As we move tentatively out of the shadow of Covid-19, being mindful that a second wave or local lockdowns could still happen, what lessons can we take forward to ensure investigation work continues in an unpredictable environment?
We know that, despite the operational challenges of working in a remote environment, the regulatory obligations on firms have not changed. The Financial Conduct Authority (FCA) still expects firms to act within a reasonable timeframe to identify risks and/or potential misconduct. Indeed, firms are facing an increased risk of employee misconduct as a result of the remote working arrangements. This is not to forget those investigations which were already on foot and have been paused or delayed due to the challenges of the pandemic.
Whilst many firms in March/April, as the realities of a complete lockdown became apparent, were considering delaying existing or potential investigations until the circumstances returned to normal, the outlook now is very different. Whilst some firms are back in the office, a substantial proportion of firms will see many employees, including its legal and compliance teams, working remotely into 2021. It is therefore not practical or advisable to pause investigations in the medium term as this could lead to increased litigation and regulatory risks.
We have learnt a great deal from the last few months and there are several ways to mitigate the risks and potential challenges of carrying out investigations remotely. We share some of this experience below.
Subject or witness interviews form a key aspect of most investigations, particularly if the investigation needs to consider the credibility of a subject or to test differing accounts of a situation. This activity, however, potentially poses the greatest challenge/risk in a remote environment. Video conferencing or telephone conferencing is widely available and accessible but it is undoubtedly more difficult to build rapport with a subject over video conference. It is also more difficult to evaluate the soft cues given by an interviewee such as demeanour, hand gestures and body posture.
Other considerations include:
Some regulators are now considering re-starting in person interviews. Each face to face interview should be subject to individual risk assessment with consideration given to the interview environment as well as the individual circumstances of each person attending. Firms may wish to choose a neutral venue which is easily accessible by all parties.
The pandemic situation has accelerated technological change and attitudes along with our ability to carry out investigations remotely in an effective way. As we move back to an environment where we can carry out face to face interviews and meetings, we can utilise the lessons learnt to provide a more agile and adaptable investigations model. Firms now have more options open to them in the investigation process, as long as appropriate steps are taken to mitigate the risks and pitfalls discussed above.
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