Internal Investigations Conducted in the United Kingdom: A Human Rights Law Perspective

I. Introduction

America has long been known as a society of laws, limited by a written guarantee of individual rights. In the U.S., the basic freedoms of religion, assembly and speech and the fundamental guarantees of due process (including the presumption of innocence, the right to remain silent in the face of government accusation, the assistance of counsel, measured punishment after conviction of criminal offenses, freedom from unnecessary government intrusion in private lives, and a promise of the equal protection of the laws) have long been regarded as part of the supreme law of the land, against which no legislative or executive action can stand. Indeed, the history of U.S. Constitutional law can be seen as a relentless progress toward the fuller realization and implementation of these guarantees of individual rights.

The law of Western Europe, as well, has shown an increasing tendency toward the recognition and legal guarantee of citizens' rights. In the immediate aftermath of World War II, a new emphasis on the language of human or constitutional rights was immediately discernible. At the regional level this was reflected in the adoption of the European Convention on Human Rights. That code has now been adopted into the substantive law of 40 countries and has been refined by the decisions of the European Court of Human Rights. In late 1998, the Human Rights Act was adopted by Parliament as part of UK law, and it has now been decided that this law come into effect on 2 October 2000. It is certainly the case that the Act requires that all public actions in Britain conform to the broad principals it sets forth, and it may also be the case that many private actions are included within its ambit.

It is clear that U.S. and UK law share a common goal which is to guarantee certain basic rights to their citizens against infringement by government agencies. But there may be a fundamental difference between the American system of guaranteeing rights and the UK's new Human Rights Act, and, if this is the case, it will be a difference which may pose serious difficulties for the management of international investigations of corporate misconduct. The U.S. Bill of Rights seeks to guarantee "freedom" by protecting the rights of the individual only against state encroachment. Thus, Congress may make no laws abridging an individual's right to speak, worship and associate freely, and the individual is entitled to notice of charges, counsel, open trials, proportional punishment and equal treatment with all other individuals under the law. Though, as we shall see, the point is not entirely clear, the new British Human Rights Act, on the other hand, appears to guarantee that the entire population will enjoy the same level of basic human rights. While there may be little difference in the content of the claims that any one individual may make in the U.S. or in the UK for protection of his or her own right to privacy, to a fair and public hearing, or to freedom of expression, there may well be a significant difference in the ambit of such claims as between the two jurisdictions. In particular, this may mean that each case under the Human Rights Act will raise issues of the balance of interests in society in a way that litigation over individual rights in the U.S. does not.

One example of this difference is examined in the following article. The U.S. has always had a strong public policy in favor of free enterprise. That public policy has been translated more often than not into the rights of businesses to exact from their employees obedience to policies that restrict or prejudice the employees' individual interests. While a company is subject to criminal charges, for example, it may escape penalties by showing that the improper acts under scrutiny were undertaken by individual employees without company approval. And while individuals have a right not to be compelled to incriminate themselves when being questioned by police, they have no such right when being questioned by their employers and may even be required to face the choice of incriminating themselves or losing their jobs. A different result might be required, however, under the new Human Rights Act in Britain. The basic human rights to protection from inhuman treatment, to a fair trial, to avoid punishment without the law, to privacy and to freedom of thought may be inconsistent with the demand that an individual choose between his job and jail.

II. Background

During the last quarter century, corporations have increasingly become targets of criminal prosecution in the United States. The purpose has been to increase the effectiveness of expanding regulatory schemes - in areas as diverse as the sale of securities, commercial competition and environmental protection - by charging the responsible corporations with criminal conduct and imposing substantial penalties, in the form of money forfeitures, loss of reputation and debarment from government contract programs. In some cases individual officers, directors and employees have also been charged with crimes when there has been substantial evidence of personal involvement in the corporation's misconduct.

As this process expanded, it became clear that U.S. government agencies would not be able to investigate most of the violations they suspected and that, in many cases, the activity, which was only newly classified as a crime, was being undertaken by employees or officers without the knowledge of the company and even contrary to the policies of corporate management or the Board.

In order to fill the gap between the large number of potential violations and the small corp of government investigators available to look into them, the U.S. Government began proposing incentives to corporations to conduct "internal investigations" of their activities, then to terminate improper practices and report their findings to the Government. The practice began in the 1970's with the U.S. Securities and Exchange Commission. At first, a provision requiring the company to conduct an internal investigation was incorporated in SEC consent decrees; later, the SEC and other agencies adopted programs which promised lighter penalties if corporations investigated themselves and reported misconduct to the Government before any official investigation had been commenced.

Spurred on by a rash of shareholder class action suits and product liability litigation in the late 1970's and 1980's, U.S. corporations began to conduct internal investigations of a wider range of problems, with confidential reports delivered to upper management or the Board. The use of internal investigations was further expanded in 1984 when the U.S. Congress imposed new and complex criminal Sentencing Guidelines on federal courts. The guidelines were designed to assure uniformity of sentencing for similar offenses throughout the federal court system. They created a system that determined a presumed sentence for each offense by means of a formula, which either increased or decreased the presumed sentence based on specified aggravating or mitigating circumstances. One way a corporation could reduce its potential penalty under the Sentencing Guidelines was by showing that, before the violation had occurred, it had established a program of training and oversight to assure that all employees would comply with the law, and that, once a potential violation was discovered, it had quickly investigated and taken corrective action.

More recently, U.S. prosecutors have also been required to provide assistance to victims of crime and to help them obtain restitution. An increasing awareness of economic crimes - including violations of copyrights, thefts of trade secrets and violations of computer security - have also led corporations to conduct internal investigations when they suspected that they might have been victims of crime and to turn the results of their investigations over to federal authorities in the hope of obtaining restitution.

It has, therefore, become commonplace in the last few decades for U.S. corporations to conduct internal investigations of any significant potential violation of law, either committed by or against them, and to use the results of these internal investigations to correct internal problems, avoid public investigations, defend themselves against criminal charges if they are brought or help a prosecutor understand how he or she can successfully prosecute someone else who has injured the corporation. In the U.S., these internal investigations are governed by reasonably well-developed rules. However, as the work of U.S. corporations continues to spread to Europe, as European corporations increase their investment in U.S. facilities and as the U.S. Congress pushes forward with efforts to protect the U.S. economy through criminal statutes aimed at activities occurring overseas, European companies and workers are increasingly becoming involved in internal investigations. It is not at all clear that the rules that apply to the conduct of internal investigations in the U.S. will necessarily govern this practice in the European legal context.

III. U.S. Rules for Internal Investigations

A. What is an "internal investigation," and why is it conducted?

An "internal investigation" has been defined as "an investigation by an organization of suspected illegal activity or other misconduct by its officers or employees." A principal objective of an internal investigation is "to find the facts and remedy the problems, including blunting public speculation of the degree and extent of wrongdoing." Significant reasons for undertaking an internal investigation include:

Allowing members of the Board of Directors to establish that they have acted diligently and exercised business judgment in responding to problems;
"Learn[ing] the facts in a careful way, thereby getting ahead of the curve and isolating the problem area[s] and/or employee(s)";
Limiting the distraction caused by a government investigation;
Deciding whether the corporation should alert the Government to a problem ;
Preventing prosecution for crime or establishing the factual basis for a defense;
Obtaining support for a claim for restitution ;
Reducing penalties;
Creating a positive public image; and
Restoring or reinforcing the confidence of regulators and the public.

B. Who Conducts an Internal Investigation?

It is generally agreed in the U.S. that internal investigations of serious problems should be conducted by outside counsel. Outside counsel are able to address the issues without preconceptions, and they do not suffer from potential conflicts of interest between their obligations to the corporation and to its individual employees, officers or directors. They are also generally perceived by Government as independent and reliable, and are able to devote the necessary resources to the task without disrupting other corporate functions. Outside counsel are also better able to establish and defend claims of privilege in order to protect the results of their investigation from unwanted disclosure and they will also generally have a better understanding than in-house counsel of how the prosecutor's office is likely to view the facts they discover.

C. What are the Steps in an Internal Investigation?

Taking Control

Counsel conducting an internal investigation must first make sure that the activity under review has been stopped. Counsel must determine precisely who the client is to be (i.e., the corporation, the Board of Directors, a group of outside directors, a special committee of the Board, etc.), then agree with that client on the purpose, scope, time frame, and expected cost of the investigation. Counsel should also review difficulties that may arise during the course of the internal investigation. In order to cover the entire investigation with a claim of privilege, the client should instruct counsel in writing, emphasizing that counsel's work is being undertaken in anticipation of litigation and for the purpose of providing legal advice on a broad range of issues.

Notifying Employees and Preserving Documents

Management should usually send a notice to all affected employees, officers and directors, informing them of the identity of counsel, the issues that counsel has been asked to investigate, the fact that counsel has been engaged to provide legal advice to the client in connection with those pending issues, and the need for confidentiality regarding the investigation. The notice should request employees to cooperate with outside counsel and their assistants and to preserve and produce, as requested, all documents relating to the matter. The company, by counsel, may also search the non-private spaces of employees' offices and computer systems for evidence.

Hiring Assistants and Bringing Them Within the Privilege

If counsel hires investigators, forensic accountants or other third parties to assist in the internal investigation, he must confirm to each assistant in writing that: 1.) he is to assist counsel in obtaining information on which to base legal advice; and 2.) he will report solely to counsel. All communications between counsel, assistants and the client and all other documents created in the course of the investigation should be marked with the legend "Attorney/Client Privilege; Work Product Doctrine; Confidential" and probably, if so marked, it will be protected from disclosure.

Reviewing Documents

Once the client has been identified, the scope of the investigation has been established, the employees have been notified and the investigation team has been brought together, the first order of business is to obtain and review all documents relating to the problem. Each of the employees, officers and directors involved in the matter under investigation should be notified in writing to produce all documents (on paper, electronic, videotape or other media) in their custody or control concerning the matter. Employees, officers and directors should be told that they may later be required to state under oath that they have searched for and turned over all relevant documents. The investigating team should gather, index and review all the documents for use in interviews.

Pre-Interview Questionnaires

Before beginning interviews, some counsel prefer to ask employees, officers and directors to complete and return questionnaires relating to the events being investigated. The responses can provide a general overview of the facts and identify key persons to be interviewed. However, passing out questionnaires also creates a further record of the events being investigated, which may not later be protected by a claim of privilege. For this reason, most counsel advise against using questionnaires and recommend that the team obtain information solely through personal interviews.

Interviews of Employees, Officers and Directors

It has been recommended that the interviews be conducted as the Government would conduct its own criminal investigation, beginning with informants, then progressing from the least important to the most important participants in the matter.

Dealing with employees, officers and directors who may be responsible for suspected wrongdoing can be difficult. In this area, U.S. law clearly prefers the interests of the corporation and its shareholders over the personal interests of individual employees, officers and directors. Under U.S. law, an employee, officer or director has a duty to cooperate with a corporation's internal investigation, even to the extent of disclosing his or her own improper or criminal conduct. Unless the internal investigation can be characterized as a proxy state action, the individual employee, officer or director has no Fifth Amendment right to refuse to give information that might subject him to criminal prosecution. If the employee, officer or director refuses to produce documents, to be interviewed, or fully and truthfully to disclose, without condition, what he knows, the corporation may impose discipline, including withholding bonuses, transferring, suspending or even firing him. But it must be careful that it does not appear to be retaliating against an employee who has reported the corporation's alleged misdeeds to a court, the public or the Government.

Disciplining an employee for refusing to cooperate with the investigation has risks (e.g., that the employee will become antagonistic to the corporation or that the Government will be alerted that something is wrong ), but it can also have the positive effect of encouraging other employees to cooperate and of showing, if only to Government investigators who later come on the scene, that the corporation position is one of intolerance towards improper conduct. This may eventually help reduce the penalties which are assessed against the corporation or even shift the focus of official attention to the individual employees, officers and directors and away from the corporation itself.

The internal investigating team will usually interview the corporation's present employees during working hours on company premises. An employee may or may not be given advance notice that he or she will be interviewed, although it is often best to provide notice, if only to increase the chance that the employee will have refreshed his or her memory and will therefore be in a better position to give a complete account of what he or she knows. For a variety of reasons, the counsel conducting the internal investigation will usually represent only one client (i.e., the corporation, the Board of Directors, a group of outside directors, a special committee of the Board, etc.) and not try to represent individual employees, officers or directors as well. In most cases, the employee, officer or director is not accompanied to the interview, even by an attorney. However, if he or she requests representation, the team may decide that it is prudent to allow private counsel to be present.

When the employee, officer or director has his or her own counsel and has interests similar to the corporation's, it may be appropriate to enter into a joint defense agreement between the corporation, the employee, officer or director and their respective counsel. A joint defense agreement allows information to be shared and defense strategies to be planned under the umbrella of privileged communications. However, the corporation should not enter into a joint defense agreement with an employee, officer or director until it has completed enough of its internal investigation to feel confident that its interests are and are likely to remain the same as that employee, officer or director's.

Perhaps the most difficult question under U.S. practice is what the internal investigating team should say to the employee, officer or director at the beginning of its interview with him or her. There is general agreement in the U.S. that the employee must be given at least the following information:

The subject of the interview;
That the investigating team represents the corporation (or Board of Directors, etc.) and, not the individual employee, officer or director;
That the conversation, and any related oral or written communications, are privileged and confidential;
That the privilege belongs to the corporation, not to the employee, officer or director, and that the corporation may waive that privilege without giving notice or obtaining consent from the employee, officer or director;
That counsel has been specifically authorized to conduct the internal investigation in order to provide legal advice to the corporation;
That the employee, officer or director has a legal obligation to cooperate with the internal investigation; and
That the employee, officer or director must not discuss the interview with anyone after it is completed.

One commentator has suggested that these points be made by means of the following "Model Warning":

As you know [your management] has asked you to meet with us as part of our inquiring into [the matter]. The purpose of our meeting is so that we can gather the information that we need, as counsel, to develop the legal advice that the company has sought and to prepare for possible litigation involving this matter.

I am a lawyer and I represent the company. I do not represent you or any other employee personally. This inquiry is being undertaken pursuant to the company's attorney-client privilege but the company may decide to waive the privilege at some point in the future. If the company decides to waive its attorney-client privilege, it can do so without getting your consent and without even consulting with you. To allow the company to maintain the privileged protection of the information we gather, it is important that you not discuss the substance of this interview with anyone.

Do you have any questions before we begin?

A few commentators have argued that the investigation team should go further and should expressly tell the employee, officer or director being interviewed that he or she:

May consult with an attorney before the interview;
May have an attorney present at the interview;
May decline to provide any information to the investigation team; and
That the statements made during the interview may be used against him or her.

One formulation of this minority group's "warning" is as follows:

I am not your lawyer, I represent the corporation. It is the corporation's interests I have been retained to serve. You are entitled to have your own lawyer. If you cannot afford a lawyer, the corporation may, or may not, pay his fee. You may wish to consult with him before you confer with me. Among other things, you may wish to claim the privilege against self-incrimination. You may wish not to talk to me at all.

What you tell me, if it relates to the performance of your duties, and is confidential, will be privileged. The privilege, however, requires explanation. It is not your privilege to claim. It is the corporation's privilege. Thus, not only can I tell, I must tell, others in the corporation what you have told me, if it is necessary to enable me to provide the legal services to the corporation it has retained me to provide.

Moreover, the corporation can waive its privilege and thus, the president, or I, or someone else, can disclose to the authorities what you tell me if the corporation decides to waive its privilege.

Also, if I find wrongdoing, I am under certain obligations to report it to the Board of Directors and perhaps the stockholders.

Finally, the fact that our conversation is privileged does not mean that what you did, or said, is protected from disclosure just because you tell me about it. You may be subpoenaed, for example, and required to tell what you did, or said or observed, even though you told me about it.

Do you understand?

It has been observed that this latter warning "conflict[s] with the employee's duty to cooperate [which is] implicit in the duty of loyalty" to the corporation and includes a warning not to speak which U.S. law requires only when the investigation is being conducted on behalf of the Government. But the line between private and government action may blur when a private corporation undertakes an internal investigation in order to turn information over to prosecutors or when a company in a highly regulated industry undertakes an investigation of whether it has violated government regulations, for the purpose of satisfying its reporting obligations under the law or to allow it to negotiate with the Government regarding an investigation that the Government has already begun.

Interviews of Third Parties

Although some contracts may specifically require third parties to cooperate with a company's audit or even its internal investigation and, in some extreme cases, a court may order that a witness? statement be preserved before any litigation has been commenced, the investigating team generally has no power of compulsion and can only interview third parties and review their documents by consent. Of course, any interviews of persons outside the company threatens the confidentiality of the investigation. When interviewing a third party, the investigating team will therefore confine its warnings to a statement of the matter being investigated and the identity of their client. Absent a joint defense agreement, third party interviews are not privileged, although the investigating team's memoranda and reports summarizing those interviews may be protected by either the Attorney-Client Privilege or the Work Product Doctrine.

Making a Record of the Interview

Whatever warnings the internal investigation team chooses to give, the interviews will generally be conducted in person, with two people present from the investigating team (one to ask questions and the other to take notes and be a witness to the answers given) and with no one accompanying the employee, officer or director. A verbatim recording or transcript is not usually made, but the note-taking member of the team will prepare a memorandum summarizing the interview, which may be shown to the internal investigating team or even the Government, as well as the client. The memorandum will not usually be provided to the employee, officer or director.

The interviews will follow the same approach that the Government would use in conducting an official criminal investigation. The employee, officer or director will be asked to tell what he or she knows and may be asked questions, but he or she will not be told what others have said. This procedure allows the investigating team to learn something by comparing stories and noting conflicts. Some employees, officers or directors may need to be re-interviewed as the investigating team learns more facts and focuses its suspicions and concerns.

Reports

uring the course of the internal investigation, counsel will confer frequently with the client, in order to keep it advised on progress and to obtain suggestions. These conferences are protected by the Attorney-Client Privilege and should not be recorded in minutes of the meetings.

Some clients may want interim reports to be provided in writing. To the extent that something must be reduced to writing, it will be marked "Attorney-Client Privilege: Work Product Doctrine; Confidential" and will be distributed to the client in a way that limits the possibility that anyone else will see it (e.g., by distributing numbered copies at a meeting and collecting them at the end of the meeting).

When the internal investigation is complete, the investigating counsel will make his or her final report to the client. It is often better not to render a report in writing, particularly when the investigation has disclosed evidence of criminal conduct, because the claim of privilege may later be successfully challenged by the Government or by opposing counsel in civil litigation. When the client needs to document its oversight, prompt action or reasonable response or wants to show a document to the Government in support of an argument not to prosecute or even to release a report to the public, a written report may be produced.

It is unclear whether statements made in a written report can form the basis of an action for defamation by individual employees, officers and directors. Counsel are therefore more circumspect in their written reports than they may be in their oral discussions with the client.

What to Do With the Information Obtained

Whatever form the final report takes, the client is faced with several questions. First, is it clear that illegal and improper conduct has been stopped and that systems have been put in place to prevent it from recurring? Second, does the corporation have an obligation to report the findings of its internal investigation team to a prosecutor, its shareholders or any one else? Third, can the results of the internal investigation be used to protect the corporation from criminal or civil liability? Fourth, should any action be taken against individual employees, officers or directors based on the results of the investigation?

As a general rule, U.S. law does not require a person to volunteer evidence that he or she or someone else has committed a crime. However, frequently in the U.S., the Government's interest in prosecuting a corporation for violations of the criminal law will be reduced if the corporation comes forward, confesses its errors, remedies the wrongs committed and takes appropriate action against the responsible individuals before the Government has become aware of the problem. In some cases, the corporation may be required by statute or regulation or in order to avoid making a misrepresentation to make a disclosure of what it has learned. In those cases, the corporation may conclude that it has something to gain from disclosing a written report of its conclusions.

U.S. law imposes no general obligation on the corporation to protect its employees, officers or directors in this process, and, while most corporations will want to minimize the harm resulting from past mistakes, in some cases the corporation's best defense may involve disclosing information that shows that particular individuals within the company were acting outside their authority and illegally. This argument can be strengthened by the corporation taking disciplinary action against individual employees, officers and directors and informing the Government that it has done so.

It has been said that "[e]very lawyer performing an internal investigation on behalf of a company. . .must implement the company's legitimate right and duty to make an exhaustive investigation of all pertinent facts, while at the same time protecting the rights of employees." However, U.S. law overwhelmingly favors the corporate entity and its shareholders over the personal interests in freedom and employment of the individual employees, officers and directors. While investigating counsel are obliged to act with a fair regard for the legal rights of employees, officers and directors, for the most part, that merely requires that counsel be clear in stating the nature of the assignment, the identity of the client and the client's right to make use of the information provided in any way that it chooses.

IV. The European Position

As U.S. corporate activities and the reach of U.S. criminal statutes are extended overseas, U.S. lawyers are more frequently called upon to conduct internal investigations in Europe. These internal investigating teams generally follow the same rules that apply in the U.S., and European employees are dealt with in the same manner as their U.S. counterparts. When American lawyers seek advice from lawyers in other countries as to the rights and obligations of citizens of those countries in an internal investigation, they may receive little help, because the practice of conducting internal investigations has not as yet become widespread among European companies and the issues presented by this activity have not yet been confronted. That they will be confronted seems inevitable in light of the range of rights instruments now to be found in European law.

We believe, that different rules may eventually be found to apply to internal investigations conducted within many European nations. As noted in our introduction, the language of constitutional rights has been to the fore in western Europe since the reconstruction that followed the end of the Second World War. This has meant that in many states issues relating to the applicability of constitutional rights in the private sphere have been sporadically rehearsed in litigation. With the growth in liberal constitutionalism after the end of the cold war in 1989, the picture across Europe has become more rights-centered than ever before.

Accompanying this geographical expansion of constitutional rights has been a further process in which layers of such rights have been laid down in European nation states. The most interesting developments here have been in relation to the European Union. Starting out as a purely market-based organization in 1957, the "Common Market" as it was then known has gone through various transformations in which its relationship with its member states has deepened to the point where it now claims not only to be a "community" of nations but also to constitute a new "European Union". In a way which is reminiscent of the Marshall U.S. Supreme Court in the first quarter of the nineteenth century, the European Court of Justice has grafted onto the Community's treaty obligations and powers a new language of human rights which has assisted it in securing its jurisdictional remit across the member states.

For present purposes we need to note not just the extensive deployment of the language of rights in the European Community but also the fact that it has underpinned several legislative interventions in the workplace, usually in the form of EC Directives which have frequently been extremely detailed in their construction and ambitious in their reach. Over time the EU law on workers' rights, equal pay and related issues has become a huge and frequently litigated part of the corpus of EU law. A recurring issue in this area has been the extent to which EU obligations which have undoubtedly been imposed upon the organs of the member states can also be said to have reached private employers. It has been in the guise of a debate about the "horizontality" of the application of such EU law that the old question of the lateral application of human rights norms in the private sphere has presented itself in the EU context, albeit frequently in the context of the application of detailed Community legislation.

The answers to the question of horizontality so far developed by the European Court of Justice have been rather on the technical side, with particular attention being paid to the breadth of the legislative instrument before the court and with the judges displaying as a result a clear reluctance to engage in generalized, constitutional-style rule-making. The issue of particular concern to this article has not been specifically addressed. However in recent years, the political momentum has been towards a far deeper engagement with constitutional rights than heretofore, with the language of human rights enjoying in post-cold war Europe a kind of irrepressible energy which has driven it further into community law and policy making. This has been evident both externally and internally, and has also been apparent in a reduction in the importance attached to the public/private divide, evidenced by the growth in the horizontal application of EU legislation, mentioned above.

This process is likely soon to reach its highest point with the establishment of a charter of fundamental rights for the European Union. The idea of setting out such a declaration of rights emerged in June 1999 and a draft has since been worked on by a 62-strong "convention" of members of the European Parliament, national parliamentarians and representatives of the fifteen heads of government in the EU. The expectation is that final decisions on the charter will be taken at the summit of government leaders scheduled for Nice in December 2000.

According to press reports, the early drafts of the charter promise European citizens fifty basic rights relating to employment, family life, discrimination, liberty and medical advances. According to the reports, workers will have confirmed the right to join unions and to strike, and will also be able to demand a limit on their working hours and enjoy "the right to reconcile their family and professional lives". The extent to which if adopted this charter will affect legal relations between private parties is not finalized, but it is inevitable that there will be some such impact. The whole tenor of the unfolding EU discourse on rights has been to move away from the traditional civil and political liberties model - where the focus is on the American-style protection of the individual from state interference - towards a new style set of "social and economic" rights which inevitably involve the imposition of obligations on others, either directly through legislation or indirectly through the increased taxation required to fund delivery of the rights which the state has chosen to guarantee.

The very least that this European union debate about a charter of rights is likely to produce is a renewed commitment to the principles underpinning the European Convention on Human Rights. This instrument agreed by the Council of Europe in the aftermath of the Second World War is now an international rights document to which no fewer than forty-one European states (including Russia and Turkey) subscribe. All the members of the European Union are signatories and of these all but Ireland have incorporated its provisions into domestic law in some shape or form. The Convention provides for a European Court of Human Rights in Strasbourg, in which individuals can secure redress against their own governments if they can show their human rights as set out in the Convention or one of its many operative protocols have been infringed.

In its basic form, the Convention fits within the traditional liberal model of a rights instrument, in that it mainly concerns civil and political liberties and requires state action before its provisions can be effectively engaged. To this extent it resembles the US model discussed above. However, even here it is interesting to note that a number of the provisions of the Convention and its protocols (such as on the right to education in the first protocol) reach beyond the sphere of the civil and political. There have also been occasions, admittedly exceptional, when the European Court of Human Rights has interpreted the Convention as imposing positive duties on member states to protect the rights of individuals within their jurisdiction. When this has occurred, the need for prior state action before the Convention is engaged has not been stressed, and the fact that such cases have arisen as a result of the actions of other private parties has meant that the effective (but still indirect) consequence of such litigation has been to impose at least negative duties on private parties. To this rather limited extent, therefore, certain of the provisions of the European Convention on Human Rights already apply in certain limited circumstances within the private sphere.

Apart from the European Convention on Human Rights, the Council of Europe has also produced other charters of rights which have been more specifically related to the workplace. In particular, the European Social Charter of 18 October 1961 together with its protocols offers a vision of employer-employee and employee-state relations which though grounded in the traditional vocabulary of rights offers a set of guarantees far removed from the liberal model from which this discourse has been derived. Though not directly justiciable in the way that EU law is, nor even indirectly invocable via a Strasbourg-style supranational court, the social rights set out in this Council of Europe charter provide a further indication of the pervasiveness of rights-talk in Europe at the start of the twenty-first century. These certainly impact directly on the relationship in the workplace.

If it is thought that the analysis of the European situation outlined here seems to offer little certainty as far as the impact of rights on the employer-employee relationship is concerned, then that effect is deliberate. At present, the direct impact of EU law or European Convention law on the topic under discussion here is slight. As noted above, there is no EU legislation governing the kind of potentially adversarial employer-employee relationship discussed in the first sections of this paper. Nor, as indicated above, is the Convention on Human Rights automatically or easily engaged by the actions of non-state actors, even where such conduct seems in the abstract to infringe one or other of the rights set out in that document. The only two points that can be made with confidence at present are firstly, that the politics of the new European order is increasingly being recast in the language of rights, and secondly that this new vocabulary balks less and less at trespassing upon the traditional divide between the public and the private that has in the past protected non-state actors from obligations that have been imposed on public authorities.

V. The Human Rights Act 1998

The European Union has not developed, and may never develop, to the point where we would be correct to assume that the only rights analysis that matters is that conducted on the European level. In fact the situation is the reverse. As noted above, all the members of the European Union except Ireland have incorporated the European Convention on Human Rights into their domestic law. It is through the national judicial authorities therefore that in most cases rights analysis is conducted, albeit on the basis of (or at least partly on the basis of ) this European rights document. It is therefore primarily to the domestic level we must look to see how in practice the employer-employee relationship which is the subject of this article is likely to be affected by the imposition of the new language of human rights to which we have drawn attention.

The fluidity of the current European position on rights, the complex interaction of European and domestic constitutional norms, and the potential for the radical engagement of rights-analysis in the private sphere are all well-demonstrated by the United Kingdom's Human Rights Act. This measure was enacted by the United Kingdom Parliament in 1998, and as noted in our introduction became fully operational in October 2000. Uniquely within Europe, the United Kingdom did not prior to this legislation have its own domestic code of rights, on the United States, Canadian, German or Italian (or indeed any other) model. Instead, rights were merely the product of legislation, and were as a result tightly focused and aimed at specific mischiefs. The description "human" was inappropriate to describe these rights as they were the product not of some abstract reasoning about the human condition, nor even an adjudicative determination based upon the application of a constitutional code, but were rather (merely) the legislated consequences of the cut and thrust of political debate.

The Human Rights Act changes this approach. The Act introduces into UK law most of the substantive rights in the European Convention on Human Rights (section 1 and schedule 1). These include: the right to life (Article 2); the right not to be tortured or subject to inhuman or degrading treatment or punishment (Article 3); the right not to be enslaved (Article 4); the right to liberty and security of the person (Article 5); the right to fair procedures in civil and criminal proceedings (Article 6); the right not to be subjected to retrospective punishment (Article 7); the right to respect for private and family life (Article 8); the right to freedom of thought, conscience and religion (Article 9); the right to freedom of expression (Article 10); the right of association (Article 11); and a general prohibition against discrimination in the enjoyment of these rights (Article 14). Protocols guaranteeing rights of property and to education have also been included in the Act.

Inevitably, there are uncertainties of meaning even in relation to the most unqualified of these rights (such as on life, torture and slavery for example) and there are also further uncertainties in relation to the provisos and qualifications that apply to most of these guarantees. The Act requires regard to be had in the application of these rights within the UK legal order to the judgments of the Strasbourg Court of Human Rights; it should be noted that such decisions are not "precedents" in the traditional British sense but that it will be mandatory to take them into account where they are relevant to a given judicial decision (section 2). It is the expected influx of this huge range of new data from a previously largely unknown court that has precipitated the surge of training which has been so evident among UK lawyers and judges over the past two years.

It will be obvious that not all of the rights set out in the Act will have the potential to impact on the employer-employee relationship. Of those that do, clearly relevant will be the right to respect for private life and the right to liberty. There may also be issues of freedom of conscience, expression and of assembly that arise in the employment sphere and engage the Convention rights. In certain extreme circumstances it is not impossible to imagine ways in which Article 3's prohibition on (inter alia) degrading treatment might arise. So while the Convention is not as such aimed at private relations, much depends on precisely how its terms have been introduced into UK law by the Human Rights Act.

It is when we turn to this inquiry that we see the potential for the lateral application of the Convention in UK law. While Acts of Parliament will not be capable of being struck down for inconsistency with the Convention rights, under section 3(1), each and every provision of every law, passed and to be passed, will be required "[s]o far as it is possible to do so" to "be read and given effect in a way which is compatible with the Convention rights". This appears to be a remarkable new principle of statutory interpretation, requiring the review and if necessary revision of all pre-existing case-law concerning the interpretation of every single provision in the statute books. Of course most such clauses may not raise a Convention issue, but over time all will have to be glanced at, however quickly, to assess whether they raise any Convention issues. Moreover, the Act would appear to permit the lowest judicial tiers in the state, and even all tribunals in which legal proceedings may be brought, to set aside pre-existing precedents, no matter how august or previously authoritative, where a lack of fit with any Convention right has been detected.

Interestingly, the Act makes no distinction between legislation governing the public and the private sector: all Acts will be subject to section 3 regardless of their remit. To the extent that private relationships are governed by legislation, then the Human Rights Act will certainly involve a review of the present law from a Convention perspective. Where no such legislation exists, as is usually the case with the kind of employer-employee relationship which is the subject of this article, different considerations will apply.

The starting point in such cases will be section 6(1) which declares that it "is unlawful for a public authority to act in a way which is incompatible with a Convention right." Under section 7(1), "a person who claims that a public authority has acted (or proposes to act) in a way which is made unlawful by section 6(1) may - (a) bring proceedings against the authority under this Act in the appropriate court or tribunal, or (b) rely on the Convention right or rights concerned in any legal proceedings." Under section 8(1), "[i]n relation to any act (or proposed act) of a public authority which the court finds is (or would be unlawful), it may grant such relief or remedy, or make such order, within its powers as it considers just and appropriate."

The first question of importance here is as to what is meant by the term "public authority". It will be vital to many organizations to escape the label in order to avoid the large and uncertain range of new statutory duties that would otherwise flow from section 6(1). The phrase is however not defined in the Act. Clearly it will include the civil service, the police, the army and other direct offshoots of governmental power. Undoubtedly the term will also reach local government, the activities of the national health service, state schools and other manifestations of state action. The BBC is probably within the term since it is a broadcasting company closely connected to (albeit at an important arm's length from) the state. The same can probably be said of the Church of England which is the established church south of the border with Scotland. It is an open question whether suppliers in monopoly or quasi-monopoly positions in the market will find themselves, or certain of them, classed as public authorities for the purposes of the Act.

Self-evidently, many of these "public authorities" are large-scale employers, and some at least of them are engaged in commercial or quasi-commercial activity. Other bodies which are not explicitly public in the formal way in which these authorities are may nevertheless be engaged in public functions. As far as such organizations are involved, the Act specifically states that "public authority" includes "any person certain of whose functions are functions of a public nature" (section 6(3)(b)). But in a qualification that may prove of importance, "[i]n relation to a particular act, a person is not a public authority by virtue only of subsection (3)(b) if the nature of the act is private" (section 6(5)).

It will be immediately obvious that what we have here is a piece of legislation that could almost be said to have been designed to lead to satellite litigation. When is an organization a public authority simpliciter? If it is not such a body, when does it engage in functions of a public nature? If it does, are the functions under scrutiny in this case public in this sense or are they private? As indicated above, the consequence of these questions being answered in a way which causes the organization to be classed as a public authority under section 6(1) may well be momentous.

Thus, to take the subject matter of this article, an employee of a "public authority" for section 6(1) purposes who is the subject of an internal investigation would be able both to rely passively upon and positively to assert the following rights directly against his or her employer:

The right not to be subjected to torture or to inhuman or degrading treatment or punishment (Article 3 of the Convention).

While the torture prohibition will rarely if ever arise, the remaining conduct prohibited by the article may be arguably encountered in the course of the kind of robust inquiries with which we are concerned. An important element to factor into this analysis is the case-law from Strasbourg, where a wider approach has been taken to what constitutes "degrading treatment or punishment" than might at first glance have been expected. The term "degrading" is particularly open-ended in this regard.

"Everyone has the right to liberty and security of the person" (Article 5(1)). The right to security of the person is an unqualified right in the Convention system and its meaning has yet to be fully developed or clarified. The right to liberty may only be limited in certain situations and then only "in accordance with a procedure prescribed by law". In many instances of employee interrogation or questioning, the restriction on liberty that may be involved might not be self-evidently in accordance with any procedure set out in law in the way required by the Convention. Even if it is, the purpose of the "detention" may not pass muster under Article 5: the most promising exculpatory provisions would be Article 5(1)(b), "the lawful arrest or detention of a person ... in order to secure the fulfillment of any obligation prescribed by law" or Article 5(1)(c), "the lawful arrest or detention of a person effected for the purpose of bringing him before the competent legal authority on reasonable suspicion of having committed an offence or when it is reasonably considered necessary to prevent his committing an offence or fleeing after having done so." It may be that not all interrogations have these end goals to the fore. If Article 5(1)(b) is relied upon, the case seems to be taken to identify clearly the obligation described by law on which it is proposed to rely.

"Everyone who is arrested shall be informed promptly, in a language which he understands, of the reasons for his arrest and of any charge against him" (Article 5(2)).

Clearly the Convention's clauses on liberty have been designed with the police power primarily in mind. There is a certain peculiarity in applying it to public authorities or private bodies engaged in public functions in the way that we are doing here. Nevertheless, in the absence of consent/waiver of rights (discussed below), Article 5(2) would indeed seem to apply to the internal investigation insofar as it involved the "detention" of the "suspect" employee.

In the context of this liberty right, three further provisions of the Convention need to be noted.

First, under Article 5(3), "everyone arrested or detained in accordance with the provisions of paragraph 1(c) of this Article [see above] shall be brought promptly before a judge or other officer authorized by law to exercise judicial power ....".

Secondly, and perhaps more relevantly for present purposes, Article 5(4) requires that "[e]veryone who is deprived of his liberty by arrest or detention ... shall be entitled to take proceedings by which the lawfulness of his detention shall be decided speedily by a court and his release ordered if his detention is not lawful". This provision points to a requirement for access to legal advice and to the courts for those detained by agents of what can be characterized as a "public authority" under section 6 of the Human Rights Act. Much will depend on what is meant by "speedily".

Thirdly, Article 5(5) guarantees to "[e]veryone who has been the victim of arrest or detention in contravention of the provisions of this Article .. an enforceable right to compensation." It is perhaps this provision more than any other that suggests that a degree of caution is called for on the part of public authority employers or employers at risk of being designated public authorities, at least until the precise breadth and range of the Human Rights Act is conclusively determined at the highest judicial levels.

"In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law" (Article 6(1)).

The kind of inquiry with which we are concerned is not designed to produce a definitive ruling adverse to an employee, but is more investigative in nature, and better characterized as intended if appropriate to lead to such proceedings. It is not obvious therefore that Article 6(1) is engaged. However, employers potentially caught by Section 6(1) of the Act need to be aware of the provision when designing disciplinary and other retributory mechanisms against employees found to have been culpable.

"Everyone has the right to respect for his private and family life, his home and his correspondence" (Article 8(1)).

In a series of decisions, the European Court of Human Rights has emphatically extended this guarantee to the office life of employees. It is possible that these authorities will be followed in the United Kingdom. Many of the actions of investigating authorities in the kind of situation which we are discussing will easily be characterized as involving an infringement of the employee's rights under Article 8(1). Much will therefore depend upon whether Article 8(2)'s justification for such breaches can be satisfied. This part of the Convention permits breaches of Article 8(1) where these are "in accordance with law", "necessary in a democratic society" and designed to achieve a variety of legitimate aims, including "the protection of the rights and freedoms of others". While the latter hurdle may not be too difficult, public authority employees will need carefully to design their conduct with Article 8 in mind, particularly the requirements of legality and necessity set out in Article 8(2).

"Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers" (Article 10(1)).

This right is then subject to a number of qualifications similar to those to be found in the privacy provision, discussed above. Clearly, the provision will be relied upon by employees whose alleged or suspected wrongdoing has related to the dissemination of corporate information. It may underpin defenses to action by a public authority quite separate from and additional to any specific legislation that might also be in place.

Other relevant articles may include the right to association (Article 11), the right to freedom from discrimination in the enjoyment of Convention rights (Article 14) and the qualified right to property to be found in Article One of the First Protocol, with the latter being particularly relevant if personal possessions of suspected employees are removed from his or her control.

The above set of rights clearly have the potential seriously to impact on current patterns of internal investigations, at least where these are done on the basis of the US model discussed in this article. A key question raised briefly above but needing now to be directly addressed relates to consent or waiver or acquiescence in relation to these rights. This may seem a paradoxical assertion - that "human rights" can be waived or otherwise dispensed with - but in the context of a complex legal document like the European Convention on Human Rights it is a fundamental one.

The case-law of the European Court of Human Rights, and more particularly of the now superseded Commission, makes clear that rights can indeed be waived. The point has arisen mainly in relation to Article 6, but there is no reason in principle why the principles that have underpinned resolution of the issue in that context should not have a broader effect. In particular, the distinction that has been drawn between the voluntary and the compelled forgoing of one's rights is likely to be frequently made. In this regard, of course, much will depend on what is meant by a "voluntary" waiver of one's rights. Does a contractual term to which one has technically (if not consciously or knowingly) agreed, and which nowhere explicitly makes clear that rights are being waived, amount to a voluntary waiver of such rights? If the fact of such a waiver is drawn to the employee's attention at the time the contract is signed sufficient to amount to a waiver of such rights in futuro? Will it make any difference if the only alternative to signing such a contract is to seek work elsewhere? What will be the position if, in the absence of such a contractual term, an employee under suspicion is asked to "sign away" their "human rights", and accedes to this request, immediately prior to the launching of an investigation? No doubt there will be litigation in which these points are likely to be settled, but once again the prudent public employer, or quasi public employer, will be keen to put systems in place which minimize the risk of future litigation.

Up to now we have concentrated on the potential impact of the Human Rights Act on those employers who are classed as public authorities under the Human Rights Act. Where legal persons are not public authorities per se but where "certain of [their] functions are functions of a public nature", then as we have seen, under section 6(3)(b) these bodies may find themselves classed as public authorities, albeit with the caveat, noted above, that "[i]n relation to a particular act, a person is not a public authority by virtue only of subsection (3)(b) if the nature of the act is private" (section 6(5)). So the employment of persons by a body not a public authority as such might not leave such a body open to direct action under section 6(1), even though certain of its "public functions" would continue to attract the new human rights-based duty. If the disciplinary or investigative activity is done at the behest of a public authority then this would seem to make more likely its characterisation as a public function.

A broader immunity would seem to be accorded private employers none of whose functions are in any way public, or capable of being characterized as public by even an expansively minded court. At first glance and on the basis of all we have so far said, the Human Rights Act would appear to have little effect on the conduct of such bodies, both generally and in relation to the employment of persons. The emphasis in the Human Rights Act on public authorities, considered above, certainly would suggest that this interpretation of the Act is correct.

However, there is a complication, and it is one which has already caused no end of debate in the United Kingdom. Under section 6(3)(a), the term "public authority" in section 6 is specifically said to include "a court or tribunal". As a result a coherent argument has developed to the effect that even in actions between two private parties, the court as the "public authority" in the case will be bound to act in a Convention-compatible way or it will itself face the allegation, on appeal, that it has been in breach of its section 6(1) duty. The counter-argument to this in the literature is that the effect of this reasoning would be to collapse the distinction between public and other bodies, a distinction the Act appears to have regarded as fundamental.

It is too early to tell how this fundamental issue will be resolved. The prevalent but by no means unanimous view is that while there will be no action for breach of section 6 capable of being invoked de novo by one private party against another, it will nevertheless be possible for pre-existing causes of action to be energized and if necessary developed in the light of the Convention. On this view, the courts will be under a section 6(1) duty to develop the common law in a way which is compatible with the Convention.

This seems to have been what the government intended when it proposed to Parliament that its definition of public authority include the courts. Of course the distinction between developing the common law and creating new remedies is a difficult one always to make with clarity. In the context of the internal investigations we have been discussing here, an action for false imprisonment might be "uplifted" by reference to Article 5; an action for assault and/or battery might be transformed in the light of Article 3; and a new action expressing a regard for privacy but rooted in the old law of nuisance and/or breach of confidence might be developed. Contracts of employment may come to be interpreted by the courts as involving a new duty on employees to respect human rights, in particular an employee's right to privacy. If all this does occur, then - subject to waiver - employees may find themselves with a whole new range of defensive weapons in their legal armoury when faced with internal investigations.

VI. Conclusion

Our inquiry here has been limited to the employer-employee relationship. It will be obvious that the Human Rights Act discussed above also has far reaching implications for the state regulation of business, not least in the new requirement that all regulatory authorities respect the human rights not only of employers and employees but also of the businesses themselves. Already the United Kingdom's proposed reforms to the regulation of the financial services sector have been profoundly affected by a late appreciation of the human rights issues that are now - after enactment of the Human Rights Act - necessarily involved in any such initiative. The effect of the Act on international co-operation between regulatory authorities is also an issue of immense importance, but beyond the scope of this article. What is clear is that the European Court of Human Rights has asserted a capacity for the extra-jurisdictional scrutiny of foreign law and practice for human rights compliance, and it remains to be seen how widely this power will be deployed and in what contexts.

The lessons to be drawn from this brief excursus into European and UK human rights law are necessarily not easy to draw. The subject is in a state of flux. By the end of this year, we will have a clearer idea of what the new EU Charter of Rights will entail as a matter of law. During the next five years, the effect of the Human Rights Act on UK law in general and on the employer-employee relation in particular will become clearer as decisive rulings are given by courts with precedential authority. It is altogether too early to say with confidence what those rulings will be. The Human Rights Act permits of too many alternative meanings for there to be even a technically correct answer waiting to be discovered: the judges will have many credible interpretive roads down which they will be able without absurdity to go.

In terms of anticipating eventual outcomes, therefore, a high degree of caution is required. But the large themes in European and UK law that lie behind these recent developments on human rights are unlikely to disappear or wholly to dissipate. Thus, we can expect a greater rather than a lesser reliance on the language of rights in the years ahead. We can expect that language to be translated into justiciable obligations more widely and more deeply than in the past. Furthermore, as the end of the cold war is accompanied by an increasing level of privatization in western economies, we can expect the European courts to be more prepared that they might in the past have been to allow the legal dictates of human rights law to infiltrate a market in which more and more functions previously thought to be public are being undertaken by the private sector. If this does turn out to be the case, it may well be the prudent employer, both private and public, who has planned on the basis of this outcome, who will have least cause to feel disadvantaged or inconvenienced.

Richard Wiebusch

Hale and Dorr

[email protected]

Conor Gearty
Matrix Chambers

This publication is not intended as legal advice. Readers should not act upon information contained in this publication without professional legal counseling.

Internal Investigations Conducted in the United Kingdom: A Human Rights Law Perspective

Internal Investigations Conducted in the United Kingdom: A Human Rights Law Perspective

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