Dawn Raids this week: be prepared

The London offices of BP and Shell were raided on Tuesday by the European Commission.  Statoil ASA in Norway also confirmed that they had been raided and were under investigation.  At the same time, our own panel of legal and technical experts was gathering to discuss the second in our series of webinars concerning electronic evidence in Europe entitled ‘Dawn Raid Survival’.  The topic and timing for this discussion could not, indeed, have been more appropriate…   If you did miss this session, there is a summary below or if you would like to listen to the webinar again in full, please see below:

Next webinar: Given the success of our last two sessions, I urge you to join us for our third webinar in this series on the 28 May at 14:00 CET: “Electronic Discovery: A Foreign Concept in Europe?”.

We will be joined by Claire Bernier (partner at Altana, Paris), Santiago Gomez Sancha (Director of Information Services, Uria Menendez, Madrid), and Tina Shah (Electronic Evidence Consultant, Kroll Ontrack, London).

Dawn raid survival

In Tuesday’s raids the Commission had concerns the companies involved may have colluded in reporting distorted prices to a Price Reporting Agency in order to manipulate the published prices for oil and bio-fuel products.  For any suspected activity which negatively impacts on competition within the European marketplace, both the Commission and National regulatory authorities have power to intervene directly and ‘raid’ companies for evidence the activity.

How raided companies should respond in such volatile and high-stress situations, and what practical steps they should take was discussed by our panel which included: Dr Helmut Janssen (partner at Luther in Brussels and Dusseldorf), Julie Catala Marty (partner at Bird & Bird, Paris), and Rainer Ziener (Computer Forensic Consultant at Kroll Ontrack, Stuttgart).

Some of the main themes discussed were as follows:

Whilst the powers of the European Commission and National Authorities are broadly the same, important differences exist.  Helmut and Julie compared notes on the specifics of both the French and German authorities as compared to the Commission’s practices.  For example, Helmut pointed out that whilst the EU Competition authorities are authorized to enter premises to copy relevant information, German competition authorities have the right to physically remove property from the premises (including hard drives, phones and computers) for later analysis at the authorities’ office.  Companies should therefore take local legal advice as to how to respond in each case.

Julie provided a list of essential and practical tips companies should follow in the event of a dawn raid:

1. Contacting a legal representative is the first thing to do, and the company should request that the investigation is not commenced before an advisor is present.  Mr Dirk van Erps (Head of Forenisc IT Group, Cartel Directorate of DG Comp) who was in attendance at our webinar clarified that the Commission would generally wait up to 20 minutes for a representative to arrive at the raided premises before commencing the investigation, but not longer.
2. Legal advisers should check the scope of the investigation, in particular for details of the products concerned, the type of behavior and the time period under investigation.
3. The company must keep track of the information the authorities are taking so they can collect their own copy and the legal teams can start reviewing it and organising their defence as soon as possible once the authorities have left.
4. Informing the staff of what is going on is of paramount importance.  They should stay calm, not answer questions beyond the scope of the investigation or comment outside the company.  They must not destroy or delete documents and must remember that the company is under a duty to cooperate fully.
5. It is also was important to keep the business running and Julie suggested the authorities could be asked if it is possible to use equipment needed to continue basic operations.

The panelists also discussed the difficulties that arise when legally privileged information falls into the hands of the authorities and how to handle the restitution of this information.

In terms of the IT aspects of raids, Rainer Ziener of Kroll Ontrack emphasized that different types of data storage media and IT architecture make the job of extracting information quickly quite challenging.  Being prepared ahead of a raid by having a data map and inventory of hardware was strongly recommended.  This ensures both that cooperation with the authorities can take place, but also facilitates the rapid formulation of a legal strategy and defence once the authorities have left.  It could take significantly more time to assist a company after a dawn raid if it does not have a detailed knowledge of the firm’s IT infrastructure.

Julie emphasized that Mock Dawn Raids help reduce the risk of mistakes during an actual raid (which can be extremely costly).  They test the reflexes of the business and help assess the risk of company infringing the law.