The following is an excerpt from Keith Read's whitepaper "Dawn Raid Ready?"
It is important that the review team identifies the key issues and how they apply in the jurisdiction or jurisdictions in which your organisation operates. These issues will form the basis of your organisation’s Dawn Raid response plan, processes and training.
Whilst clearly not exhaustive, these key issues would typically include:
- Types of Dawn Raid and who could carry them out. In the European Union, for example, a Dawn Raid can be carried-out by European Union inspectors or national competition authority inspectors. In the UK, the national competition authority is currently the Office of Fair Trading (OFT) which can carry out inspections on their own behalf or on behalf of the European Commission. Crucially, the type of inspection (Dawn Raid) and the type of authorisation that the officials possess can directly affect both the powers of the inspectors and possible penalties; for this reason, it is essential to obtain, and understand, the inspectors’ authorisations (see below).
- Inspectors’ possible powers of investigation, the likely types of investigation and the legal basis for those investigations. This would include, for example, whether the inspectors have a judicial warrant. Only a warrant conveys the power to actively search premises, force entry and seize documents and then decide later whether they are relevant.
- Types of premises that may be inspected, including offices, land and vehicles, together with the homes of directors, managers, other employees and contractors. Any Dawn Raid response plan will clearly need to deal with the possibility that the homes of the CEO, managing director or other employees could be targeted. It is essential that the plan prioritises those offices and homes that represent the most likely targets of a Dawn Raid. For example, in the E.ON case, the premises were those of a wholly owned subsidiary.
- Dealing with simultaneous Dawn Raids, particularly involving offices and organisations in more than one EU Member State or international jurisdiction. For example, the UK and US authorities are increasingly collaborating on highprofile joint investigations.
- Legal privilege and how this varies across jurisdictions. For example, in contrast to the position under UK law, EU legal professional privilege does not extend to correspondence with an organisation’s in-house lawyer unless that lawyer is simply reporting the statements of an external lawyer.
- Documents outside the scope of inspection. For example, there is some protection for an organisation where, in the UK, the OFT is investigating on its own behalf or on behalf of the European Commission or another national authority. The OFT cannot require the production of documents that would be protected from disclosure in the UK courts by reason of legal privilege.
- External consequences of a Dawn Raid can be substantial, and include reputational effects which may have long-term consequences even if no offences are identified. It is very likely that the press will be informed about the raid and the competition authority itself may well issue a press release. Research shows that, almost invariably, an organisation’s share price will be affected once the raid is announced, which will then necessitate careful handling of relationships with shareholders and other stakeholders.
- Internal consequences of a Dawn Raid are also likely to be substantial, both in the short- and longer-term. A Dawn Raid will invariably involve a wide range of employees for whom this may well be a challenging and demanding experience; it is also likely to be completely unfamiliar ground to them. Preparedness, training and controlled communications are all key, particularly as the Dawn Raid unfolds and employees start to consider media reports and speculation. Positive but realistic assurance is vital.