Ask yourself a question. If you had a serious heart problem and needed a bypass operation, who would you get to do it? An orthopaedic surgeon? Your GP? A junior houseman conducting his first heart operation? A consultant cardiologist who has undertaken several similar operations? Or a senior cardiologist eminent in his field? An orthopedic surgeon or a GP would not dream of undertaking major cardiovascular surgery, and indeed if they did they would be struck off, regardless of whether or not the operation was successful.
That is the difference between the medical profession and the legal profession. Many lawyers who are one page in the book in front of their client or have a briefing note from a trainee consider themselves to be instant experts. It is the culture of the enthusiastic amateur.
For example, the data protection directive and relevant national implementing legislation in all 27 EU member states gives rise to a number of major regulatory issues – despite the common joke among US lawyers for many years that Europe has lots of law but very little enforcement.
The climate is now changing. In the UK the Information Commissioner’s Office is asking for prison sentences of up to two years for individuals who access personal data without the knowledge and consent of a data controller. Meanwhile, the Financial Services Authority (FSA) has taken to fining companies that have lax data protection procedures for non-compliance with FSA rules on effective systems and control.
The tightening of regulatory controls can be seen in the recent case brought against Nationwide Building Society, where the FSA levied a fine of around £1m because Nationwide allowed customers’ personal data to be stored on an employee’s laptop, which was stolen from the employee’s home. Nationwide, it said, did not take effective measures to deal with the regulatory breach once it was known that the laptop had been stolen.
Traditionally in the UK data protection has been the preserve of IT lawyers because the Data Protection Act 1984 only applied to personal data stored on computers. But to hold that view is akin to saying that banking law should be the preserve of lawyers specialising in transportation issues simply because money is delivered to the bank in an armoured car.
The same can be said in the field of competition law. The coming into force of the Enterprise Act 2002 created a specific cartel offence. It also gave the Office of Fair Trading (OFT) powers to conduct compulsion interviews and interviews under caution.
In many future investigations brought by the OFT it will not be clear from the outset whether the investigation is civil or criminal, or indeed a mixture of both. This will mean, in order to preserve evidence trails, the OFT will need to proceed with the investigation as if it is criminal. It is potentially detrimental to the clients to allow competition lawyers whose only experience is dealing with mergers to deal with this type of investigation. Indeed, any competition team with such a matter would be remiss if it does not involve lawyers with experience of criminal law.
The current case that is pending against several pharmaceutical companies and their directors, who are under an allegation of conspiracy to defraud the NHS by price-fixing, shows that the Serious Fraud Office is prepared to use the common law offence of conspiracy to prosecute breaches of competition law. There is no guarantee going forward that companies and their directors may not also be charged with conspiracy to defraud in the alternative to the cartel offence.
When companies face significant regulatory risk, with the prospect of one or several members of the board being prosecuted for criminal offences, leading to major reputational damage, they need to be advised by regulatory specialists with a strong track record in dealing with the regulator in question on all relevant areas of regulatory risk.
What companies and directors who are facing regulatory investigations and potential criminal prosecutions need is not someone one page ahead in the book, but someone who knows the book inside out and who understands the author’s thought processes.