While monitoring recent trends and developments in the field of dispute resolution, Roschier has identified the ever-increasing importance of criminal law in the business environment. In many countries, an increased emphasis on compliance and anticorruption efforts has made criminal law a new business concern, with investigative authorities redirecting their resources at areas of business that previously had no contact with criminal law. Regrettably, it has also become more common for some companies to initiate criminal proceedings against their counterparties in an effort to advance their interests in commercial disputes, for example for fact-finding or data collection purposes.
In today's world, where news travel fast and public opinion can be easily influenced through social media, a criminal investigation initiated by a company against a competitor or the adverse party in an actual dispute can have unpredictable consequences. Acknowledging this fact and preparing for it in advance is likely to mitigate criminal law related risks significantly.
There are many ways for companies to protect themselves in advance. For example, companies can create clear and easily accessible internal compliance and ethics policies and guidelines. Policies and guidelines should be supported by consistent messages from the top and middle management ("tone from the top" and "tone from the middle"). In addition, companies should identify, measure, and monitor the specific risks relevant for their business and allocate resources to control such risks (for example, third party due diligence when entering into contracts with new business partners).
Sometimes, however, even the most prudent precautions are not enough, and a company becomes involved in criminal proceedings. If that happens, it is imperative to take the matter seriously from the outset, to conduct the necessary internal investigations, to prepare an initial legal assessment of what has happened, and to document these steps carefully. This can become important as the case develops, for example, concerning imposition of a possible corporate fine.
It is advisable that a company involved in a criminal investigation retain external counsel specialized in criminal law as early as possible to plan the company's overall defense approach, to assist persons of interest in their dealings with investigative authorities and, in general, to make sure that the company's rights are not compromised during the investigation.
External counsel can also assist in securing appropriate treatment of confidential information, in case-related interaction with the media and other interest groups, and in observing applicable disclosure obligations for listed companies.
Useful tips on how to protect the company against criminal law related risks
- Clearly define and communicate the company's tolerance for engaging in operations with elevated compliance risks.
Make sure that policies and guidelines are accompanied by sufficient training.
Do not let questionable behavior go unchallenged.
Conduct third party due diligence when entering into a new partnership.
Conduct compliance due diligence in connection with significant mergers & acquisitions.
Prepare for potential investigations by drafting internal guidelines on how to react in case your organization becomes a party to criminal proceedings (for example, specify who is responsible for the initial contact with the authorities, or contacting the legal department).
Find out what has happened, conduct an initial case assessment based on your findings, and document these steps carefully.
Retain outside counsel specialized in criminal law as early as possible and let them assist you with all communication with the investigative authorities and the media.
Remember that how you communicate about the case during the proceedings is in many respects, most importantly reputation-wise, as important as the actual outcome of the case.