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Corporate misconduct has been firmly on the political agenda in recent months, writes Michael Milnes.
The ongoing Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry is continuing to attract daily headlines, and questions have been asked in the media about whether the regulator, the Australian Securities and Investment Commission (ASIC), should have been taking a more robust approach to enforcement.
Elsewhere, new legislation to broaden the scope of corporate bribery offences in the form of the Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2017 is also currently passing through Parliament.
One tool available to regulators to uncover corporate wrongdoing is their power to undertake unannounced searches and seize documents: the “dawn raid”.
Compared to some countries, dawn raids have been quite rare in Australia, but when they do happen, events unfold quickly. Important decisions must be made on the spot and without the luxury of time, so all eyes are on the general counsel and legal team.
Get the response wrong and there’s the risk of disruption, loss of staff morale and productivity, and damage to the reputation of the company in the market – and that’s before the regulator has made any allegations against the company. At worst, there could even be criminal charges for those accused of trying to obstruct the search.
When faced with a dawn raid, legal teams need to have quick access to up-to-date and reliable information about the powers that different regulators have in each jurisdiction and know exactly what practical steps should be taken as the raid unfolds.
Some of the larger law firms have developed apps that provide this type of information for their clients; in the UK, one in-house legal team at Royal Mail has developed its own app to put the right information in the hands of frontline managers.
There are some basic steps that any general counsel can implement before and when faced with a dawn raid, which will help you make sure the search proceeds smoothly and that your company can get back to business as soon as possible:
Get prepared
Michael Milnes is the head of commercial and competition law at Practical Law Australia. Before joining Practical Law, Michael worked as in-house counsel in the FMCG supply chain sector and at leading law firms in the UK, Europe and Australia. He has a broad range of experience advising on commercial law, consumer marketing, technology and strategic corporate projects and the management of legal service delivery. He holds an MBA from a leading UK business school, which included research and study of topics such as legal procurement, e-business and technology, automation, strategy and finance.