If your business is suspected of behaving unlawfully, whether that involves breaching business regulations, competition law or corporate fraud law, it may be subject to a dawn raid. Dawn raids can happen out of the blue, so it is imperative that businesses understand exactly what a dawn raid is, what to do if you are subject to one, and which authorities could carry them out.
In this post, we will answer all of these key questions, exploring the meaning of dawn raids and explaining what you should expect if your business is investigated in this way.
What is a dawn raid?
A dawn raid is an unannounced inspection of a business or domestic premises to secure evidence on suspicion of infringement or breach of law. Usually carried out in the early hours of the morning, hence the name “dawn raid”, this procedure can be used to investigate a range of crimes.
These crimes could include:
- An infringement of competition law, such as price fixing or tender rigging, as outlined by the Competition Act of 1998.
- Failure to prevent bribery, as stated in the Bribery Act 2010.
- Failure to prevent tax evasion, as stated in the Criminal Finances Act 2017.
These raids can be carried out at various branches of a single company, across multiple locations, and sometimes even spanning countries. After Covid-19, it has become increasingly common for employees to work from home and so authorities may even conduct dawn raids at domestic premises if they suspect that evidence could be obtained from there.
The focus of a dawn raid is typically to obtain evidence in the form of electronic files and data, however other relevant documentation and evidence are well within the scope of the investigation.
Which organisations are authorised to conduct a dawn raid?
Search warrants for a dawn raid can be obtained by various regulatory authorities, including:
- Serious Fraud Office
- Financial Conduct Authority
- Competition and Markets Authority
- Information Commissioner’s Office
- Health and Safety Executive (HSE)
The varying nature of the crimes that can constitute a dawn raid, along with the difference of powers and rights of each authority, will mean that no two raids will be exactly the same..
As of December 31st 2020, the Brexit Transition Period ended. The UK and EU are now two completely distinct legal territories governed by different regulations. Therefore, the European Commission no longer has any jurisdiction to carry out dawn raids within the UK. Additionally, they cannot direct authorities, such as the Competition and Markets Authority, to conduct these raids on their behalf.
How can you be sure the dawn raid is legally compliant?
A dawn raid can cause significant stress on all areas of a business. Ensuring that it is only conducted in a lawful manner will make sure the interests of the business are protected. The regulatory authority carrying out the raid is responsible for ensuring the raid is legally compliant. However, as a business, you should also understand what makes a dawn raid legally compliant and ensure that staff members are adequately trained with an internal response strategy to implement in the event of a raid.
Here is how a dawn raid should typically unfold:
First and foremost, in order to conduct a dawn raid on any business, a valid warrant must be presented before the search commences. This warrant must accurately identify the premises on which the raid is to be conducted along with the inspectors and authorised personnel that will enter the premises. In the event there is no one on the premises, a copy of the warrant must be displayed in a prominent and visible place. This warrant will outline the procedural rules that will apply to the raid along with the scope of the authority’s powers.
Once the business and senior members of the staff have been informed of the arrival of the inspection team, it is imperative that the business’ legal counsel be contacted immediately. The inspectors can be requested to wait for the legal team to arrive. However, they are not legally obligated to wait and may insist on proceeding – warrants will typically be valid for a limited duration, so time is of the essence. In the event that the legal team cannot be on the premises immediately, the inspectors may agree to speak with them on the phone before they begin the process.
In the event of a dawn raid, routine document destruction procedures should be halted. It is important that all employees be instructed not to destroy or delete any documentation, as this may be treated as a criminal offence and could result in significant sanctions for the employee and the business. While conducting their search, inspectors may question employees with regard to processes and procedures, such as practical questions on the location of certain documents or passwords for computers. But inspectors do not have the legal authority to interview or interrogate employees, and questions must be strictly factual.
Legal Professional Privilege (LPP) authorises lawyers to protect documents from disclosure to another party, such as the Court or HMRC. This will keep information that clients have revealed to lawyers in confidence protected. Documents that are protected by LPP are not within the scope of the warrant issued for a dawn raid. It is prudent that a member of staff is aware of documents that are protected by LPP and ensure that inspectors carrying out the raid do not include them in evidence. However, if an agreement can not be reached, the documents must be placed in a sealed envelope while the issue is being resolved.
Establishing a team of employees known as “shadowers” to follow the inspectors at all times and carefully note the evidence being taken will help the business assess the risk faced in real time. The shadowers can take note of specific keywords searched on hard drives as well as potentially incriminating documents that have been taken. These employees should be highly aware of the rules and procedures surrounding a dawn raid and should be able to intervene if an inspector tries to review or copy documents that are irrelevant to the inspection or are legally protected.
How long can a dawn raid last?
A dawn raid can last as long as three full days. In the event that the regulatory authority carrying out the raid has not completed its investigation of the premises, the inspectors may place security seals across doors, cupboards and important hardware such as computers. The breach of these seals during an ongoing raid may be considered a criminal offence and should be treated with the utmost care and security. Businesses may want to put up warning signs and station security personnel outside these areas to prevent any interference or tampering with evidence.
If a dawn raid continues for longer than a day, a meeting should be held between senior members of the business and the inspectors to discuss if the raid has been completed or if documents and evidence must still remain sealed. The inspectors should also provide a list of evidence, including documents and hardware, that have been taken from the premises. If this list is not provided, it is important that the staff of the business request it. This will ensure that both parties are aware of the log of evidence and there are no disagreements on what has been removed from the premises.
How can we help?
We hope you now feel confident with the meaning of a dawn raid and understand that dealing with a dawn raid can be highly complex and drawn out, depending on the scope of the investigation. This is especially the case when multiple raids are carried out simultaneously across various business locations. Therefore, it is crucial that you have specialist legal support from the start.
St Pauls Chambers’ corporate fraud and regulatory barristers are highly experienced with cases where a dawn raid has formed part of the investigation. Please get in touch with us today to learn more about how we can help your case.