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DAWN RAIDS: WHAT A COMPANY SHOULD DO NEXT

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Aziz Rahman

Aziz Rahman, Rahman Ravelli Solicitors

As the UK’s Information Commissioner says she will seek a warrant to look at the databases and servers used by British firm Cambridge Analytica, award-winning business crime solicitor Aziz Rahman considers the implications of a raid on a company.

If the police, HM Revenue and Customs, Serious Fraud Office, Financial Conduct Authority or other agency arrive at business premises with a  search warrant, it is a challenge for any corporate.

Aziz Rahman

Aziz Rahman

The immediate impact is obvious and painful. But it need not be a disaster. It is the steps that are taken there and then that will not only influence what happens later, but potentially limit the immediate damage as well.

A director’s instant reaction will be help and assist the authorities, to demonstrate just how reasonable he or she and the company are.  That instinctive approach is perfectly sound so long as it is tempered with a little steel.  A search warrant is a potentially serious infringement of the liberty and the rights of the subject – the High Court has had to repeat this time and again in recent years, see e.g. R (Chatwani&Ors) v National Crime Agency & Birmingham Magistrates’ Court [2015] EWCA 1283 (Admin), 106.

The simple fact is that no matter how serious the case, the various authorities seem to believe that it is appropriate and acceptable not to involve lawyers in their without notice applications to judges for search warrants.  We are seeing it time and again.  This can be a huge mistake. They do not seem to be learning the lesson.  The most immediate step to take after being served with the warrant, therefore, is to get legal representation immediately.  The solicitor contacted should speak to the lead officer and will usually ask that all searches and seizures wait until he or she arrives.  If that is going to be soon then it is a reasonable request and should be accommodated.  If it is refused then it may be that the officer will live to regret that decision later.

Legally Privileged Material and Special Procedure Material

There are literally hundreds of articles on these topics.   We do not intend to set out the law in detail here. The point is that it is very worthwhile for the subject of the search to be pro-active in communicating what he or she feels can and cannot be seized.  Documents containing material that attracts legal professional privilege cannot be seized – no warrant can authorise that.  In R (Tchenguiz&anor) v SFO and Ors [2013] 1 WLR 1634 the High Court said (para 264) that it was clear that; “from R v HM Customs and Excise, Ex p Popely [1999] STC 1016 and R v Middlesex Guildhall Crown Court, Ex p Tamosius& Partners [2000] 1 WLR 453 that the proper procedure is that an independent lawyer should be present to assess claims made for legal professional privilege, without prejudice to the right of the person being searched to go to the court.”

Often, where there is an obvious danger that documents attracting LPP might be inadvertently seized, the warrant will allow for the agency to bring with them an independent lawyer to review material in situ.  Your own lawyer present at the scene can demand that documents are assessed for LPP – or that they are bagged separately for later independent investigation.

Special Procedure Material (SPM) is defined in s14 of the Police and Criminal Evidence Act 1984 (“PACE”).  It is a sweeping-up category of material meriting special protection but falling outside of LPP and Excluded Material (journalistic material).  This includes material in a person’s possession who acquired or created it in the course of any trade, business, profession or other occupation, or for the purpose of any paid or unpaid office (s14(2)) and is held by that person subject to an express or implied undertaking to hold it in confidence.  That sounds very far reaching but in effect it is more limited and really applies to very confidential information; such as medical or welfare records of individuals or very sensitive business documents, such as confidential contract negations or perhaps staff disciplinary records.  Where SPM might be seized, the warrant has to be authorised by a judge of the Crown Court, not a magistrate.

Digital Seizure

This is one area where corporate clients often feel aggrieved: the seizure of computers that then disappear with the officers, effectively disabling the company without it having any clue as to when they will be returned.

There is a special process for electronic data (see s19(4) of PACE) – the searching officer can demand printouts of documents.  Sometimes officers arrive with equipment that enables an image to be taken of a computer’s hard disk. This means that the image can be searched later and the business is not inconvenienced by the disruption of losing the computer.  Where the officers want to remove company computers, it is worthwhile asking them instead to image the drive – and you should note that you have made that request.  The Attorney General’s Guidelines on Disclosure, which provides guidance to investigators, specially provides that “where it is not possible or reasonably practicable to image the computer or hard drive, it will need to be removed from the location or premises for examination elsewhere.” This allows the investigator to “seize and sift” material under sections 50-51 of the Criminal Justice and Police Act 2001for the purpose of identifying material that which meets the tests for retention in accordance with PACE.

Terms of the Warrant

Just because there is a warrant does not mean the officers have carte blanche to do whatever they want. The warrant can and should be inspected and objections made where items are to be seized which the occupier considers irrelevant to the search. If the warrant is wide – then perhaps it is too wide.  R (F, J and K) v Blackfriars Crown Court and Commissioner of Police of the Metropolis [2014] EWHC 1541 (Admin) is instructive.  The company concerned provided services to solicitors’ firms.  A search warrant was granted.  The seizure authorised by the warrant included: “any computer hard-drive or other information storage device capable of storing” the information lawfully sought for the police investigation.  The High Court held that this was too wide.  There was no guarantee that the hard-drive or devices present would contain the information sought, and they could have contained files for unconnected legal cases.  The warrant was quashed.

Retention

Where material is seized, retention is limited to evidence and relevant material (as defined in the Code of Practice issued under the Criminal Procedure and Investigations Act 1996).  Where either evidence or relevant material is inextricably linked to non-relevant material which is not reasonably practicable to separate, that non-relevant material can also be retained.  Inextricably-linked material is material that it is not reasonably practicable to separate from other linked material without prejudicing the use of that other material in any investigation or proceedings. However, inextricably-linked material must not be examined, imaged, copied or used for any purpose other than for providing the source of, or the integrity of, the linked material.

There are further rules about what may be retained, particularly in the case of seizure of digital material.  Again, the issues are too long for this article. But the point is that the steel we mentioned earlier is required – the nerve to ‘police the police’ should continue past the initial search and seizure.

Challenging the Warrant

As mentioned already, there is a tendency for officers to still treat search warrant applications as if they are not as serious and demanding as the High Court consistently says they are.  The former Lord Chief Justice in the case of R (Golfrate Property Management Ltd & Dr. Gulam Adam) v Southwark Crown Court & Commissioner for Police for the Metropolis [2014] EWHC 840 (Admin) expressed dismay at the fact that it is routinely still police officers (not counsel) making applications for warrants – and then making mistakes by failing, for example, to give full and frank disclosure to the Judge.

Procedures

Procedures devised in anticipation of a raid can be hugely important when it comes to reducing the harm that may be caused.

It is vital that any procedures devised should include:

* Arrangements to contact a company’s legal representative if and when it appears a raid is to be carried out. It is vitally important that the company – or at least someone appointed to act on its behalf – knows its legal options.

* Basic but important checks to be made when the investigating agency arrives: Is there legal authority for what the investigating agency plans to do? Exactly what type of activity are its staff allowed to carry out? Are they named on the mandate? Can they verify their identity? Is the mandate for the correct period of time?  Such checks, by someone versed in the relevant law, can prevent those arriving at the premises with a warrant exceeding their authority.

* Plans to make copies of anything taken and take notes of any questions and discussions between the company’s staff and those of the investigating agency. The investigators should be followed so they only take what they are entitled to and do not read legally privileged material.

Having appropriate procedures in place to deal with such an intrusion can make a massive difference to a corporate’s ability to keep functioning. They can be the difference between paper documents and digitally-stored material remaining on site, where they are needed, or being taken unlawfully by those carrying out the raid.

No corporate is likely to know when a raid will be carried out. But the right preparations and a knowledge of the relevant law can minimise the financial and reputational damage one can cause.

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How fintech companies can facilitate continued growth

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Fintech M&A: the terrible teens?

By Jackson Lee, VP Corporate Development from Colt Data Centre Services

The fintech industry is rapidly growing and, in the first half of 2020, fintechs have secured more than $25 billion in investment globally, despite the huge uncertainty caused by COVID-19. As fintechs and their customer base expand, it is important to recognise that the success of these companies is predicated on the ability to use data effectively in providing a personalised experience to their customers.

To ensure these companies do not become victim of their own success, they must ensure they have the ability to scale up their operations and data storage as quickly and cost-efficiently as possible, especially in these challenging times.

So what must fintech companies do if they are to facilitate this growth without bursting at the seams?

Big fish in a small pond

Fintech companies are growing exponentially, and for many, even the current uncertainty around the pandemic has not decelerated the pace of their growth. However, having started small – with only having access to limited tools at the beginning of their journey, many fintech companies can’t keep up with their own rapid growth. When it comes to data infrastructures, they are facing a real risk of becoming a big fish in a small pond.

In order to achieve widespread innovation, and to keep their advantage over traditional financial institutions, fintech companies need the necessary playground space to experiment in.

When the pandemic and its consequent disruptions started to take hold, most businesses weren’t prepared for the types of challenges that they would have to face. Although the suggestion of investing in data infrastructure might seem counter intuitive at the moment, a lifeline for fintech companies going forward will be flexibility and the ability to scale.

Risky business? 

As the uncertainty around the pandemic continues, fintech companies, like other industries are finding it difficult to commit to long-term business plans. Despite their continued growth, fintech companies continue to be cautious to invest in expanding their operations during an unpredictable economic climate, especially when they are doing well enough as it is.

Even before the pandemic, fintech companies exhibited slower rates of the adoption of digitalisation and advanced IT infrastructures than other industries. It’s clear the future is digital and for fintechs to effectively compete in today’s volatile market, they need to be proactive and invest in the value of data and digital transformation.

One area that fintech companies must be proactive in is their IT infrastructure, especially their data storage and connectivity, in order to allow them to act faster than big, established competitors.

Limitless scalability

Due to the continuous growth of fintech companies, with no sign for it to slow down, these companies will have to continually scale their operations up to manage increased demand. Ordinarily, this would have very high costs as they would have to continually alter their IT infrastructure and solutions.

When it comes to flexibility, data is a crucial aspect for fintechs. In today’s world, companies store masses of data, and its amount is growing fast. This makes the storing of the data a juggling act, and the costs keep growing with it. In periods of economic uncertainty, such as the one we are experiencing now, this constant increase in data can quickly turn into a challenge. Therefore, fintechs must ensure that scalability is at the heart of everything they do. When it comes to scalability, however, the key factor is not just growth or the ability to scale up. A vital, but often overlooked opportunity in scalability lies in scaling down, when needed. For fintechs aiming at this level of scalability, hyperscale is the only way forward.

The answer is hyperscale

Hyperscale data centres provide businesses with a one-stop shop for all their data and capacity requirements. These centres, which are built in a campus-style design, allow companies to build out further data centres quickly within the same location, or if needed, downsize. In an environment of ever-fluctuating demand, hyperscale enables scalability of data and storage swiftly. This presents many benefits. The sheer size of these facilities allows for large-scale cloud adoption, which is more streamlined, flexible and cost-effective than ever before. This will help fintechs to get a better handle on their data and reduce costs as much as possible.

With this level of scalability, companies can operate like an elastic band, expanding or retracting when necessary and at a moment’s notice. For example, imagine this year’s Christmas. With the uncertainty of the pandemic and constantly changing restrictions, people’s online activity will be even higher than in previous years. Fintechs will have to scale up their operations to cope with the high demand of online services. Meanwhile, when demand goes down in January, it might be beneficial to scale down and reduce costs until demand increases again.

Hyperscale will also help fintech companies to future-proof their operations, which has become a key consideration as the economy looks to recover from the pandemic. By having the level of flexibility that hyperscale provides, businesses will always have the ability to lean or expand. Being able to adjust quickly within the hyperscale environment, with no added costs, makes fintechs more resilient and flexible to disruptions.

While cutting costs will continue to be a priority in today’s business environment, it is important that fintech companies look beyond this and focus on innovation and technology. The issues that the pandemic unearthed already existed and needed to be addressed by businesses. Therefore, they need to take the current situation as an opportunity to reconsider and improve their business models. Flexibility, scalability and cost efficiency must be top priorities in this new era. Hyperscale can provide this trinity of success.

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2021 Predictions: Operational Resilience Takes Center Stage

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Managing Operational Resilience And Safeguarding Data Are Core To Sustainable Digital Financial Services

Breaking down barriers between Risk and Business Continuity

By Brian Molk, Fusion Risk Management

What a year! Simply put, the global shocks of 2020 were unmatched by any time in recent history. Not only did the COVID-19 pandemic reach a scale and longevity that rippled through the way organizations operate, communicate, and safeguard against future disruptions, we simultaneously experienced civil unrest, wildfires, hurricanes and more. This unprecedented time exposed weaknesses in organizations and demonstrated that historically siloed approaches to resiliency put organizations in grave danger. No one had a plan robust enough for 2020. Those that emerged from this year stronger were those that took an agile, collaborative, and, above all, data-led approach to resilience.

Driven by these changes, the industry will see several trends in 2021:  operational resilience that blurs the lines between multiple disciplines, real-time decision-making based on data instead of plans,  industry collaboration and product suites,  a new executive buyer, often in the C-suite, and  regulators taking greater interest in resilience across critical industries.

Operational Resilience Goes Multi-Disciplinary

2020 prompted volatile and unpredictable market conditions. The pandemic not only demonstrated the interdependence of multiple areas of risk, but showed organizations that they must be hyper vigilant about all disciplines simultaneously and holistically. Organizations recognized they had resources and processes siloed, and that communication and coordination cross-organization is necessary to prove resilience to leadership, regulators and stakeholders. This demonstrated that solution areas (business continuity, risk management, disaster recovery, and more) with their specific expertise and training each have a role to play – and a strength to bring – in an operational resilience strategy.

As organizations recognize the importance of multiple-discipline focus, the barriers between these practices will break down and come together under operational resilience. Operational resilience will become the overarching school of thought in the industry. As a result, products and services will evolve to serve this need.

Data Instead of Plans

If 2020 demonstrated one thing, it’s that organizations simply cannot plan for everything – and instead must be ready to resolve problems as they arise. However, those that emerged most successful from disruption were those with good data at their fingertips, ensuring that leaders can make informed decisions quickly.

Gone are the days in which meticulous planning and tabletop exercises were the best approaches to resilience. In 2021, organizations will recognize the value of identifying their data and dependencies, maintaining them in software and leaning on the technology to simulate the multitude of outcomes possible. When unplanned events do arise, organizations will depend on technology to play out the plans, understand where they will fail and propose the right changes proactively.

Brian Molk

Brian Molk

Industry Collaboration and Product Suites

Industry collaboration is already underway and will continue into next year. As resilience continues to become a highly visible and critical business operation, the industry will realize the benefit of products that span disciplines to better deliver on organizations’ needs. As organizations break down silos between business continuity, incident and crisis management, disaster recovery and various risk disciplines to become one broader resilience practice, industry players will consolidate their respective offerings and increasingly integrate product suites for greater collaboration – and ultimately, greater resilience.

C-Suite Involvement in Risk and Resilience

In 2021, we will see resilience become a priority at every level of an organization – especially with executive leadership. Prior to this year, many companies viewed resilience as an esoteric activity focused on placating leadership and regulators. They relied on a few employees to own all resilience programs, not intimately involving themselves or their operating executives with the details. 2020 took resilience out of the back room and placed it firmly into the boardroom.

The C-suite will be increasingly committed to knowing whether their organization is ready to tackle and recover from disruptions. This means a resilience program needs to span all the appropriate departments and disciplines, speak the language of business instead of practitioners and answer the highest-level questions of readiness in a single executive experience.

Operational Resilience in Every Critical Industry

Undoubtedly, operational resilience will begin to take center stage in all critical industries. Over the past several years, the Bank of England, the Fed, and the European Central Bank among others have begun a push for regulation not only in financial resilience but in the resilience of operations for financial services. These bodies recognized the critical impact that their industry has on the wellbeing of individuals, businesses, and the economy as a whole – and are taking seriously their role in making a more resilient economy.

Other critical industries, including energy, power, agriculture and others (possibly based on the 16 critical industries defined by the department of homeland security) are similarly positioned. We expect to see regulators taking a greater interest in the organizations in these spaces, to ensure our national and global systems are resilient enough to recover from future events.

2020 was a challenging year, and many people are likely relieved it’s over. But don’t rest on your laurels. Whether it’s climate change, political unrest or even pandemics, the world is more interdependent and more exposed than ever. Ensure your organization has learned the lessons of 2020 and is first to take advantage of these trends in 2021, before it’s too late.

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Five Workplace Culture Trends of 2021

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Five Workplace Culture Trends of 2021 1

5 January 2021 – 2020 – a year like no other – is responsible for driving organisational change, especially workplace culture, which has witnessed considerable upheaval over the past 10 months. Workplace culture expert, O.C. Tanner Europe, foresees that the pandemic and its fallout will accelerate further changes on a scale never before witnessed. Here are its top five workplace culture trends of 2021:

  1. 2021 will see a big focus on organisational culture – COVID has altered priorities. Perhaps for the first time, the importance of a thriving workplace culture has been driven home, with leaders realising that culture isn’t just about the physical perks such as the table tennis table and massage chair, but is about connecting people to purpose, accomplishment and each other.  After months of remote working, furlough and general workplace flux which has caused mass anxiety and financial strain, many organisational cultures need healing and fixing. Leaders will need to find ways to bring people back together, even if it means doing this remotely , and some leaders may even need to strip everything back and re-build a more positive, connected and purpose-driven culture from the ground-up.
  2. How we work has changed for good – Research by the O.C. Tanner Institute found 77 per cent of employees say their workplace culture will never return to pre-Covid-19 normal. Remote working will continue well into 2021 and as employees have proven that remote working can be as efficient and productive as being in the office, many organisations will allow employees to work remotely permanently. On top of this,  with many organisations having had to adapt to virtual working, many normal work processes have changed for good. Companies have already adopted new recruiting and hiring processes, including virtual interviews and even the benefits that appeal to employees right now are shifting. Rather than unlimited holidays, paid parental leave has become important. There’s also a renewed focus on mental and emotional wellbeing.
  3. A greater emphasis on diversity and inclusion (D&I) – Organisations can no longer remain silent on social issues. Employees expect their companies to be vocal on issues of injustice and inequity and this includes a greater emphasis on D&I. And instead of focusing on how to avoid exclusion which is an approach initially driven by legal experts to avoid litigation, the key is to concentrate on inclusivity. This means companies should look past categories such as race, gender, or sexual orientation and nurture each person as an individual. With just 44 per cent of employees saying their company’s diversity and inclusion approach feels sincere, there is a huge opportunity for organisations to improve their efforts.
  4. Generation Z needs to be connected to purpose – Employees in this generation are entering the workplace and more than any previous generation, they are highly connected to social issues and want to make a difference in their jobs. This generation isn’t about climbing the corporate ladder but want to feel that they belong and that their company has an inspiring and relatable purpose. In order to attract and engage Gen Z employees, companies must connect their work to purpose, practice modern leadership and focus on wellbeing.
  5. Real digital transformation is happening – Covid-19 has forced true digital transformation that companies may have had on their ‘to do’ lists for years. Technology has been used to connect us together and keep us working during times of social distancing and remote working, and technological innovation is not stopping any time soon. Mobile tools are more important than ever, as well as strong data security and robust internet capabilities. We will continue to see more technological developments this year, with a focus on bringing people together despite many employees still working apart.

Robert Ordever, Managing Director of O.C. Tanner Europe says, “Leaders and HR professionals need to be prepared for the challenges ahead as they tackle the fallout from the pandemic. There must be a concerted effort to heal broken and damaged workplace cultures while building on the positive developments as a result of COVID-19. Inclusive, connected and purpose-driven workplaces must be prioritised and it’s time to drive technological advancements to bring people together. 2021 needs to be a year of deliberate and positive transformation.”

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