individual is suspended, a firm must submit a Form C explaining the reasons for suspension.15
The guidance surrounding co-operation with the authorities and what is expected is evolving. In cases where the company or its employees are at risk of further investigation, prosecution or civil action, the company will want to consider the benefits that early co-operation may bring. However, whether it is in the interests of the company to co-operate will depend on the facts of each case.
7.5 Identifying witnesses and the order of interviews
The company or its representatives, or both, should seek to interview all company personnel who were involved in the facts under investigation, including those who should have been involved by virtue of their position. Reporting lines of those involved should also be considered. The witness list may expand as more information becomes known, and therefore should be reviewed regularly.
Employees generally have a duty to co-operate and are likely to owe a duty of confidence towards their employer, and a failure to comply could result in disciplinary action.
Where there is a whistleblower, it may be preferable to interview him or her at the start of the process (see Chapter 18 on whistleblowers). Broadly, the order of other interviews should be based on the level of risk that the witness poses to the business, beginning with those who present the least risk to the company. For the most part this is likely to follow levels of seniority, starting with lower-level employees and leaving senior management until later. Timing considerations sometimes mean witness interviews need to be taken out of the normal order. For instance, it is generally advisable to ensure that any employees who may be about to leave the company (either permanently or for temporary absence such as maternity leave) are interviewed beforehand and while they still owe a duty to the company to co-operate. In circumstances where there are a number of individuals to be interviewed, consideration should be given to the creation of a ‘leavers list’. (See Section 7.6.)
The benefit of this approach is that the company may be better positioned to obtain an overall sense of the extent of the issues before focusing on particular areas of risk. Lower-level employees are generally more likely to communicate openly, although it is important that sensitive or confidential information is not referred to unless strictly necessary as there is risk that information may be shared.
While it may be appropriate to conduct early interviews with senior employees to obtain initial accounts (particularly where there is likely to be more than one opportunity to interview), generally members of senior management should be interviewed when the investigation is further advanced. Typically, senior employees are more likely to pose a greater risk from the perspective of corporate liability and therefore it is important that any potential risks are identified beforehand. Under the principle of identification, in the United Kingdom a company can be criminally responsible for the actions of those employees that represent the ‘directing mind and will’ of that company,16 generally restricted to board directors, the managing director and other senior officers who carry out management functions on the company’s behalf.17 The principle of identification is explored in more detail in Chapter 1.
This can cause difficulties when interviewing board members and senior management who may be the ‘client’ for the purposes of the investigation but who may need to be interviewed in the context of their own involvement. For the most part this can be avoided by identifying the ‘client’ at the outset of the case as made up of a group of senior employees or board members with no involvement in matters under investigation (see Chapter 5 on beginning an internal investigation at Section 5.2). However, depending on the size of the company and the nature of the case, this is sometimes unavoidable and therefore the basis on which the interview is being conducted must be made clear to the witness (see Section 7.8).
There are a number of statutory exceptions to the principle of identification. Under section 7 of the Bribery Act 2010 a corporate can be criminally liable for the acts of its employees unless it can show that it had adequate procedures in place to prevent bribery from taking place. Similarly a corporate can be guilty of corporate manslaughter if the management or organisation of its activities causes a person’s death, and amounts to a gross breach of a duty of care owed by the organisation to the deceased.18 When the issues under investigation fall within the exceptions it can be difficult to identify the appropriate individual to interview on behalf of the company. Again, the purpose of the interview and the basis on which it is being conducted needs to be made clear from the outset.
Senior employees are also more likely to owe fiduciary duties to the company and potentially be liable for breaches of those duties (see Chapter 5 on beginning an internal investigation) and become defendants in civil proceedings by the company. As a result, these interviews should generally take place when the company is in a better position to identify the extent of any breaches.
Relevant information could also be sourced through interviews with third parties including former employees, customers and contractors. The obvious benefit is that these witnesses may be more forthcoming where there is no risk of disciplinary proceedings. However, third parties cannot be compelled to attend an interview, and unless there is a contractual obligation requiring their attendance, they could refuse to attend. Even in circumstances where a contractual obligation exists this could be difficult to enforce, as could a confidentiality clause. The interview process itself is likely to notify the third party of the investigation and the subject matter under review and depending on the nature of the relationship, it may not be appropriate to interview him or her at that time, particularly when the decision on self-reporting is outstanding. The timing of these interviews would depend on the facts of each case.
7.6 When to interview
Scoping interviews usually take place at the outset of an investigation, most likely with a few individuals who have a general knowledge of the subject matter under investigation.
Substantive interviews are likely to be most effective once the bulk of any document review has taken place. This will allow for any key documents to be identified and put to the witness, and for questions to focus on the areas of risk. Furthermore it is best to plan for only one interview; while there may be circumstances where a second or third interview is appropriate, it is by no means guaranteed that the witness would agree.
Timing of the interviews can pose particular difficulties when there are competing considerations. For example, it may be necessary to delay when the company has a claim for injunctive relief against individuals, to avoid assets being dissipated in advance of a freezing order being granted. However, it could be that there is only a limited amount of time to interview an employee who is leaving the company or the company may need to speak to an individual at short notice to assist in an assessment of whether to self-report. Clearly such factors need to be prioritised.
It is important to allow for a degree of flexibility as certain factors outside the company’s control can dictate when an interview should take place. Where the corporate investigation is likely to remain an internal review there is little risk to the company conducting interviews to a timetable that suits it. However, where there is suspicion of a criminal or regulatory violation and a formal investigation has commenced, there are a number of risks associated with conducting interviews in parallel with these investigations.
As a general point, any interviews with individuals at risk of criminal exposure should be postponed until all evidence has been secured, to minimise the risk of evidence being destroyed. This is particularly important where a criminal or regulatory investigation is likely. Similar concerns apply where the individuals are potential defendants to civil proceedings by the company.
Both the SFO and the FCA place significant emphasis on the first accounts of witnesses, and take the view that they can help inform an understanding of what went on and allow for the accuracy or integrity of a witness to be tested.19 However, depending on the facts of the case this view could be misplaced; the first account given by a witness is not necessarily always the best one, particularly in complex investigations that span a number of years and where there is extensive underlying material. The quality of a witness’s evidence can often be improved having been given the opportunity to review the evidence. Nonetheless, the SFO and FCA have increasingly sought to place restrictions on interviews of key suspects in corporate investigations and may seek to prevent them. In such circumstances it may be prudent for a company to seek to agree an approach with the authorities prior to conducting any interviews.
The authorities are also increasingly sensitive to the risks of witness contamination, and a company whose conduct of witness interviews has caused prejudice to a criminal or regulatory investigation could be subject to serious criticism. At best this could involve comment or views that are unhelpful for the company; at worst this could include allegations of perverting the course of justice. Jamie Symington, Director in Enforcement at the FCA, has observed that firms must take care not to take steps that might prejudice an FCA investigation and suggested that in certain circumstances it may prefer that a firm does not commission its own investigation, for example, in criminal investigations where alerting the suspects could have adverse consequences.20 Mark Steward, Director of Enforcement and Oversight at the FCA, has commented on the importance of an ‘independent public body investigation’ being able to conduct itself without ‘the crime scene being trampled over.’21 The SFO has similarly made clear that corporate investigations that
‘trample over the crime scene’ are unhelpful and that integrity of evidence, especially regarding witness accounts, should be respected.22 As noted above, the Director of the SFO has commented that internal investigations may result in first statements of witnesses being taken, delivered or recorded in a form which may be less than full and accurate, as opposed to recording the account by way of a transcript.23
Witness interviews should always be conducted in a manner that minimises the risk of contamination or prejudice.
When a criminal or regulatory investigation is anticipated or already under way, a company may wish to consider engaging with the authorities at an early stage to avoid any criticism that might follow. However, engaging with the authorities may not necessarily be appropriate in every case and runs the risk of loss of control. Each case will need to be assessed on its specific facts and surrounding circumstances.
7.7 Planning for an interview
Interviews in the context of a corporate investigation can be conducted by various people: internal or external lawyers, accountants, forensic experts, specialist investigators, HR or compliance officers, and others. Careful thought should be given to who is best placed to undertake them.
As a general rule, where a company is engaged in a corporate investigation into allegations of criminal or regulatory misconduct, it is preferable to have lawyers (internal, external or both) present at interviews to take notes and identify the key risk areas, and to enable confidentiality and privilege to be maintained. Generally it is preferable for the same person or persons to conduct the interviews of those witnesses who provide similar types of information. This will allow for consistency of approach and for the credibility of witnesses to be more easily assessed. It is also preferable to have two interviewers present to allow for one to take notes while the other asks questions.
Where external counsel has been instructed they should conduct the interviews. External counsel often bring (and importantly are seen to bring) expertise, objectivity and independence, which can be very important when assessing the credibility of the investigation. Although it can bring a degree of formality that can make the experience more daunting for the witness, the use of external counsel will strengthen a claim to legal privilege (see Chapter 31 on privilege).
Where external counsel has not been instructed, the company may consider resourcing the process internally either by using compliance personnel, internal auditors or HR officers or by using in-house counsel. Either way, those conducting the interview should not have had any involvement in the allegations under review. While the use of non-lawyers may decrease the levels of concern among employees, in general they may be less skilled in conducting these types of interviews and less familiar with the issues that may arise. In-house counsel will have a good understanding of the business and legal advice given will generally be privileged in the United Kingdom. However, the protection of legal privilege will not apply to advice given by in-house counsel in the context of European Commission related investigations24 and it may be necessary in those circumstances to engage an external lawyer (see Chapter 31 on privilege).
Where forensic experts (internal or external) are also engaged it may be prudent to involve them in interviews with key individuals. If so, it is generally advisable for these interviews to be conducted alongside internal or external lawyers to ensure that the contents can be covered by the company’s confidentiality and privilege.
Prior to the interview, a core bundle of documents relevant to the particular witness should be prepared. Consideration should be given to whether the witness is given access to documents, either before or during an interview, or as part of staged disclosure, and what documents, if any, should be put to the witness. Referring to documents can be a very useful tool to assist in refreshing a witness’s memory and to allow for specific comment. Key documents can be put to provide a better understanding of its content and to give an opportunity for the witness to provide explanation.
In general, copies of confidential or sensitive documents should not be given to witnesses where there is a risk these could be shared or used contrary to the company’s interests. In complex matters, providing pre-interview disclosure will enable the witness to prepare; however, where documents are provided to the witness, this should be done on a restricted and confidential basis with the requirement that they are either returned or destroyed at the conclusion of the interview. It is preferable that a witness is not given documents that he or she has not previously seen.
The provision of documents may give rise to data protection issues, particularly in light of the company’s obligations under the data protection principles25 and where multiple jurisdictions are involved. (See Chapters 5 and 6 on beginning an internal investigation and Chapter 11 on production of information to the authorities.)
A detailed interview plan can be useful to ensure that all relevant questions are put to the witness, although the interviewer should not feel restricted by this. In general, topics should be addressed in a chronological order that develops facts in a logical way.
Regarding the provision of topics in advance of an interview, it is generally helpful to indicate the main areas that may be covered to assist the witness to prepare, particularly where the subject matter is complex. However, giving a list of detailed questions is generally not appropriate, and a witness who has had the opportunity to script their answers is less likely to be considered credible. Furthermore, questions are likely to evolve as the interview progresses. There is also a risk that the questions might be shared.
Interviewers should ask questions in a measured and courteous manner with a clear and professional tone. There is little point in adopting an aggressive approach or engaging in lengthy cross-examination; this is unlikely to be effective and could give rise to criticism, or employment or personal injury claims. A skilled interviewer will seek to put the witness at ease before addressing the key topics. Where there are two interviewers, different interviewing styles can often be effective.
7.8 Conducting the interview: formalities and separate counsel
Professional obligations can impact the way in which witness interviews are conducted. Solicitors hold a general duty to act in their client’s best interests,26 they must not take unfair advantage of a third party,27 and they must not take unfair advantage of an opposing party’s lack of legal knowledge where they have not instructed a lawyer.28 These duties do not always align and it is therefore important to balance the competing requirements.
Counsel conducting the interview should be satisfied that the witness understands the basis on which he or she is being interviewed, the purpose of the interview and the use that could be made of the information provided, because this may impact its admissibility.
In the United States an Upjohn warning is given at the start of the interview. This practice is often adopted in many investigations in the United Kingdom, even where there is no involvement of US authorities at that time. The warning sets out that:
- The lawyers represent the company and not the employee/witness.
- Privilege in the interview belongs to the company and not the employee.
- The company might choose to waive its privilege and disclose matters discussed in interview to the authorities.
Upjohn warnings derive from the case of Upjohn Co v. United States,29 where it was held that the privilege that attaches to communications between a company’s lawyers and its employees is the company’s privilege, and not that of its employees. While there is no formal requirement for these warnings to be given in the United Kingdom, it is considered best practice to do so.
The witness should be reminded of the confidential nature of the interview and be told that it is a fact-finding exercise. However, where a company has decided to waive privilege prior to the interview and provide details to the authorities, the Upjohn warning may need to be strengthened. The company could consider whether to give a more formal caution, similar to that given by the police when investigating suspects, although this would rarely be required (see Section 7.9). If necessary, the witness should be told that while not part of a disciplinary process, the information provided could inform a decision on whether to instigate disciplinary action.
The company should consider whether its own legal advisers can advise the witness or whether to offer to pay for separate independent legal counsel. Clearly a company cannot prevent its employees obtaining legal advice of their own volition and expense. However, it can control who can be present in an internal interview. If an authority investigation is under way, the witness may have contractual rights or rights under an insurance policy (D&O insurance) to fund independent counsel. Former employees may have an indemnification or contractual right as part of their exit package.
Those witnesses who appear to be at little risk of criminal or regulatory exposure are unlikely to need independent counsel to protect them against any risk of self-incrimination, and the provision of an Upjohn warning or a similarly worded preamble should suffice. However, a company may nonetheless offer separate legal advice to these witnesses if this would allay their concerns or ensure that appropriate advice is given (including from an employment or civil perspective). This may also assist preparation and enable them to give their best account. Moreover, it is often not easy to predict where risks may be at an early stage.
The provision of separate counsel can be particularly important where there may be a conflict of interest between the company and a witness. This can arise where a witness is at risk of criminal or regulatory investigation or where the company could be implicated in corporate wrongdoing. In these circumstances the interests of the company and the witness may not align and it would be prudent to consider suggesting independent counsel. While this might delay the interview to allow advice to be given, it ensures that the witness has had the opportunity to obtain his or her own legal advice, and depending on the facts, the use of separate counsel could make the interview more effective. However, the involvement of independent counsel could also result in the witness being less inclined to attend the interview or answer questions, although an employee would then be at risk of disciplinary action for not co-operating.
The decision when to offer independent counsel can also depend on the account given by the witness, and it may be appropriate to stop an interview if the witness gives an account that indicates that the company has a civil claim against them.
Ultimately it would be difficult for witnesses to assert that they had not been fully informed where they had been separately represented, or that the interviewer or company had taken an unfair advantage.
7.9 Conducting the interview: whether to caution the witness
Where a witness may be suspected of involvement in a criminal offence, a caution may be considered. A caution is used by police officers and other investigators when conducting interviews of suspects to ensure that any resulting account (or refusal to answer questions) is admissible in criminal proceedings.30
Section 67(9) of the Police and Criminal Evidence Act 1984 (PACE) provides that ‘persons other than police officers who are charged with the duty of investigating offences’ shall have regard to the relevant provisions of the PACE Codes of Practice, and Code C 10.1 of the codes sets out the requirement to caution.
This duty applies to SFO investigators,31 but is not restricted to state authorities and can also apply to private store detectives32 and commercial investigators who are appointed by a company to investigate its employees for the commission of criminal offences.33 Importantly, however, it does not apply in the context of an internal investigation where the sole purpose is to determine what recommendations should be made to an internal disciplinary panel.34 It is therefore unlikely to apply in circumstances where an employer investigates allegations that could give rise to disciplinary action and where the sole purpose of the investigation was to inform the company how to respond.
Where criminal offences are being considered, section 67(9) would only apply if the investigator was charged with investigating or charging criminal offences at the time.35 This scenario would arise in circumstances where the interviews had been delegated to those conducting the investigation and where they were effectively acting on behalf of a criminal authority. It would require the authorities to sanction the taking of a suspect’s account with a view to it being used in a criminal trial. In light of the authorities’ general reluctance for a company to conduct interviews with suspects, particularly when it involves obtaining first accounts, it is unlikely that this situation would arise, and therefore a caution is unlikely to be required.
7.10 Conducting the interview: record-keeping
A record can be kept of a witness interview in a number of ways. It could be audio recorded and transcribed. A verbatim record would exist, removing the risk of any challenge to the accuracy of what was said, and the recording would capture the tone and any pause or emphasis, which can often give context and allow for an overall assessment. However, it could affect the witness’s account by adding an element of formality, potentially having an unsettling effect on the interviewee and making him or her less forthcoming. More importantly, there is uncertainty over whether legal privilege would apply to a recording, particularly where the interview has been conducted as a fact-finding exercise. Even where privilege can be properly asserted it is likely to be challenged by the authorities, and where a transcript exists the authorities are likely to request a copy.
An alternative approach is for counsel to prepare a note of what the witness has said. Legal privilege is more likely to apply in circumstances where notes contain some form of legal comment or analysis. This may include the lawyer’s own impressions and assessment of the interview. Alternatively two sets of notes could be prepared, one containing the factual account and one containing the lawyer’s own views. If so, the authorities are likely to seek a copy of the factual account.
The company will need to decide whether to provide the witness with a copy of the note. Where it is likely to rely on the witness’s testimony in civil proceedings it may be helpful to agree a note at an early stage to limit any future challenge to its accuracy. This carries the risk that it may be passed on and any privilege would be waived, and may cause issues if the account is materially disputed.
Where proceedings are anticipated, there are some advantages in preparing a witness statement at an early stage. If the witness decides at a later date not to co-operate or for whatever reason he or she is no longer able to assist, the company may be able to rely on the evidence given, or compel the witness to attend and give evidence having already taken a record of the witness’s evidence. However, even if privilege can be maintained, it is likely the authorities would nevertheless seek a copy.
Legal privilege in the context of witness interviews raises a number of complex issues and a claim to privilege will be closely scrutinised by the authorities. The SFO claims that it does not want to undermine legal privilege, which is respected as a legal principle and fundamental right. However, in a speech by Alun Milford, general counsel of the SFO in March 2016,36 he made it very clear that the SFO will view ‘false’ or ‘exaggerated’ claims to privilege as unco-operative, and notwithstanding his acknowledgement that a claim may be well founded, where a company discloses details of witness accounts it will be viewed as a significant mark of co-operation. Similarly a company’s decision to structure its investigation so as not to attract privilege will be viewed as significant co-operation.
There is a risk that disclosing information relating to witness interviews could result in a waiver of privilege more generally. Ultimately the information could be shared with authorities in other jurisdictions or be disclosable in civil, or other, proceedings that may not be in the company’s best interests. The Law Society of England and Wales provides guidance to lawyers about their duty to act in the best interests of clients, including maintaining their claim to privilege.
The best position may be to conduct interviews so a claim to legal privilege can be made but to leave any decision on whether to waive privilege until the course of the investigation and interests of the authorities are more clear. The complexities surrounding privilege in global investigations is examined in more detail in Chapter 31 on privilege.
7.11 Conducting the interview: employee amnesty and self-incrimination
As a general point an employer cannot provide amnesty from criminal or regulatory action. Similarly an agreement cannot prevent disclosures to regulators or inhibit criminal investigations.
While in theory amnesty against internal disciplinary action could be offered, this is very rare. More commonly, discussions take place with a view to the employee leaving under the terms of a settlement agreement, which can include a financial settlement and avoids the employee being dismissed. Such discussions can take place ‘without prejudice’ or as a ‘protected conversation’ and therefore should not take place during a witness interview. These discussions, providing they meet the required criteria, cannot be used as evidence in unfair dismissal proceedings37 although they could be used in whistleblowing or discrimination claims (see Chapter 12 on employee rights).
While in theory it is possible for an employer to agree a certain course of action (for example, to retain an employee and waive the right to bring disciplinary action), this would not be advisable in circumstances where facts are not yet known or understood. If an amnesty is given, the employer would want to ensure that any waiver against disciplinary action related to closely defined and identifiable incidents only.
Employers also need to be wary of consistency. Where two employees have committed misconduct, allowing one employee to remain and dismissing another would support an unfair dismissal claim that the dismissed employee may bring. The employer would need to justify the difference in treatment, which may be easier to do when an employee has left under the terms of a settlement agreement.
An employee may also seek to claim privilege against self-incrimination and refuse to answer questions on that basis, particularly where he or she is advised by independent counsel. While there may be clear advantages to this approach from a criminal or regulatory perspective, this in itself would not provide a defence against dismissal. An employer could reach a decision to dismiss on the basis of the information that it had at that time and cannot compel the employee to answer questions, but the failure to do so could be seen as unco-operative and result in further disciplinary action. A dismissal for gross misconduct can still be fair in circumstances where a decision has been made not to prosecute, or where the employee has been acquitted of criminal charges for the same offence.38 Acts that could constitute gross misconduct are broader than criminal offences and the requirement that gross misconduct be ‘fair’ is lower than the criminal burden of proof.39
In addition to employment considerations, it is always possible to agree not to pursue civil claims in return for information being provided. However, as set out above, this should generally not be offered until full facts have been established.
7.12 Considerations when interviewing former employees
In general, unless there is a contractual commitment to do so, former employees can simply refuse to attend a witness interview. It is important to bear this in mind when negotiating an employee’s exit, although in reality when the employee has left there is little a former employer can do to require attendance. Former employees regulated by the FCA have a duty under Statements of Principle and Code of Practice for Approved Persons (APER) Principle 4 to co-operate with the regulators.40 It is unlikely that this provision would require them to assist with an internal investigation, and if asked, they could fairly argue that their duty was to the regulator.
Where a former employee is interviewed there are some protections available in respect of discrimination or victimisation should that impact the conduct of the interview or how he or she is treated afterwards. However, an employer should be wary of giving assurances of anonymity to a former employee in respect of information given, although this could be given on a need-to-know basis. Anonymity should not be guaranteed where regulatory obligations exist or where it could inhibit any criminal investigation, and assurances that any statement provided would not be disclosed to criminal or regulatory authorities should not be given.
Data protection issues may also arise if the account of statement given by a former employee contains personal data (see Chapter 5 on beginning an internal investigation and Chapter 11 on production of information to the authorities).
7.13 Considerations when interviewing employees abroad
Interviewing witnesses abroad can present particular difficulties in global investigations. Statutory employment law is generally of geographical rather than universal jurisdiction and, as a result, statutory employment laws of the jurisdiction where an employee is based will always apply, even if the employment contract is governed by English law. Nonetheless the governing law of the contract should also be considered as well as any rights or protections under that contract.
When planning interviews abroad it is crucial that the law and procedure relevant to those jurisdictions are considered. The employment documents (the staff handbook, for example) should be reviewed to ensure that procedures are followed. It is important to consider whether the employee or employer is covered by any regulatory rules within that jurisdiction (as well as the United Kingdom) to ensure compliance with any parallel reporting obligations.
It would be wise to engage local counsel to advise on local laws and any local culture which should factor in the interview strategy. Clearly the interviews should comply with local laws and in particular those relating to employment, data protection, privacy and privilege. While the English rules of privilege determine whether privilege applies in this jurisdiction, authorities from other jurisdictions may also have an interest, and advice should be sought on how privilege is determined in those jurisdictions.
A witness’s procedural rights in the jurisdiction where he or she is based, as well as in the United Kingdom, should also be considered. Compliance with local laws as well as collective consultation and representation rules should be factored in. In addition, the employer should take advice on whether the employee abroad is covered by UK statutory rights.
Issues often arise regarding access to documents, particularly where there are restrictions on the movement of information from one jurisdiction to another.41 Employees may also have a right to access and correct notes and files identifying them.42 The applicable directives or regulations should be considered in advance to ensure compliance with data protection laws. Data protection issues are considered in Chapter 5 on beginning an internal investigation.
Finally, maintaining confidentiality can be particularly difficult when interviewing witnesses abroad. Where witness interviews span a number of countries the risk of information being shared or leaked is greater and measures should be put in place to ensure that confidentiality remains.
7.14 Key points
Witness interviews are a key part of most internal investigations and can provide vital information for the investigation. Internal investigation interviews can take the form of either preparatory interviews at the outset of an investigation or substantive interviews likely to take place once a review of relevant material has taken place.
There can be a tension between the right of a company to investigate allegations of wrongdoing and undertake witness interviews as part of its review, and the expectations of the authorities to be consulted prior to it doing so. Enforcement agencies may seek to restrict how the interviews are conducted or suggest that they be postponed until the authorities have conducted their own investigation. Witness interviews should always be conducted in a manner that minimises the risk of contamination or prejudice.
Enforcement agencies have suggested that a refusal to provide details of the accounts given by witnesses in internal investigations could be construed as unco-operative or a breach of regulatory requirements. The provision of this information and the form in which it would be provided needs to be balanced with the need to ensure confidentiality in an investigation and to maintain legal privilege.
Where a company is investigating allegations of criminal or regulatory misconduct, it is preferable to have lawyers (internal, external, or both) present at interviews to take notes and identify the key risk areas that may arise, and to enable confidentiality and for privilege to be asserted. Where external counsel has been engaged it is preferable for them to conduct the interviews; they often bring (and, importantly, are seen to bring) expertise, objectivity and independence. Preferably there should be two interviewers to ensure all relevant information is captured.
Interviews can be recorded in a number of ways: by recording and transcribing the interview; by counsel preparing notes of the interview; and with the preparation of a witness statement. Enforcement agencies are likely to seek details of the accounts provided, and consideration should be given to ensuring legal privilege is capable of being asserted. How an interview is recorded and whether or not to provide details of the witness’s account will depend on the circumstances of each case.
Legal privilege in the context of witness interviews raises a number of complex issues, and a claim to privilege will be closely scrutinised by the authorities. There is a risk that disclosing information relating to witness interviews could result in a waiver of privilege more generally. The best solution may be to conduct interviews so that legal privilege can be asserted but to leave any decision on whether actually to assert or instead to waive privilege until later, when the course of the investigation or interests of the authorities are clearer.
When conducting the interview, counsel should be satisfied that the witness understands the basis on which he or she is being interviewed, the purpose of the interview, and the use that could be made of the information provided. While there is no formal requirement to do so, it is best practice for the witness to be given an Upjohn warning at the outset and to remind the witness of confidentiality. Where a company has decided to waive privilege prior to the interview, the Upjohn warning may need to be strengthened. It is unlikely that a formal caution, similar to that given by the police when investigating suspects, would be required.
The company should consider whether its own legal advisers can give advice to the witness or whether to offer (and to pay for) separate independent counsel, particularly where there may be a conflict of interest between the company and the witness and where the witness is at risk of criminal or regulatory investigation, or where the company could be implicated in corporate wrongdoing.
In general, a company cannot provide a witness with amnesty from criminal or regulatory action. Similarly an agreement cannot prevent disclosures to regulators or inhibit criminal investigations. Amnesty against internal disciplinary action is rare and while it is always possible to agree not to pursue civil claims in return for information being provided, this should generally not be offered until the full facts have been established.
Interviewing witnesses abroad can present particular difficulties in global investigations. It is crucial that the law and procedure relevant to those jurisdictions are considered and that any relevant regulatory rules are complied with. It would be wise to engage local counsel to advise on local laws, regulatory rules and culture to ensure compliance. Any applicable directives or regulations surrounding access to documents should also be considered in advance to ensure compliance with data protection laws. Measures should be put in place to seek to ensure confidentiality.
- Solicitors Regulatory Authority Code of Conduct, Chapter 10.
- Also see Prospectus Rules and Disclosure and Transparency Rules.
- Part 7 Proceeds of Crime Act 2002 and Part 3 Terrorism Act 2000.
- Speech by Jamie Symington, Director in Enforcement (Wholesale, Unauthorised Business and Intelligence), FCA, at the Pinsent Masons Regulatory Conference 2015 on 5 November 2015.
- Speech by Jamie Symington, Director in Enforcement (Wholesale, Unauthorised Business and Intelligence), FCA at the 2nd Annual GIR Live, London, 28 April 2016.
- Speech by Alun Milford, SFO General Counsel, at the 14th Annual Corporate Accountability Conference, Congress Centre, London, 9 June 2016 (as reported by GIR on 10 June 2016).
- David Green QC, Director of the SFO, speaking at the GIR Roundtable: corporate internal investigations, 27 July 2015.
- SFO/CPS Deferred Prosecution Agreements Code of Practice, Crime and Courts Act 2013.
- Speech by Alun Milford, SFO General Counsel, to an audience of compliance professionals at the European Compliance and Ethics Institute, Prague, on 29 March 2016.
- Serious Fraud Office v. Standard Bank Plc (Now known as ICBC Standard Bank plc): Deferred Prosecution Agreement (Case No. U20150854).
- Speech by Ben Morgan, Joint Head of Bribery and Corruption, SFO, at the Managing Risk and Mitigating Litigation Conference 2015 on 1 December 2015.
- SFO v. XYZ Limited, Deferred Prosecution Agreement (Case No. U20150856).
- FCA Enforcement Guide, para. 3.26.
- Speech by Jamie Symington, Director in Enforcement (Wholesale, Unauthorised Business and Intelligence), FCA, at the Pinsent Masons Regulatory Conference 2015 on 5 November 2015.
- SUP 10.13 Changes to an approved person’s details.
- Lennards Carrying Co and Asiatic Petroleum  AC 705, Bolton Engineering Co v. Graham  1 QB 159 (per Denning LJ) and R v. Andrews Weatherfoil 56 Cr App R 31 CA.
- Tesco Supermarkets Ltd v. Nattrass  AC 153.
- Section 1 Corporate Manslaughter and Corporate Homicide Act 2007.
- Speech by Alun Milford, General Counsel, SFO, speaking to an audience of compliance professionals at the European Compliance and Ethics Institute, Prague on 29 March 2016.
- Speech by Jamie Symington, Director in Enforcement (Wholesale, Unauthorised Business and Intelligence), FCA at the 2nd Annual GIR Live London, 28 April 2016.
- Speech by Mark Steward, Director of Enforcement and Oversight at the FCA, at the 14th Annual Corporate Accountability Conference, Congress Centre, London, 9 June 2016 (as reported by GIR on 10 June 2016).
- Speech by Ben Morgan, Joint Head of Bribery and Corruption at the SFO, at the Global Anti-Corruption and Compliance in Mining Conference 2015 on 20 May 2015.
- David Green QC, Director of the SFO, speaking at the GIR Roundtable, 27 July 2015.
- Akzo Nobel Chemicals Ltd and Akcros Chemicals Ltd v. European Commission, Case C-550/07 P.
- Schedule 1 Data Protection Act 1998.
- Principle 4 of the SRA mandatory principles.
- Chapter 11 SRA Code of Conduct.
- Chapter 11 SRA Code of Conduct.
- Upjohn Co. v. United States, 449 U.S. 383 (1981).
- Code C, 10.1 PACE Codes of Practice.
- R v. Director of the Serious Fraud Office, ex p Saunders  Crim LR 837.
- Bayliss (1993) 98 Cr App R 235.
- Twaites and Brown (1990) 92 Cr App R 106.
- R v. Welcher  EWCA Crim 480.
- R v. Seelig  1 WLR 148 and Joy v. Federation against Copyright Theft  Crim LR 588
- Speech by Alun Milford, SFO General Counsel, to an audience of compliance professionals at the European Compliance and Ethics Institute, Prague on 29 March 2016.
- Section 111A Employment Rights Act 1996.
- Okhiria v. Royal Mail UKEAT/0054/14/LA.
- A dismissal for gross misconduct is ‘fair’ if the employer believed that the employee was guilty of gross misconduct, if it had reasonable grounds on which to base that belief, and if it had carried out as much investigation as was reasonable in the circumstances of the particular case: British Home Stores Ltd v. Burchell  UKEAT 108_78_2007. In a criminal trial the burden of proof required is to prove guilt ‘beyond a reasonable doubt’.
- The Statement of Principle 4 (see APER 2.1A.3 R) is in the following terms: ‘An approved person must deal with the FCA, the PRA and other regulators in an open and cooperative way and must disclose appropriately any information of which the FCA or the PRA would reasonably expect notice.’
- Directive 95/46/EC on the Protection of Individuals with regard to the Processing of Personal Data sets limits on the collection and use of personal data within the EU. The provisions were implemented into UK legislation via the Data Protection Act 1998 (passed 16 July 1998).
- The Data Subject’s Right of Access to Data, Section IV, Article 12 Data Protection Directive 95/46/EC.