SFO ramps up dawn raids: what legal advisors need to know

The Serious Fraud Office (SFO) has undergone serious change this year. Under the leadership of its new director, it has taken a more forthright stance towards corporate investigations. This has been reflected, in part, through the increased use of dawn raids with a refreshed approach.

Dawn raids – which are essentially unannounced visits from law enforcement agencies such as the SFO and regulators to gather evidence of suspected criminal activity or non-compliance with legal or regulatory obligations – are usually early morning visits and can be highly stressful and disruptive events, necessitating cool heads and thorough preparation. Legal professionals can and should play a key role in this preparation and implementation of thorough procedures.

Therefore, the recent surge in dawn raids signifies a clear message from the SFO: it is prepared to flex its muscles and root out wrongdoing using perhaps the most invasive of its tools. Over the past few months, the SFO has conducted as many dawn raids as it did in the preceding three years. This looks rather like a deliberate strategy and underscores the importance for those advising corporates and other organisations to be vigilant and prepared.

So how can practitioners and solicitors best advise clients in the case of a dawn raid, and should we really be concerned?

Giving robust legal advice

Essential in preparing for dawn raids is providing a legal framework for advance preparations and practical support. This practical support can include setting up a "holding room" for investigators, which would be a designated space where investigators can await (if they agree) the arrival of lawyers on behalf of the raided company and/or conduct their activities without unnecessarily or disproportionately disrupting the regular functioning of the business.

This controlled environment helps manage the flow of information and ensures that sensitive areas of the business are not unnecessarily exposed although, ultimately, the SFO will want to see what it wants to see and controlling the flow around the companies property will always be a challenge. A key role for legal professionals is to guide the company on setting up this space and managing interactions with the SFO during the raid.

As a legal advisor, it is important to remind businesses of the breadth of powers available to law enforcement and regulators, as well as the consequences of not complying with valid legal requests. The SFO has extensive powers to search premises, seize documents, and question individuals. Non-compliance or obstruction can lead to criminal penalties, including ultimately fines and imprisonment.

It is crucial that clients understand these powers and prepare to comply fully with any requests made during a raid. As legal advisors, we can help explain these powers and prepare the company for various scenarios.

Preparing for dawn raids

Legal professionals should always advise that an essential starting point is a well-crafted dawn raid policy tailored for both the relevant business and the enforcement risks it faces. This policy should outline the procedures to be followed in the event of a raid. It should detail the roles and responsibilities of employees, the protocol for handling documents and electronic data, and the steps to take if an investigator arrives.

The policy should be comprehensive, covering everything from initial notification to post-raid actions. It should be regularly reviewed and updated to reflect changes in the legal landscape and the company's operations.

To ensure that all relevant personnel are prepared, companies are advised to develop "ready reckoners." These are quick reference guides tailored for different groups within the organisation, including receptionists, security staff, IT staff, in-house legal teams, management, and directors.

The guides should clearly state what each group must do and must not do during a raid. For example, receptionists should know how to handle the arrival of investigators, security staff should understand access control measures, IT staff should be prepared to manage data access requests, and internal legal teams should be ready to advise on compliance. These ready reckoners should be easily accessible and regularly reviewed.

Practice scenarios

During a raid, legal advisers should ensure that, if they themselves cannot attend, that their clients designate employees to shadow the investigators. These individuals should be trained to observe the investigators' actions, take detailed notes, and ensure that the company's rights are protected. Shadowing helps to monitor the scope of the investigation and can provide valuable insights into the SFO's focus areas.

Guidance should be provided on how to interact with investigators, what information to document, and how to handle any disputes or issues that arise.

One of the most effective ways to prepare for a dawn raid is to conduct a mock raid. This exercise involves simulating a raid scenario, and it can be useful to recruit external lawyers or other professionals role-playing investigators. To get the most out of a mock raid, it should be as realistic as possible, covering all aspects of the process, from the initial arrival of investigators to the conclusion of the raid.

An essential part of the mock raid for legal advisers is providing feedback after the exercise to identify strengths and areas for improvement and to identify where any legal mishaps have taken place. This hands-on experience helps to build confidence and ensures that everyone knows their role and responsibilities.

A proactive approach

The SFO's recent actions indicate a significant shift in its approach to investigations and legal advisors should stay vigilant to the possibilities of dawn raids and disruptions.

To mitigate the risks and ensure a smooth response, lawyers can ensure that their clients’ businesses take proactive steps to prepare. Engaging with internal and external legal advisors, developing a comprehensive dawn raid policy, creating ready reckoners, providing guidance for shadowing investigators, and conducting mock raids are all essential components of this preparation.

By taking these steps, it is possible to minimise disruption, ensure compliance with legal requirements, and protect clients’ interests during a dawn raid. Proactive preparation is the key to navigating the challenges posed by dawn raids and safeguarding the company's reputation and operations.

While many still question whether the SFO has enough resources to carry out consistent enforcement, this should be met with caution; as the SFO gets more experienced, this will become cheaper and easier. Furthermore, if dawn raids demonstrably lead to positive results for the SFO then more government funding may be forthcoming. The heightened risk of facing a dawn raid means that no significant organisation, nor external legal adviser, can afford to be complacent.