ASIA-PACIFIC INVESTIGATIONS REVIEW 2021 - DLA Piper
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ASIA-PACIFIC
INVESTIGATIONS REVIEW
2021
© Law Business Research 2020ASIA-PACIFIC
INVESTIGATIONS REVIEW
2021
Reproduced with permission from Law Business Research Ltd
This article was first published in September 2020
For further information please contact Natalie.Clarke@lbresearch.com
LAW BUSINESS RESEARCH
© Law Business Research 2020Published in the United Kingdom
by Global Investigations Review
Law Business Research Ltd
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© 2020 Law Business Research Ltd
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No photocopying: copyright licences do not apply.
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on the information provided. This information is not intended to create, nor does
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© Law Business Research 2020Contents
Cross-border overviews
Forensic Accounting in Cross-border Investigations�������������������������������������������1
Colum Bancroft, Edward Boyle and Takahiro Yamada
AlixPartners
Strengthening Supply Chains amid Trade Wars������������������������������������������������� 11
Frances McLeod, Drew Costello and Weng Yee Ng
Forensic Risk Alliance
The Long Arm of Law Enforcement����������������������������������������������������������������������� 27
Kyle Wombolt and Jeremy Birch
Herbert Smith Freehills
Country articles
Australia: An Increasingly Global Approach�������������������������������������������������������42
Dennis Miralis and Phillip Gibson
Nyman Gibson Miralis
Australia: Handling Internal Investigations��������������������������������������������������������58
Natalie Caton, Jonathon Ellis and Gowri Kangeson
DLA Piper
China: A New Normal amid Rising Trade Tensions���������������������������������������������71
Dora W Wang, Michael Lowell, Peter Witherington and Jessica Tian
Reed Smith
Hong Kong: Email Fraud and the Con Game in Business��������������������������������83
Maria Sit, Hadrian Ho, Fei Kwok and Natasha Shum
Dechert
iii
© Law Business Research 2020Contents
India������������������������������������������������������������������������������������������������������������������������������ 97
Aditya Vikram Bhat and Prerak Ved
AZB & Partners
Singapore: Handling Financial Services Investigations��������������������������������� 109
Joy Tan and Koh Swee Yen
WongPartnership LLP
iv
© Law Business Research 2020Preface
Welcome to the Asia-Pacific Investigations Review 2021, a Global Investigations Review special
report. Global Investigations Review is the online home for all those who specialise in inves-
tigating and resolving suspected corporate wrongdoing, telling them all they need to know
about everything that matters.
Throughout the year, the GIR editorial team delivers daily news, surveys and features;
organises the liveliest events (GIR Live), covid-19 allowing; and provides our readers with
innovative tools and know-how products. In addition, assisted by external contributors, we
curate a range of comprehensive regional reviews – online and in print – that go deeper into
developments than the exigencies of journalism allow.
The Asia-Pacific Investigations Review 2021, which you are reading, is part of that series.It
contains insight and thought leadership from 25 pre-eminent practitioners from the region.
Across nine chapters and 130 pages, it provides a blend of invaluable retrospective, handy
primer and crystal ball. All our contributors are vetted for their standing and knowledge
before being invited to take part.
Together, these contributors capture and interpret the most substantial recent inter
national investigations developments from the past year, complete with footnotes and rel-
evant statistics. Elsewhere, they focus on a particular topic so you can get up to speed quickly.
This edition covers Australia, China, Hong Kong, India and Singapore in detail; has a pair
of overviews pertinent to 2020 (how to reorient supply chains safely and on the particular
dangers that these strange times may make manifest); and a third on the evidence-gathering
powers of enforcers who want material located outside their jurisdiction.
Among the gems that a close reading will yield is a chart showing the correlation between
stock market drops and the discovery of fraud; a review of what foreign courts have said on
China’s blocking statute; a full taxonomy of Australia’s enforcement agencies and how they
have reacted to a governmental edict to internationalise; signs that Australia’s enforcers are
shifting on internal investigation interview notes – they may expect to see copies in the future;
the effect of US–China trade tension on enforcers in both countries (they are much more on
edge); a helpful road map for responding to email fraud; and much, much more.
v
© Law Business Research 2020If you have any suggestions for future editions, or want to take part in this annual project,
we would love to hear from you.
Please write to insight@globalinvestigationsreview.com.
Global Investigations Review
London
August 2020
© Law Business Research 2020Australia: Handling Internal
Investigations
Natalie Caton, Jonathon Ellis and Gowri Kangeson
DLA Piper
In summary
It goes without saying that wrongful conduct in a corporate setting can have
drastic and irreparable legal, commercial and reputational consequences for the
individuals and entities involved. Internal investigations, which can be carried out
quickly and tailored to address specific company concerns, can be particularly well
suited to identifying, minimising and remediating such fallout. This is particularly
relevant in the current corporate climate in Australia, which has seen an increased
level of scrutiny over corporate governance and operational issues. More than ever,
there is an expectation that board members and senior managers understand
what is happening in their company and wider third-party business and supply
chain networks, and take responsibility for the actions of employees and third
parties who carry out business on behalf of the company. In this climate, internal
investigations are becoming more prevalent; a trend that we expect will continue.
What makes an efficient and effective investigation can vary dramatically
depending on the subject matter of the investigation, and the individuals and
entities involved. This article provides a brief overview of the key considerations
that will allow a company to craft and manage an effective Australian internal
investigation, and achieve a prompt and robust outcome.
Discussion points
• Commonwealth Modern Slavery legislation commenced on 1 January 2019,
requiring large commercial organisations to report on the steps they have
taken to ensure that their goods and services are not a product of supply
chains in which modern slavery is taking place.
• Changes to Australia’s whistleblower regime, including strengthened
protections for whistleblowers and the requirement for public and large
proprietary companies to have a whistleblower policy in place, came into
effect on 1 July 2019. We have seen an increase in internal investigations as a
result of the updated regime and a corresponding impact on how companies
are carrying out those investigations.
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• Investigation teams should keep in mind that both federal and state
legislation, including the Privacy Act 1988 (Cth), regulate how a company
can handle personal information about individuals as well as the use of
surveillance or recording devices, and privacy and surveillance considerations
can arise at all stages of an internal investigation.
• In the near future, companies may be incentivised to proactively self-
report internal misconduct in return for reduced penalties under proposed
legislation currently before the Senate that would introduce a deferred
prosecution agreement scheme in Australia.
Referenced in this article
• Privacy Act 1988 (Cth)
• Modern Slavery Act 2018 (Cth)
• Whistleblower amendments to the Corporations Act 2001 (Cth) and Taxation
Administration Act 1953 (Cth) (amended by the Treasury Laws Amendment
(Enhancing Whistleblower Protections) Act 2019 Cth))
• Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth)
• Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2019 (Cth)
• Director of the SFO v Eurasion Natural Resources Corporation Limited [2018]
EWCA 2006
• Cantor v Audi Australia Pty Ltd [2016] FCA 1391
• Property Alliance Group Limited v The Royal Bank of Scotland Plc [2015] EWHC
1557 (Ch)
Launching an investigation
There are countless reasons for commencing an internal investigation. A company may itself
have identified potential wrongdoing. Third parties may have alleged inappropriate conduct.
Regulators may have made informal enquiries or launched a formal investigation, either of
the company itself or of another industry participant, that has knock-on consequences for the
company. In some cases, regulators may have required an organisation to undertake an internal
investigation (see, for example, section 53 of the Independent Commission Against Corruption
Act 1988 (NSW)), or there may be other circumstances creating the impetus to investigate (for
example, licence requirements or positive reporting obligations in particular industries).
Entities may commence investigations to determine whether notification is required under
the mandatory data breach notification laws introduced into the Privacy Act 1988 (Cth) effective
22 February 2018, if the entity suspects but is not certain that a serious and eligible data breach
has occurred. Entities are required under the data breach notification scheme to undertake
‘reasonable and expeditious assessment’ to determine whether there are ‘reasonable grounds’
to consider that an eligible data breach has occurred. This assessment must be made within 30
days of the entity becoming aware of the relevant circumstances. Entities may also avoid the
new notification requirements if they take remedial action before any serious harm is caused
by any eligible data breaches.
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Entities may also commence investigations in relation to Commonwealth and state modern
slavery laws, which require large commercial organisations to report on the steps they have
taken to ensure that their goods and services are not a product of supply chains in which modern
slavery is taking place. The Commonwealth modern slavery legislation, the Modern Slavery Act
2018 (Cth), commenced on 1 January 2019.
In some circumstances, urgent action is necessary. This includes where there is an actual
or anticipated destruction of documents (discussed below), a need to promptly inform third
parties what has occurred, or where relevant personnel are about to depart from the organisa-
tion. Immediate action is also required where any unreasonable delay in launching the investiga-
tion could be seen as acquiescence or tacit approval of the impugned conduct by the company.
While those considerations may dictate the timing of immediate steps in an investigation,
other factors, such as the need to efficiently carry on business and the availability of resources,
will also influence an investigation’s progress. Insufficient information and resources can result
in a haphazard investigation process and a less than credible – or even unreliable – investiga-
tion report.
Identifying who will conduct the investigation
Once the company has decided to commence an internal investigation, it will need to appoint
someone to take responsibility for coordinating and conducting the investigation. Often, this
will be a member of the company’s legal team. However, there may be cases where it is more
appropriate for members of the board to have oversight of the conduct of the investigation – for
example, where the conduct of senior management is impugned.
Likewise, if the scale of the investigation involves numerous persons across various offices
and a large quantity of factually or technically dense material, the company may need to allocate
additional and specific resources to the investigation. For example, if the subject matter of the
investigation is a serious and systemic issue, or potentially involves misconduct on the part of
senior personnel, it may be advisable for external advisers to conduct the investigation. This
often adds an additional layer of impartiality, objectivity and forensic scrutiny, and can assist in
navigating difficulties created by internal reporting lines or interpersonal relationships between
company personnel.
The members of the investigations team should have an appropriate combination of skills,
training and experience to support a well-rounded and thorough investigation. If the investiga-
tion involves topics where specialised expertise would be beneficial (such as concerns about
securities or antitrust violations), that should be taken into account in forming the team. Failure
to appoint appropriate persons could compromise the investigation process and outcome. For
similar reasons, close colleagues or peers of persons who are ‘at risk’ in the investigation should
not be appointed to the investigations team.
Setting the remit of the investigation
The scope of the internal investigation must be set carefully and clearly, with its sole focus
on responding to the particular identified problem. It can be useful to prepare written terms
of reference, which identify those matters that fall within the subject matter of the internal
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investigation and – equally critically – those that fall outside. If the investigation has been
prompted by regulatory attention, the intended interaction between the internal investigation
and any existing or anticipated regulatory process should be taken into account.
The proper constitution of the investigations team, along with the drafting of suitable terms
of reference, not only ensures the integrity of the investigation and the information gathered by
it, but also plays an important part in determining issues of privilege (discussed below). These
initial decisions should not be made on a ‘set and forget’ basis. As investigations invariably
evolve over time, it is vital to reassess the scope of the investigation at frequent and regular
intervals, and make any necessary changes.
Whistleblower protections
Recent changes to Australia’s whistleblower regime, which came into effect on 1 July 2019,
impact how a company commences and carries out an internal investigation. Relevantly,
the amendments to the Corporations Act 2001 (Cth) and Taxation Administration Act 1953
(Cth) require public companies and large proprietary companies to have a whistleblower
policy in place that explains, among other things, how concerns can be raised, the protec-
tions available for the whistleblower, and how the company will ensure the fair treatment
of employees who are mentioned in any protected disclosures made in accordance with the
legislation. A related consideration is for companies to have in place systems and processes
to make sure that internal investigations based on whistleblower disclosures proceed in a
manner congruent with the enhanced protections – for example, protecting the identity of
anonymous whistleblowers, and preventing whistleblowers from suffering detriment due
to their disclosures.
Communicating the existence of the investigation
The next step is for the company to communicate information internally regarding the investi-
gation. It can be appropriate to issue a document preservation notice, drafted in a neutral and
objective way, to all relevant personnel and, in some cases, to all staff, on a confidential basis.
Specific document collation requests to relevant individuals may also be needed, as well as guid-
ance on what may and may not be discussed between company staff, or third parties, concerning
the investigation. The company will also need to carefully consider how broadly it makes known
the fact of the investigation.
As a general rule, it is not advisable to disclose the details of the investigation in such commu-
nications, or the circumstances that have led to the investigation. This is for many reasons, but
particularly because those communications may not be privileged, and may therefore be the
subject of disclosure to third parties in the future. The enhanced whistleblower protections
discussed above may also impact how such communications are framed.
Conducting the investigation
There are no general specifications in Australia as to how an internal investigation should be
carried out, including in relation to procedural matters such as independent representation for
company employees interviewed in the course of an investigation. The company should consider
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and address these issues prior to gathering evidence in the investigation. Best practice suggests
companies take into account principles of natural justice, as well as anticipated interactions with
regulators about the subject matter of the investigation, in deciding how to proceed.
Documents
An important first step in internal investigations in Australia – like many other jurisdictions
– is the appropriate collation, compilation and retention of relevant documents. Document
preservation must include both hard copy and electronic documents to ensure all original docu-
ments are quarantined in their original form. It may be appropriate to take a forensic image
of all relevant electronic data to ensure the integrity of information (including metadata) is
maintained throughout the course of the investigation. The company should take urgent steps
to preserve documents that could otherwise be destroyed by innocent means (for example,
scheduled record management) or malicious means.
One of the issues a company may need to confront in document collation is how to treat
private documents an employee has stored in or on company property. This includes private
information or communications stored on the company’s computers or mobile phones, or on the
company’s premises (such as at the employee’s desk or workstation). In many circumstances, the
company’s ability to access and review such private documents will depend on the specific terms
of the employment contract, or any applicable codes of conduct or terms of use, and particularly
whether consent has been previously provided by employees for employer access to such material.
The company will also need to consider the impact of the Privacy Act 1988 (Cth), which
regulates the company’s handling of personal information about individuals. There are also
differing laws across various state and territory jurisdictions about the ability to use surveillance
or recording devices to obtain information without the consent of the person under surveillance.
As privacy and surveillance considerations can arise in various ways throughout an internal
investigation, the investigations team should ensure it has addressed the relevant legal require-
ments when embarking on data collection.
Witnesses
Another key aspect of any investigation is interviewing relevant individuals. It is vital that the
investigations team properly identifies the relevant individuals, and arranges for them to be
interviewed separately, in an appropriate order, and with clear objectives. A core bundle of
documents should be produced for each interviewee to be taken through during the course
of the interview. It is generally not desirable to provide the interviewees with advance copies
of the documents, and they should not be permitted to retain copies of any such documents.
The interviewees should also be instructed not to discuss their evidence with anyone else. This
is to maintain confidentiality, avoid a potential waiver of privilege and also avoid the potential
contamination of evidence.
When conducting interviews, the company’s legal representatives should clearly inform the
interviewee that they represent the interests of the company, and while the content of the inter-
view is confidential and privileged, the company reserves the right to waive that confidentiality
or privilege in the future.
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In appropriate circumstances, interviewees should not only be allowed but encouraged to obtain
independent legal representation for the purposes of the interview. In some cases, the company – or
an insurer – may be obliged to indemnify the interviewee for the costs of that representation.
During the interview process, the interviewer should be focused on assessing the interviewee’s
recollection, as opposed to his or her recreation, of relevant events. Interviewers should always be
alive to the potential for interviewees to give incorrect accounts, and should be prepared to chal-
lenge and test the evidence given by the interviewee there and then without the need to adjourn
the interview, which may allow the interviewee an opportunity to tailor his or her evidence.
In Australia, written records of the interview created by internal or external lawyers for the
purpose of advising the company will usually be privileged. This is not the case for notes taken
by the interviewee, or any ‘support person’ brought into the interview by the interviewee. The
only exception is where notes are created by the interviewee’s appointed legal representative,
who has attended the interview for the purpose of advising the interviewee. Those notes will
ordinarily be privileged in the hands of the interviewee, but not the company.
The investigations team should also consider whether it is useful to record the interview
(particularly in the current environment where many interviews may be occurring by platforms
such as Zoom or Microsoft Teams, which provide inbuilt recording functions), or obtain a
signed written statement from the interviewee reflecting the evidence given during the inter-
view. If the interview was recorded, the team should also consider whether to request that the
interviewee sign a transcript of the interview, verifying its accuracy. The assessment of how
to record the interview may be influenced by views about the prospect of future regulatory or
litigious activity. The more typical course has been for Australian regulators to exercise their
compulsory powers to conduct their own interview processes, rather than request access to
written statements or notes of witness interviews produced in the course of internal investiga-
tions (requests are typically met with claims of privilege). However, there have been recent
shifts in this position, where companies have sometimes agreed to provide output from internal
investigations to regulators under a ‘limited waiver’ structure, or where regulators have shown a
preparedness to challenge privilege claims made over notes taken during internal investigations
(the litigation by the Australian Securities and Investments Commission against AMP Limited
challenging privilege claims in such notes, which settled in March 2019 prior to hearing, being
one example and, more recently, the Australian Taxation Office). Accordingly, companies should
bear these possibilities in mind when conducting internal investigations. Even if privilege over
such materials is maintained in Australia, if the subject matter of the investigation involves
multi-jurisdictional issues, regulators in other jurisdictions may have different practices and
different rules as to the availability of privilege claims may apply.
The company may also need to confront issues that arise when individuals refuse to partici-
pate in an interview or other aspects of the investigation, which can trigger the need for discipli-
nary action. The company must also consider whether certain employees who are the subject of
(or are at risk in) the investigation need to be suspended, or, where serious wrongdoing is clearly
identified, dismissed (which can then affect the willingness of those individuals to cooperate
with the investigation). All of these issues should be assessed with an awareness of the company’s
relevant employment obligations.
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Reporting on the investigation
The investigations team should keep relevant internal stakeholders informed of the progress of
the investigation. Once the investigation has concluded, they will also need to report its findings.
A key issue that often arises in this context is identifying the relevant stakeholders who need to
be informed, and at what stages. Generally, dissemination of information relating to the inves-
tigation should be on a ‘need to know’ basis. That is because doing otherwise may jeopardise a
company’s ability to claim or retain privilege over those reports. Reporting should also take into
account the subject matter of the investigation and the personnel potentially implicated. For
example, if senior management is potentially involved, it will be necessary to devise reporting
arrangements that avoid communication to those persons, and guard against their accessing
any relevant documents or reports created.
Depending on the company in question, there may be some requirement or obligation to
disclose aspects of the investigation to regulatory bodies or authorities. This is particularly the
case if the investigation intersects with an actual or anticipated regulatory investigation, espe-
cially if the company wishes to self-report certain conduct in an effort to obtain immunity from,
or leniency in respect of potential penalties. In some industries, licence conditions can also
create positive reporting obligations where potential contraventions are identified (for example,
in the financial services industry).
If the company is a publicly listed entity, disclosure of certain aspects of the investigation
may be required to comply with the company’s continuous disclosure obligations under the
Australian Securities Exchange Listing Rules. The company may also need to disclose certain
circumstances to their insurer to obtain coverage in respect of future claims against the company.
The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) also imposes
certain transaction and compliance reporting obligations on reporting entities, which can be
triggered if certain circumstances are identified in the course of an internal investigation.
Reporting entities must also take care not to ‘tip off ’ persons in relation to these matters at any
time, including during or following an investigation, as it is an offence to do so.
Where criminal conduct is suspected or identified, although there is usually no positive
obligation to do so, the company may decide to engage with relevant law enforcement agencies,
such as the police. Where aspects of an investigation may become public, the company may also
wish to engage public relations personnel to assist in managing media coverage and potential
reputational impact.
To the extent that criminal conduct is suspected or identified, companies may be incentivised
in the near future to proactively self-report internal misconduct in return for reduced penalties,
with draft legislation to introduce a deferred prosecution agreement (DPA) scheme in Australia
currently before the Senate. The intention of the proposed DPA scheme is to encourage self-
reporting of misconduct by corporations, to assist in addressing some challenges inherent in
detecting and investigating serious corporate crime, and to offer corporations the opportunity to
reduce the time, cost and uncertainty connected with drawn-out investigations and prosecutions.
If passed in its current draft form (being the Crimes Legislation Amendment (Combatting
Corporate Crime) Bill 2019 (Cth)), which is substantively similar to the 2017 version of the
bill, the Australian DPA scheme will allow the Commonwealth Director of Public Prosecutions
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(CDPP) to invite a company that is alleged to have engaged in serious corporate crime to nego-
tiate an agreement to comply with a range of specified conditions. In considering whether
to offer a DPA, the CDPP will take into account whether the company has self-reported the
suspected misconduct and the extent to which the company has demonstrated a willingness to
cooperate with the law enforcement agency. Conditions of the DPA will require a company to
admit to agreed facts detailing their misconduct, pay a financial penalty to the government and
disgorge profits and other benefits obtained through the misconduct. If the company fulfils its
obligations under the DPA, it will not subsequently be prosecuted in relation to the offences
identified in the DPA.
Mandatory data breach notification laws came into effect in February 2018 via amend-
ments to the Privacy Act 1988 (Cth). They require the relevant entity to notify the Office of the
Australian Information Commissioner and any affected individuals where there are reasonable
grounds to believe a serious, eligible data breach has occurred. The Privacy Commissioner has
encouraged relevant entities to begin undertaking audits and developing breach response plans
in anticipation.
While it is one thing to identify who should be provided with information relating to the
investigation, it is another to identify what should be reported. In some circumstances, it might
be appropriate merely to identify that an investigation has been undertaken and has concluded.
In other circumstances, it may be appropriate to identify the results of the investigation, or the
recommendations or findings made in relation to certain matters.
At all stages, the company should also consider whether communications will be protected
by privilege and, if so, how to best protect that privilege.
Privilege – a critical factor
Privilege is a key consideration throughout the course of an internal investigation. An
internal investigation where relevant communications are protected by privilege can greatly
assist an investigations team to obtain full and frank disclosure, and enable the company to
thoroughly assess the situation with a fuller understanding of the facts than might other-
wise occur.
There is a healthy respect for privilege in Australia, including in respect of documents
created for the purpose of internal investigations. However, this does not mean any claim for
privilege over such documents will be blindly accepted. Regulators and other litigants can and
often do vigorously challenge privilege claims.
In Australia, legal professional privilege applies to communications that are prepared for
the dominant purpose of the following:
• obtaining or providing legal advice; or
• obtaining or providing legal services (including representation) in actual or anticipated
litigation.
The test of whether a communication was prepared for the dominant purpose of either of
the above limbs requires consideration of the ruling, prevailing or most influential purpose
of the communication. The starting point is generally to ask what the intended use of the
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communication is. Where a communication has mixed purposes, only one of which is a privi-
leged purpose, it is unlikely to be protected by privilege. It is critical to consider the communica-
tions to be made and any documents created in the course of an internal investigation against
that test.
Where legal advice is given by an in-house lawyer during the course of or in response to an
internal investigation, legal professional privilege may still attach to that advice, provided the
in-house lawyer was a qualified lawyer acting in the capacity of a lawyer and not in some other
capacity (such as an executive giving an opinion on a commercial matter). Matters affecting the
independence of a lawyer may inform the capacity in which the lawyer is acting, which in turn
may inform the dominant purpose of the relevant communication, although independence of
itself is no longer considered a stand-alone requirement in establishing privilege over commu-
nications with in-house lawyers. Given the continuing relevance of independence in-house
lawyers should maintain their practising certificates, maintain secure files that are separate
from the remainder of the organisation, and ensure their legal and non-legal work functions
are separated as much as possible.
There have been a series of cases in the United Kingdom that have considered whether
documents produced and communications made by in-house lawyers in the course of under-
taking internal investigations were not protected by privilege. The English Court of Appeal in
Director of the SFO v Eurasian Natural Resources Corporation Limited [2018] EWCA Civ 2006
(ENRC), overturning a first-instance decision to the contrary, found that criminal proceedings
against ENRC were reasonably in contemplation when an internal investigation had begun, and
that interview notes taken during that investigation were for the dominant purpose of use in
connection with the anticipated criminal proceedings (therefore attracting litigation privilege).
The Court also commented on the position, flowing from Three Rivers District Council v Bank
of England (No. 5) [2003] QB 1556, that not all officers and employees of the company should
be treated as a client for the purpose of legal advice privilege (a position which in other cases
had meant that certain transcripts and notes from interviews conducted by in-house lawyers
gathered during internal investigations, therefore, were not considered to be lawyer–client
communications and were not protected by legal advice privilege).1 In ENRC, the Court of
Appeal indicated that it considered the Three Rivers (No. 5) position incorrect, but that it was
for the UK Supreme Court to address that matter.
Australian courts tend to take a broader approach as to who constitutes a client; however,
they have taken differing approaches about whether lawyers’ notes of interviews of witnesses
are protected by privilege, depending on the particular circumstances.
Issues also frequently arise as to whether privilege attaches to documents prepared by third
parties. Third-party service providers, such as information technology consultants or forensic
accountants (among others), may need to be involved in the investigation process, including
to provide specific advice in relation to narrow or discrete issues. In Australia, privilege can
attach to documents prepared by these third parties, provided the document was created for
1 See RBS Rights Issue Litigation [2016] EWHC 3161 (Ch), R v Paul Jukes [2018] EWCA Crim 176, and R v Serious
Fraud Office [2018] EWHC 856 (Admin).
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the dominant purpose of obtaining legal advice or for use in actual or anticipated litigation.
When engaging third parties, the engagement letter should clearly specify the limited purpose
for which those third parties are engaged, their obligations to maintain confidentiality, and
confirm that disclosure of any privileged documents to them will not constitute a waiver to the
world at large.
In Australia, whether ‘limited waiver’ arrangements are effective to allow disclosure of privi-
leged information to a regulator, while maintaining privilege against third parties, was examined
in Cantor v Audi Australia Pty Ltd [2016] FCA 1391. There, the Federal Court of Australia
considered whether legal advice disclosed to a German regulator in response to its requests for
information from the company during the course of its investigations maintained privilege for
the purpose of the Australian litigation. The Court held that privilege was maintained as against
the applicants, because the document had been provided in circumstances of confidentiality
such that any waiver of privilege was limited to the German regulator. That regulator had no
authority to waive that privilege, except to the extent compelled by law, which had not been
successfully forced upon the regulator. However, Australian courts are yet to authoritatively
determine whether ‘limited waiver’ arrangements are effective to allow disclosure of privileged
information to an Australian regulator, although at least one Australian regulator, the Australian
Securities and Investments Commission, offers a pro forma agreement to facilitate disclosure
of privileged information to it on a voluntary basis.
The UK decision in Property Alliance Group Limited v The Royal Bank Of Scotland Plc
[2015] EWHC 1557 (Ch) potentially offers some further guidance. There, the Court considered
whether communication with regulatory bodies in the course of an investigation was capable
of attracting privilege. It held that disclosure by individuals and entities to regulators will not
necessarily result in a waiver of privilege if it occurs confidentially and for the limited purpose
of the ongoing investigation. Such communications and disclosures are capable of retaining
privilege on the basis they are subject to a limited waiver in respect of the relevant regulatory
body only. However, importantly, the privilege may be lost if the party claiming privilege later
seeks to rely on the findings of the regulatory body with which it communicated.
There are also many other ways in which privilege can be waived. As confidentiality is an
essential precondition to the existence and maintenance of privilege, a waiver will often occur
where the actions of a party are plainly inconsistent with the maintenance of that confidenti-
ality. This can include where the substance of legal advice is disclosed in company announce-
ments, where legal advice is referred to in correspondence to support a position (including in
correspondence with regulators), or when the effect of legal advice is disclosed and recorded in
minutes of board meetings.
Where an investigation deals with cross-border subject matter, the company should take into
account the fact that rules regarding privilege can vary between jurisdictions, so that commu-
nications protected by privilege in Australia may not receive the same treatment elsewhere.
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© Law Business Research 2020Australia: Handling Internal Investigations | DLA Piper
Concluding comments
Internal investigations are an important tool for identifying, minimising and remediating actual
or alleged corporate wrongdoing. The way in which an internal investigation is conducted can
also have significant benefits for preparing for and responding to any associated civil and crim-
inal proceedings. Yet there is obviously no one-size-fits-all solution. The subject matter of each
internal investigation, along with any regulatory involvement, will shape the many forensic
decisions to be made during each investigation.
Having in place an appropriate regime for the effective conduct of internal investigations,
taking into account the topics outlined in this article, is viewed positively by Australian courts
and regulators as a sign of good corporate governance. Indeed, when used properly, the internal
investigations process is not only a valuable part of a company’s arsenal to respond to allega-
tions of wrongful conduct, but a deterrent to future wrongful conduct, thereby yielding an even
greater benefit to the company in the medium to long term.
Natalie Caton
DLA Piper
Natalie Caton, a partner with DLA Piper in Brisbane, advises multinational clients,
operating across an array of sectors, on how to proactively deal with a range of issues
concerning corporate reputation and risk management, particularly with respect to cross-
border and international business in emerging markets.
In this context, Natalie provides holistic, strategic advice to address corporate risk
throughout the business cycle, ranging from issue identification and pre-emptive risk
management to contentious regulatory investigations and disputes. This includes under-
taking risk assessments and devising risk mitigation strategies, the development, imple-
mentation and monitoring of practical and effective compliance programmes, advising
on approaches to corporate and executive (director and officer) reputation protection,
regulator liaison expertise and internal communication methodologies with respect to
anti-money laundering, bribery and corruption, modern slavery, sanctions, white-collar
crime, including financial crime and fraud, and, more generally, corporate compliance
and business ethics.
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© Law Business Research 2020DLA Piper | Australia: Handling Internal Investigations
Jonathon Ellis
DLA Piper
Jonathon Ellis, a partner with DLA Piper in Sydney, is an experienced investigations and
commercial disputes lawyer who has worked on some of Australia’s most complex and
high-profile investigations and disputes. Jonathon has been noted in The Legal 500 for
his expertise in regulatory compliance and investigations and as a rising star for disputes.
Jonathon’s prior experience includes conducting internal investigations including on
anti-bribery and corruption, internal fraud and corporate governance issues in Australia
and throughout the Asia-Pacific region as well as responding to large regulatory investiga-
tions. He also advises clients in regulatory or commercial disputes arising from internal
and regulatory investigations.
Gowri Kangeson
DLA Piper
Gowri Kangeson, a partner with DLA Piper in Melbourne, assists clients with complex
commercial disputes, regulatory enforcement and internal investigations including repre-
senting clients in high-profile corruption inquiries and providing assistance with related
employment inquiries and commercial litigation.
She has significant experience of regulatory investigations including the interrelation-
ship between civil litigation and regulatory issues, and also in investigating and litigating
fraud claims in a variety of contexts.
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© Law Business Research 2020Australia: Handling Internal Investigations | DLA Piper
DLA Piper is a global law firm with lawyers in the Americas, Asia-Pacific, Europe and the Middle East,
positioning us to help companies with their legal needs around the world.
We strive to be the leading global business law firm by delivering quality and value to our clients.
We achieve this through practical and innovative legal solutions that help our clients succeed. We deliver
consistent services across our platform of practices and sectors in all matters we undertake.
Our clients range from multinational, Global 1000 and Fortune 500 enterprises to emerging companies
developing industry-leading technologies. They include more than half of the Fortune 250 and nearly half of
the FTSE 350 or their subsidiaries. We also advise governments and public sector bodies around the world.
Our global investigations practice has handled some of the highest-profile investigations in the world.
With lawyers on the ground in more than 30 countries, DLA Piper clients benefit from multidisciplinary, multi-
jurisdictional teams that are quickly and cost-effectively staffed to address every type of corporate, regulatory
and internal investigation. Our lawyers regularly conduct criminal, regulatory and internal investigations,
defend clients in court when necessary, and develop or help develop proactive compliance programmes and
conduct internal audits.
Level 22, No. 1 Martin Place Natalie Caton
Sydney, NSW 2000 natalie.caton@dlapiper.com
Australia
Tel: +61 2 9286 8000 Jonathon Ellis
jonathon.ellis@dlapiper.com
Level 9
480 Queen Street Gowri Kangeson
Brisbane, QLD 4000 gowri.kangeson@dlapiper.com
Australia
Tel: +61 7 3246 4000
Level 21
140 William Street
Melbourne, VIC 3000
Australia
Tel: +61 3 9274 5000
www.dlapiper.com
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© Law Business Research 2020The Asia-Pacific Investigations Review 2021 contains insight and thought
leadership from 25 pre-eminent practitioners from the region. Across nine
chapters, spanning around 100 pages, it provides an invaluable retrospective
and primer.
Together, these contributors capture and interpret the most substantial
recent international investigations developments of the past year, with footnotes
and relevant statistics. They provide valuable background to help you get up to
speed quickly on the essentials of a particular topic. This edition covers Australia,
China, Hong Kong, India and Singapore in jurisdictional overviews. It also looks
at the impact of AI, data privacy, forensic accounting and law enforcement in
multi-jurisdictional investigations.
Visit globalinvestigationsreview.com
Follow @GIRAlerts on Twitter
Find us on LinkedIn ISBN 978-1-83862-268-8
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