Following the success of our recent webinar, “Mastering Corporate Investigations: managing risks and protecting reputation in a regulatory landscape”, the Fox Williams investigations team is launching a focused insight series to explore the practical and legal challenges that arise during corporate investigations.
We’re kicking off the series with a Q&A addressing some of the most frequently asked questions posed by our clients and attendees. In this article, our investigations experts Joanna Chatterton, Sona Ganatra and Kofi Mills-Bampoe cover issues such as privilege, suspension, whistleblowing, and regulatory reporting.
Q1. What should we consider when deciding whether to run an internal investigation or instruct external counsel?
Joanna Chatterton, Head of Employment
The starting point is objectivity. If you’re investigating a senior executive or a matter with significant regulatory, reputational or employment implications, there’s a strong case for instructing an external independent lawyer. This not only ensures fairness, but it shows a willingness to open yourself to scrutiny. That said, lower-risk matters (i.e. employee grievances) can often be managed internally, provided those handling it are properly trained and senior enough to give an independent view.
Q2. When should an investigation be conducted under privilege and what are the risks if we do?
Kofi Mills-Bampoe, Disputes Partner
Privilege should be in place from the outset where there’s a risk of litigation or regulatory proceedings. It allows you to manage disclosures and limit exposure. But there’s a catch – privilege can’t be assumed and must be carefully preserved. One mistake we see is trying to claim privilege retrospectively or losing it by sharing findings too widely. The bigger risk is running a privileged process then realising you can’t rely on it in an employment or regulatory context without waiver.
Q3. Can we suspend an employee accused of misconduct without risking an unfair dismissal claim?
Joanna Chatterton
Only if suspension is justified in the particular circumstances given the recognition of courts and employment tribunals that it can cause significant damage to an employee’s reputation (internal and external), impacting relationships with colleagues and clients. Even if your contract allows it, suspension must be reasonable and proportionate. You’ll need a clear rationale for why the suspension is necessary e.g. to prevent interference with evidence or to protect others and it is helpful to demonstrate you have considered alternatives. It’s essential to to keep the suspension under review. Poorly handled suspensions can, and do, result in constructive unfair dismissal claims.
Q4. At what point do we need to notify the FCA or another regulator?
Sona Ganatra, Regulatory Partner
Sooner than you think. Many notification obligations arise the moment you suspect there’s an issue. For example, under certain FCA rules, you may be required to notify immediately if there’s a reasonable belief that misconduct may occur. Delaying and not being open with the regulators can damage credibility and may give rise to further regulatory breaches. Always seek advice on when notification requirements are triggered and be mindful of competing or contradictory requirements from different regulators.
Q5. If the issue may involve criminal conduct, should we investigate or report it?
Sona Ganatra
This is a common dilemma. You must first ask: are you under a legal duty to report (e.g. money laundering)? If not, the choice is more nuanced. In many cases, it may be better to let the relevant authority investigate. If you do investigate, you must take care not to interfere or prejudice a potential criminal investigation. If in doubt, speak to a lawyer experienced in criminal investigations.
Q6. How do we avoid waiving privilege during the investigation process?
Kofi Mills-Bampoe
Be disciplined. Limit the investigation team to those who strictly need to know. Route all external experts through lawyers. Avoid informal briefings and never circulate sensitive material outside the core group. Even something as innocuous as a summary update to a shareholder can waive privilege if you’re not careful. Structure and consistency are everything.
Q7. Should we share our findings with the complainant or accused?
Joanna Chatterton
This is where privilege and fairness collide. If you’re disciplining an employee, they should know the case against them. If you withhold the report’s findings, you may undermine due process and trigger claims. One way to manage this is to conduct two processes: the privileged legal investigation and then an open employment process with its own evidence gathering.
Q8. What if we want to resolve a matter quietly—can we settle without investigation?
Kofi Mills-Bampoe
You can, but be careful. If the individual is senior, or the conduct is serious, failing to investigate can itself lead to claims from other employees, regulators or even shareholders. Always record your rationale. In sensitive cases, board-level oversight and external legal input are advisable before any agreement is reached.
Q9. How do we demonstrate we’re fostering a speak-up culture—without opening the floodgates?
Joanna Chatterton
Experience suggests introducing speak up channels, including anonymous reporting facilities does not open the floodgates. It is helpful to have the mindset that speaking up helps nip issues in the bud early, manage risk, and save time and cost in the long-run. It’s about creating psychological safety by ensuring there is no retaliation and signalling that speaking up is welcomed and issues are taken seriously (recognising that’s challenging where reports may be anonymous and matters highly sensitive). Where employees don’t think reports are being taken seriously and can’t see change this is what drives whistleblowers to the press or the regulator. You want to be the first to know if something’s wrong, not the last.
Q10. How can we manage and mitigate legal and reputational risks?
Sona Ganatra
Plan ahead. Ensure that the Board is aware of people risks that are arising in the business. Think about the information that is shared with the Board and ensure that they have enough information to properly consider risks arising. Tone from the top is critical – the leadership team must live and breathe your values. Avoid informality.
How we can help
Whether you’re managing a sensitive misconduct allegation, facing regulatory scrutiny, or trying to foster a strong speak-up culture, the decisions you make during an investigation can have long-term legal and reputational consequences. Clarity, consistency, and a proactive approach are key, but so is knowing when to bring in the right expertise.
If you’d like tailored advice on an ongoing investigation or want to strengthen your organisation’s investigation protocols, our specialist team is here to help. Please contact our investigations team to discuss how we can support you.
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