Keith Krakaur and Ryan Junck, Skadden, Arps, Slate, Meagher & Flom (UK) LLP
This is an extract from the third edition of GIR's The Practitioner’s Guide to Global Investigations. The whole publication is available here.
The purpose of witness interviews
Witness interviews form an integral part of most investigations, whether internal or regulator-facing, and an interviewer’s ability to extract facts from witnesses is a critical part of any successful investigation. The purpose of witness interviews is multi-faceted but generally includes scoping the investigation, understanding the facts and issues at play, and assessing the accountability of individuals and possible defences for the company and its employees. Broadly speaking, witness interviews in internal investigations generally consist of preliminary interviews with individuals who are able to provide background facts and identify likely sources of information and documents, and substantive interviews focused on the key factual issues. This chapter will discuss issues to be considered when preparing for and conducting witness interviews in the United States or in relation to a US internal investigation.
Need to consult relevant authorities
Witness interviews may be conducted in the United States without consulting government authorities; however, when US-related investigations require interviewing witnesses in non-US jurisdictions, the key issues may include whether it is permissible under local laws to conduct witness interviews and whether restrictions or regulations apply to any interviews that are conducted. Labour laws and employment-context data protection laws may limit the investigation team’s ability to conduct witness interviews in some jurisdictions. For example, labour laws in some jurisdictions may require consulting with local employee representatives, including union committees or works councils, before initiating witness interviews. Local laws may also dictate how counsel is able to interact with employees who have retained independent legal counsel.
US employment agreements and corporate policies typically obligate employees to co-operate with a company’s investigations, and employees may face disciplinary action, including potential termination, for failing to co-operate. Although employees in the United States are free to obtain independent legal advice in the face of a potential interview, they are nonetheless obliged to co-operate with their employer and its counsel. Indeed, a recent appellate court decision affirmed an employer’s right to terminate an employee for refusing to co-operate with an internal investigation. This means companies have broad authority to dictate when and where interviews take place and to impose rules governing the attendance and participation of an employee’s counsel. Depending on the situation, companies may provide legal representation for employees to ensure they have fully considered their legal exposure and are well prepared for interviews. A company may be required to advance legal fees and expenses to certain of its employees depending on the laws in a company’s state of incorporation and its own by-laws or internal policies.
Identifying witnesses to interview
Investigators should begin identifying potential interviewees during the early stages of an investigation while document collection and review is under way. It may be beneficial to include lower-level employees in the interview plan because they may have basic factual information or insight into systems and controls that can provide context for the investigation. The initial list of interviewees need not be exhaustive as the first few preliminary interviews are likely to generate additional witness names.
Third-party witnesses, such as former employees, customers or contractors are not likely to be bound by the same confidentiality obligations as company personnel and may refuse to co-operate with the investigation unless they are contractually compelled to do so. With respect to former employees, interviewers should consider whether the employee left the company on unfavourable terms or otherwise has an incentive to disclose the existence of the investigation to other parties, including competitors, the media or enforcement authorities.
When to interview and in what order
When sequencing interviews, investigators often start with scoping interviews of individuals who have relevant background knowledge, who can explain relevant corporate processes and practices, and who can identify key personnel who may be involved in the allegations. Thereafter, investigators typically interview fact witnesses in ascending order of involvement in the alleged misconduct. However, investigators may consider interviewing the target or targets of the allegations early in the interview process if there is a high risk that other interviewees may tip them off, if they appear likely to leave the company in the short term or if the nature and timing of the investigation call for obtaining such information quickly.
If there is an identified whistleblower, an effort should be made to interview that person at the outset of the investigation to better understand the allegations, obtain key documentation and establish a dialogue. Such early discussions should be viewed as an opportunity to obtain whatever relevant information the whistleblower has and to demonstrate the company’s commitment to investigating the allegations.
Planning for an interview
When planning for an interview, investigators should carefully review relevant documents and prior witness statements. Interviewers should also determine which documents to question witnesses about and in what order. Typically, witnesses should be shown only emails or parts of email chains where they are recipients, senders or otherwise copied on the chain to preserve the confidentiality of the communications. In some circumstances, it may be strategically beneficial to share a general interview agenda and documents to be discussed with the interviewees in advance of the interview. However, this practice may detract from the interviewer’s flexibility to raise and explore new issues during the interview and increases the risk the interviewee will tip off other key witnesses. In addition, this method gives witnesses ample opportunity to prepare their version of the story and removes any element of surprise that may help investigators uncover the facts. If, however, the subject matter of the investigation is already public or the witness is aware of the existence of the investigation, pre-interview review of documents to be discussed during the interview, in some instances, can be efficient.
Conducting the interview
Interviews are typically conducted by an attorney lead interviewer and a note-taker. Company management or in-house counsel may also participate in the interview if their participation is likely to encourage the witness to be more co-operative. However, it is not unusual for investigative counsel to request that no one from the company attend the interview to avoid the appearance of intimidating the witnesses. Certain third parties may also attend the interview where appropriate, such as accounting or forensic consultants retained by external counsel pursuant to a Kovel agreement, which ensures that information shared between the attorney and the consultant does not cause a waiver of the attorney–client privilege. The attendance of third parties outside this construct may, however, cause waiver of the privilege.
Non-attorneys, such as in-house auditors or investigators, may also conduct witness interviews; however, non-attorneys must act under the direction and instruction of in-house or external legal counsel to preserve the attorney–client privilege applicable to investigations performed in connection with providing legal advice to the company. Case law in the United States can vary significantly from court to court with respect to the application of the attorney–client privilege and the work-product doctrine to non-attorney communications and work-product. For example, some courts have taken a broad view of the attorney–client privilege, extending it to any ‘communications intended to keep the attorney apprised of business matters’ if those communications ‘embody an implied request for legal advice based thereon.’ Other courts have adopted a narrower interpretation. They have insisted on identifying a single primary purpose for any analysis of attorney–client privilege. ‘Where business and legal advice are intertwined, the legal advice must predominate for the communication to be protected.’ Accordingly, when non-attorneys conduct witness interviews, companies should carefully consider whether the interviews and subsequent work-product are likely to be protected by the attorney–client privilege or the work-product doctrine.
Typically, witness interviews are not tape-recorded to avoid potential confidentiality and privilege issues. Instead, interviewers should be accompanied by a note-taker who takes careful notes and subsequently prepares a memorandum that summarises what was learned during the interview. The interview memorandum should include the interviewers’ observations and impressions about the witness’s statements and credibility. Interview memoranda that contain a verbatim account of the interview without the mental impressions of counsel are less likely to be protected by the attorney work-product doctrine, which protects an attorney’s mental impressions and strategic preparation and not a witness’s factual statements. Even so, under certain circumstances, so-called ‘fact work-product’ (as distinct from ‘opinion work-product’) may be entitled to protection to the extent the fact work-product reflects the thought processes of counsel.
In parallel cross-border investigations or prosecutions, the application of the attorney–client privilege or the work-product doctrine may differ. For example, Germany’s constitutional court recently declined to recognise the attorney–client privilege where external counsel, based in the United States, was retained solely to conduct an internal investigation and not for the purposes of criminal defence.