Special report: legal risk
Top ten legal risks | Keep your company on side with the law | The regulators: who's who | NatWest Three: could you be next? | What's my liability as a company director? | Get ready to be raided | Defective documentation | Survive an FSA investigation | Employers watch out

“Dawn raids” are a common occurrence in today's business world. The headlines have a familiar ring: "OFT raids JJB over claim of price-fixing". "Sweet & Maxwell to confirm dawn raids".

By its nature, a dawn raid will be a surprise. The company being raided will not receive warning that the raid is taking place. But it is possible — and strongly advisable — for companies to prepare for the eventuality. It is increasingly important for companies to understand what happens during a dawn raid and to have a protocol in place to deal with a raid if it should occur.

Dawn raids are carried out by the police and numerous other Government bodies as part of investigations into unlawful activities. Authorities with power to carry out dawn raids include Revenue & Customs, the Financial Services Authority, the Office of Fair Trading, the Serious Fraud Office, the Health and Safety Executive and the European Commission. Increasingly, investigators are required to obtain information by foreign countries for transmission abroad.

It is important to understand that a dawn raid may take place even where the company and its directors are not suspected of any wrongdoing.

If a regulator is investigating a third party such as a dishonest employee or another business with whom the company may have dealt, the dawn raid powers are triggered merely if investigators suspect that the company or directors have relevant documents in their possession.

If the investigators believe that an individual is holding relevant documents at his home, they also have power to obtain a further warrant to enter domestic premises and seize those documents.

Once in possession of a warrant, the investigators must be granted access, and they can use reasonable force if necessary. Attempting to obstruct investigators' access is a serious criminal offence.

Most dawn raids start with investigators arriving at the beginning of the working day. In some situations a dawn raid may actually begin at dawn.

Once inside the premises, investigators search through company books, records, memoranda and emails. The investigators will ask for copies of certain files and require the business to compile information it does not directly hold.

For example, a business may be required to put together information on sales figures that it cannot locate or has misplaced. The investigators may also bring in an expert to recover electronic files that have been deleted, and they will check for documents in other places, such as in employees' cars.

In the course of the search, individuals may be questioned. Questioning may not be limited to the directors. Often, the company's employees are asked to answer questions. Giving false information is a criminal offence punishable by up to two years imprisonment. In addition, individuals may subsequently be required to attend a compulsory interview and produce any documents requested. At the compulsory interview, an individual is compelled to answer and may not refuse to answer questions.

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