ELECTRONIC DISCLOSURE
Obstructing a commission investigation will lead to serious penalties but technology could help limit the damage
Alexandra Harrison, Legal Consultant, UK Region
In a much talked about case, Sony, one of the three professional videotape producers involved in a price-fixing cartel (Case No: Comp/38.432) received a 30% uplift in their fine because an employee was caught shredding documents during the inspection. But is there a way to minimise or avoid the damage caused by attempts to destroy, falsify or conceal evidence either by a collective or by an individual employee acting alone?
More and more competition lawyers are embracing legal technology in order to access, filter and review large quantities of documents. In the race for immunity, this helps them to focus their attention on responding ‘genuinely, fully, on a continuous basis and expeditiously’. Technology also helps lawyers to find key evidence quickly, which in some cases may be considered to be of such ‘significant added value’, that they can secure lenient fines for their clients. The same efforts may be applied to recover any evidence which appears to be ‘lost’.
This article considers some of the ways in which companies might recover from embarrassing or potentially incriminating situations, but also how they can generally reduce their exposure to risk, costs and fines associated with investigations.
Undoing Destruction
For years, document destruction has been a very tender subject faced by corporations and the shredder has gained a reputation that is synonymous with underhand behaviour. In a wide variety of cases, there has been much hype about companies which were thought to have shredded key documents and on some occasions the media has jumped to conclusions about companies which have destroyed copies of interesting documents. While some of this attention may be justified, managing the public profile of a company which has destroyed information can be assisted by looking towards technology.
Most documents are created electronically, which means that every hard copy destroyed is likely to have an electronic counterpart, which may be recovered relatively quickly to put forward as evidence. While it would not be possible to restore handwritten comments placed on hard copies, and recognising that recovery of the evidence would be subject to the availability of the electronic file, this type of gesture may create enough goodwill to balance the aggravating features of the case and temper the likely increase that could be levied.
Gone, but not forgotten
It is a waning misconception that the ‘Delete’ key will send unwanted or harmful material to a place where it cannot be found or retrieved. Experts in the field of forensic computing can unlock the inner workings of computer systems and present cogent evidence suggesting guilt or innocence, depending on the circumstances of the case. In particular, a process known as “imaging” ensures that all parts of a particular system or type of media are available for inspection. This includes the parts of a device on which deleted items are stored. Subject to the availability of a device and the extent to which deleted data may have been overwritten, it is normally possible to gather deleted evidence, including vital metadata that might show when the document was created or edited, among other facts.
Forensic data recovery may also be carried out on broken drives and tapes, even where the damage may appear to render the evidence irrecoverable. Devices which may have been dropped, kicked, smashed, run-over, burned or flooded, in any circumstances, can often yield sufficient evidence to build a case. What this means for the company with a rogue employee, is that it can renounce the actions of the individual and agree with the regulators how they will seek to deliver the evidence which is lost.
Of course, the credibility of this approach is likely to be placed under scrutiny, which is why companies may consider engaging a neutral third party. This not only bolsters the integrity of the process, but also reduces the risk of mis-collection of the evidence and can alleviate the pressure which might be placed upon in-house technical teams.
Using the correct approach can prevent spoliation of evidence, but the collection of this evidence also opens up legal considerations. Dependent on the rules of the jurisdiction legal advice should be sought in relation to ancillary legal issues including privacy, data protection and the legality of such action. Particular care should be taken when managing multi-jurisdictional collection from a global company.
Prevention
By taking preventative steps to preserve evidence as part of your quick and co-ordinated response you can protect your position, ultimately saving costs.
Even before an investigation is in contemplation, there are ways to potentially minimise or avoid the impact of a regulatory investigation by ensuring that legal teams, IT and compliance are working together on a strategy to control your exposure. It is important to ensure that all employees are aware of the rules around document destruction and their obligations in respect of document retention. It is also crucial that your employees are compliant and that policy and practice are aligned.
When updating or revising retention and destruction policies, consider how a regulatory investigation would impact on the logistics of accessing the relevant information. Good planning in anticipation of an investigation can help to reduce business disruption, allow for a swift response, and avoid as much as possible any confusion that could lead to accidental or non-accidental data destruction.
Conclusion
Using technology as part of a co-ordinated response places you in the best position to secure immunity, leniency or negotiate a settlement. Whilst prevention is always better than cure, this is not always realistic. At least if you build technology into your strategy and remember the range of capabilities it brings, you can control your exposure and could potentially mitigate the damage.
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