Case: R (on the application of KBR, Inc) (Appellant) v Director of the Serious Fraud Office (Respondent)  UKSC 2
On February 5, 2021, the UK Supreme Court ruled that the Serious Fraud Office (SFO) cannot compel foreign companies with no presence in the jurisdiction to produce documents held abroad using its powers under Section 2(3) of the Criminal Justice Act 1987 (CJA 1987).
After losing its ability to use European Investigation Orders to obtain evidence located in other EU member states due to Brexit, the judgment is a further setback for the SFO in terms of the extraterritorial reach of its investigative powers and may in certain circumstances affect its ability to investigate fully cross-border serious fraud cases. When seeking documents or electronic data held abroad from foreign companies that are not registered in the UK or do not carry on business there, the SFO will now have to rely on mutual legal assistance or an overseas production order (where such mechanisms are available).
However, the Supreme Court’s ruling will provide foreign companies with greater certainty regarding documents that may have to be produced to the SFO, particularly where production could be resisted in their own jurisdiction on grounds of privilege.
On June 1, 2020, the Criminal Division of the U.S. Department of Justice (DOJ) publicized an updated version of its “Evaluation of Corporate Compliance Program” guidance. This is the third version of the document, with the DOJ having issued the guidance in 2017 (which we analyzed here) and revised it in April 2019 (which we analyzed here). This further revision is another reminder of the DOJ’s heightened focus and increasing sophistication regarding evaluating compliance programs during investigations. While the overall structure of the guidance generally remains consistent with the last version, the revisions provide additional insight into the DOJ’s expectations for corporate compliance programs. More specifically, the revisions highlight the importance of an adequately resourced and empowered compliance department, a constantly evolving compliance program based on the company’s current risk profile and relevant compliance issues, and the use of key compliance metrics to test the effectiveness of a compliance program.
The English High Court recently handed down a judgment which limits the circumstances in which companies will be able to assert legal professional privilege in documents created as part of an internal investigation into potential criminal activity. The Court ruled that a claim for litigation privilege in the context of a criminal investigation will only be valid where, at the time that the relevant documents were created, the prospective defendant has sufficient knowledge about the matter to believe that there is a realistic prospect that a prosecutor will have enough material to proceed with a prosecution. The belief that a prosecutor will commence an investigation into a company is not sufficient to establish a claim for litigation privilege. The judge’s narrow interpretation of legal advice privilege also means that notes of interviews with employees will generally not attract privilege unless they provide “clues” as to aspects of legal advice given to the company. (more…)