Private investigators - mitigating the risks

Working with an unregulated private investigation firm can have serious consequences for a law firm’s reputation and its client relationships. The unscrupulous actions of disreputable private investigators and tracing agents have been thrust under the media spotlight in recent months, amplifying the irreparable reputational damage that can be done and highlighting the need for the legal profession to be very careful who they choose to work with.

This can be more difficult than might be expected when dealing with what is still an unregulated industry. Astonishing though it might seem, private investigators in the British Isles are still not subject to any form of regulation or licensing whatsoever. Whilst the concept of mandatory licensing and competency testing of investigators and surveillance operatives in the private sector was introduced by the Private Security Industry Act 2001, it was halted when the coalition Government suspended the ongoing work of the Security Industry Authority – a decision that has since been reversed, albeit no decision has yet been made on the licensing of private investigators. Today, therefore, unethical practitioners with no formal training remain able to set themselves up as private investigators, with their disregard for the law putting legal firms and their clients at great risk.

Due diligence needed

Indeed, the Information Commissioner’s recent parliamentary report “What Price Privacy” includes evidence that suggests a flourishing and unlawful trade in confidential personal information by unscrupulous private investigators and tracing agents. The report highlights many businesses that regularly turn to private investigation firms, and through them to the shadier end of the market, requesting or receiving confidential personal information that they must know or suspect has been unlawfully obtained. Whilst not necessarily a widespread issue, it is apparent that insurance companies, local authorities, solicitors, finance companies, and other lenders are implicated in this trade, and that unethical elements of the private investigation industry appear willing to defy the law and provide the information requested.

The risks to the legal profession of unwittingly hiring unethical private investigators or using unlawfully obtained information are immense – from prejudicing the outcome of a case and harming a client’s interests, to damaging a law firm’s reputation or brand irreparably. A failure to conduct due diligence on an enquiry or precognition agent may also, in certain circumstances, militate against a successful professional indemnity claim. Knowingly procuring unlawfully obtained information or provably turning a blind eye could lead to a criminal prosecution.

In light of the scale of unethical and unlawful practitioners operating as private investigators, and the damage that they can impose, it is imperative that law firms carry out effective due diligence on the enquiry or precognition agent that they intend to instruct. The Association of British Investigators (ABI) is the professional body for investigators in the private sector. It is the only industry organisation that actively self regulates members, undertaking stringent vetting (including Criminal Records Bureau checks, and rigorous complaints and disciplinary procedures). Endorsed by the Law Society of England & Wales and the Law Society of Scotland, the ABI acts as a one stop shop for due diligence when a legal firm has a need to hire a private investigator or precognition agent.

Case study

With over 230 staff in offices in Edinburgh and Glasgow, Burness Solicitors is one Scottish law firm which protects its reputation by having a policy only to work with a private investigation firm that is a member of the ABI.

Colin Hulme, partner and Head of Litigation, has a team which specialises in the protection of intellectual property and regularly outsources investigative work to a local private investigation firm which is an ABI member.

Hulme explains: “We work for brands and large corporations looking to protect their intellectual property. Whilst Burness undertakes a significant amount of background desk-based investigation activity in-house for our clients, it would be inappropriate for us to undertake certain work, such as ‘mystery shopping’ or covert surveillance.

“We have been working with one particular firm of enquiry agents for five years now, and firmly believe that they offer genuine value – additional intelligence delivered in the early stages of a dispute is often the key factor that shapes the final outcome and can save thousands of pounds in unnecessary legal costs. Our clients are often impressed by the role played by our outsourced private investigation work and the intelligence that it delivers.

“To cite an example, we deployed our private investigation firm to undertake investigations on behalf of a manufacturing client concerned that it was the target of deliberate product contamination. Whilst only briefed to make one initial site visit, the private investigators went above and beyond the call of duty and made two further trips, which resulted in intelligence proving that the contamination was in fact a local issue and not concerned with our manufacturer client. This evidence turned a corner in the case and saved considerable time and money.”

Further support

He adds: “Law firms and their clients are at genuine risk if they use intelligence gathered by inappropriate forms of surveillance. Our clients are not interested in receiving information from illegitimate sources – however valuable it might be to resolving a case. I would certainly see no reason why lawyers would expose themselves to regulatory and reputational risk for the sake of appointing an unregulated private investigator to act for them and their client – it is just not worth it.

“My team has built a trusted relationship with a private investigation firm with credentials and registrations that can be trusted, and through whom we have access to a worldwide network of trusted advisers and agents. They have even provided us with training – delivered by a team with over 100 years’ policing experience – that has benefited our brand protection practice immensely.”

The legal profession is committed to maintaining the highest standards and protecting both its own and its clients’ reputations. Minimising the risks of hiring unethical private investigators or using unlawfully obtained information is an important step in living up to this commitment. Finding a member of the Association of British Investigators is simple: members are listed on the Association’s website at www.theabi.org.uk, and can be identified personally by name, business name or geographical location using either a search facility or a map.