Working with Witnesses in Regulatory Investigations
JOHN D FITZGERALD BL
“Regulatory”
Regulatory crime vs traditional/‘real’ crime
1. There is, of course, no separate defined or definable category of regulatory crime as opposed to what we might call traditional, or real, crime. Rather, for a variety of policy reasons, a number of matters are prosecuted as crimes without satisfying some of the ingredients of what we might traditionally consider components of the criminal law, such as some element ofmoral wrongdoing, or the requirement for some form of mental element, or intent, before a crime can be committed. Rather, regulatory offences are often for breaches of some statutory code to which the accused is expected to comply, and very often, there is a particular social purpose to that code, such as the protection of the environment, or health and safety[1].
2. In addition, there is often an evidential difference in the prosecution of regulatory offences, involving some form of burden on the accused to establish a defence or a set of facts which might exonerate the accused. Such provisions, known as ‘reverse onus’ provisions, are obviously an exception to the traditional burden of proof on the prosecution in criminal cases.
3. That said, it must be emphasised that what procedural or evidential differences there are between regulatory and ‘real’ crime apply later in the process, at the trial and penalty stage, and not to the preliminary investigative stage which is the subject of this paper. It is clear that the same principles of fair procedures (or natural justice) apply to those suspected of regulatory crimes as it does to all criminal defendants. For example, in Competition Authority v. Irish Dental Association[2] evidence obtained on foot of a defective search warrant was declared inadmissible by the Court. There was no suggestion in this case that the standard of natural justice was any different for the association the subject of the search warrant in that case than it would be for any other offender.
4. Rather, from the point of view of the investigative stage of the criminal process, the main distinction between regulatory and other offences is a practical one – regulatory offences are often much more complicated factually, involving several potential offenders (including corporations), repeated or continuous acts and very often a considerable volume of paper and electronic evidence.
5. From an investigator’s point of view, it is easy to see why this can present particular challenges.In a traditional crime, say a bank robbery, it is often very clear how many perpetrators there were and what precisely they are alleged to have done. The efforts of the investigator, therefore, are very often targeted towards identifying who those perpetrators are, and once they are identified, it is quite clear what their rights are and how the investigation must be conducted.
6. In regulatory offences, however, this is all much more unclear. At the outset of the investigation it may not be entirely clear what precise offences have been committed (if any) and, perhaps more importantly, who was involved in those activities.Given that the procedural rights of suspects apply to those suspected of regulatory offences, however, this presents a real difficulty for investigators in determining when those procedural rights kick in.
7. While this paper ostensibly covers two very different aspects of the investigative process, therefore – taking statements and search warrants – I believe that the underlying issues and difficulties which are peculiar to regulatory offences are common to both.
“Investigations”
What is the difference between an investigation and an inspection?
When does an investigation begin?
Do the same rules apply?
8. One of the features of regulatory agencies, as outlined above, is that they often involve an agency monitoring compliance with a statutory code, and a suspected breach of that code. As such, therefore, again unlike most criminal cases the starting point can be different. Rather than the investigation starting with a report of a bank robbery, therefore, there may be an initial stage of a routine inspection, in the course of which a suspicion of a breach arises. At some point, that suspicion might crystallise to some extent as to the nature of the breach, and the identity of those suspected of that breach.
9. Of course, the line between an inspection and an investigation, or the point at which the investigation progresses to the point of concrete suspicion is by no means a clear one, but is rather something of a continuum, but it is nevertheless a very important one as it is only at that stage that the persons or entities suspected of those breaches acquire the procedural rights referred to above.
10. In Re National Irish Bank (No.1)[3], two inspectors were appointed under the Companies Act 1990 to investigate the affairs of NIB in relation to the improper charging of interest, the improper charging of fees and the improper removal of funds from the accounts of customers. Prior to commencing their investigation, the inspectors sought the directions of the High Court on whether anyone they questioned was entitled to refuse to answer their questions. Shanley J held that they were not entitled to –
“It is clear from this letter that the inspectors propose a two stage procedure in their examination: the first, an information gathering exercise; the second stage, arising only when the first stage indicates it is possible that adverse conclusions may be drawn in relation to certain individuals dependant in whole or in part on the testimony of others. At the latter stage such individuals at risk will be entitled to attend, hear the evidence, cross-examine the witnesses, and give evidence themselves.” (p.153)
“I am satisfied that there is no entitlement to invoke the panoply of rights identified by the Supreme Court at the information gathering stage of the Inspectors' work. The procedures identified by the inspectors following the outcome of the first stage accord in my view with the requirements of fairness and justice and guarantee, where appropriate, the exercise of the rights identified in In re Haughey [1971] I.R. 217.” (p.168)
11. In the course of a later challenge by some individuals to the inspection in Re National Irish Bank (No.2)[4], Kelly J agreed, citing English caselaw to state:-
"Remember what it is not. It is not a trial of anyone, nor anything like it. There is no accused person. There is no prosecutor…It is simply an investigation, without anyone being accused."
Insofar as this jurisdiction is concerned that, in my view, is a correct summary of the position which obtains at least insofar as the investigatory stage of the inspectors' task is concerned. Once one moves into the second stage then, whilst the investigation is not transformed into an adversarial hearing, nonetheless fair procedures have to be observed insofar as any adverse conclusions may be drawn in relation to individuals. The procedure which the inspectors have outlined as one which they will follow if such a stage is reached is in complete compliance with their obligations to observe fair procedures under the relevant jurisprudence. It follows therefore, that I take precisely the same view as did Shanley J. that there is no entitlement to invoke the rights established in In Re Haughey [1971] I.R. 217, at the information gathering stage of the inspectors' work.”
12. Of course, as outlined above, in the course of many regulatory investigations there may be no clear dividing line between this ‘two stage procedure’. Instead, it may be more of a process as the true picture begins to emerge in the course of the fact-finding enquiry. I do not read the NIB cases as requiring any such clear distinction, and (as we shall see later) the courts do in fact recognise that there are shades of grey between these two stages. Nevertheless, it is very important for investigators to be aware of the distinction between fact-finding and investigation, and to be as clear as possible in their own minds where they stand in the course of their investigation.
“Witnesses”
What is the difference between a witness and a suspect?
When does a witness become a suspect?
Is there a difference between a suspect and a potential suspect?
Should I tell a witness that they may be under suspicion?
How much should I tell them of the nature of that suspicion?
13. Again, going back to the bank robbery example, in traditional criminal investigations it is often very clear who is the witness and who is the suspect. There is very little prospect of confusing the bank teller or the customer and the person with the balaclava. The bank teller and the customer are there to help the investigator by way of descriptions etc, the person in the balaclava is very clearly not, and is also very clearly entitled not to help the investigator should they so choose.
14. As indicated above, however, given the corporate nature of many regulatory offenders, and the complicated nature of the offences, it is often very difficult to establish (at least at the outset) who is who, and which side of the witness/suspect line each person is on. Indeed, they may not even know this themselves. The nature of much regulatory offending is that many people in an organization may potentially have some idea of what is going on, and may or may not have known that whatever it was was potentially illegal, and they may therefore be very reluctant to share that information with an investigator in case they implicate themselves further.
15. The challenge, therefore, for an investigator in dealing with witnesses is to encourage them to give as much helpful information as possible without being later accused of encouraging that information under false pretences. In other words, you don’t want to make a potentially helpful witness clam up, and on the other side, you don’t want to find that a helpful admission of wrongdoing is later ruled inadmissible for having been taken unfairly.
16. The line between a suspect and a witness has been considered by the courts in a number of cases which reflects the distinction between a fact-finding exercise and an investigation in the NIB cases above.
17. In DPP v. Breen (1995) the gardaí were carrying out a search of the accused's farm where it was suspected that guns, ammunition or explosives were likely to be hidden. Another garda who was not involved in the actual search, but who knew Mr Breen, was invited in by him. At that stage, neither of them knew what, if anything, had been found on the farm at this point. They had a general conversation about farming matters and his family when at some point they discussed the search at which point Mr Breen became agitated and said that “he had wanted several times to tell somebody about it but he was afraid”. The garda asked him to tell him what was troubling him. Mr Breen started banging the table with his fist and said "I can't talk. Don't ask me. I'll end up like those in the North" and he was crying. Garda Heverin stated that he was troubled and wanted to tell somebody about it, that it appeared to him to be connected with the searching of the lands and the farm buildings. He did not, however, administer a caution, but instead said "Tell me Sean”, after which Mr Breen made an admission.
18. In holding that this admission was inadmissible, the court held that he was quite clearly troubled and afraid, and had told the garda this. The garda“knew or ought to have appreciated that he was on the threshold of admitting some involvement in a crime relating to the use of his property for the purposes of a subversive organisation. In these circumstances he ought not to have been encouraged to make any admission without first being cautioned.
19. What made the statement of admission unfair, therefore, was that the garda knew he was a suspect, was afraid and should have appreciated that he was on the verge of making an admission.
20. The Breen case was distinguished in DPP v O’Reilly[5], the well publicised case in which Mr O’Reilly was widely suspected of having murdered his wife, but continued to protest his innocence to the extent of appearing on television to seek public assistance in finding her murderer. While it seems that the gardai strongly suspected him from the outset, they had very little direct evidence to support this suspicion and accordingly had a number of dealings with him (including taking a statement) when he was formally and outwardly a witness rather than a suspect. In what was very clearly a witness statement, Mr O’Reilly gave an account of the family background, family activities, work activities and his movements on the day when the murder occurred
21. In the course of his trial, the prosecution sought to rely on some portions of this witness statement, and he objected on the basis of the above case, namely that he had not been cautioned prior to making that statement.
22. The court, however, held that the previous statements were admissible and this was upheld on appeal as follows:-
“The notion or term ' suspect' has a rather elastic meaning. In the aftermath of a crime, particularly a crime as serious as murder, the investigating gardaí may have in mind a number of suspects. Indeed as the learned trial judge himself remarked, illustratively, after a serious crime the whole world is a potential suspect. One or more persons may fall particularly into the category of ' suspect' because of their presence and/or proximity to the scene of the crime at the time it was committed, or because of a particular marital, social or business relationship, with attendant circumstances, with the victim. As the learned trial judge observed, a person may fall into the category of suspect because of a person's particular attitude and demeanour as observed by the investigators in the immediate aftermath of a crime.