Internal investigations - raising the bar

Investigations have been getting a bad name recently. From the Post Office to Red Bull to Nigel Farage’s banking arrangements, internal reviews have been criticised - rightly or wrongly - for going soft.

The Post Office enquiry has over recent weeks brought into sharp focus the ethical considerations for in-house and external lawyers, but also the critical importance of independence and transparency in internal investigations. In March 2024 the SRA issued draft guidance on investigations, designed to help raise the bar. It is a relatively short document, but it seems to me to be helpful reading, bringing out many of the key points in managing such processes well.

First, scoping the review with clear terms of reference. There is always a difficult balance here. Too narrow and the report can be labelled a whitewash. Too broad and the process becomes unwieldy and drawn out. But, as the guidance notes, the key is clarity.

Second, independence. It's very common for lawyers with strong existing relationships with the entity concerned to conduct internal investigations. That can make good sense with highly sensitive issues, but a little distance often helps. Critical, of course, is not only the fact of independence in the conduct of an investigation, but the perception of independence. The appearance of close existing ties between investigators and those subject to investigation can all too easily undermine much of the value of the exercise.

Third, an effective process. This ranges from thoroughness in document reviews, to candour and fairness in the process (notably ensuring subjects of the investigation are properly supported and, as appropriate, independently represented), to bringing in experts, to proper and fair disclosure of the outcome. Increasingly, there is a demand for transparency of such reviews. Seeking to hide, for instance, behind claims of privilege can - as we have seen in the Post Office - backfire horribly.

Conducting investigations, particularly in the public eye, is becoming increasingly challenging. As the SRA guidance indicates, poorly managed investigations undermine the value of the process, can reflect poorly on the profession, and may lead to SRA breaches in themselves. It’s a good time to reflect further.