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Ruling on seized documents significant – Matheson

Lawyers at Matheson say that a recent High Court judgment is significant for any company facing a regulatory investigation.

The case centred on the treatment of legally privileged documents seized during visits by authorised officers of regulatory bodies, sometimes known as ‘dawn raids’.

In Commission for Communications Regulation v Eircom Limited, the regulator ComReg sought approval for a ‘step plan’ aimed at excluding any irrelevant or legally privileged documents from the 320,000 it had seized during a dawn raid at the premises of Eircom Limited (Eir) last year.

Electronic searches

ComReg had proposed that it would conduct electronic word searches on the seized data to seek to exclude any legally privileged or irrelevant material.

Eir, however, submitted that it would be more appropriate for it to conduct these searches, to preserve confidentiality over the legally privileged documents.

In a note on the firm’s website, the Matheson lawyers explain that the Communications Regulation Act 2002 provides, in the event of a dispute, for the High Court to determine whether documents are legally privileged

‘Serious powers’

The court held that it was "not obligated to individually review each document to make a determination", and that it had the power to approve a step plan, such as the one put forward by ComReg.

The court found that the act required ComReg to maintain Eir's confidentiality while conducting the search, noting that this could not be 100% guaranteed in a practical sense.

In finding that ComReg was entitled to conduct the electronic searches, the court referred to the policy reasons underpinning the "very serious powers" conferred on ComReg, adding that allowing Eir to conduct the searches would "undermine to a very significant degree the investigative powers of the regulator and, so, one of the purposes of the [legislation]”.

Co-operation with regulators

The Matheson lawyers note that there are more than a dozen regulators in Ireland with the powers to seize documents.

They also highlight the court’s emphasis, in this case, on the importance of co-operating and working proactively with regulators, particularly once an investigation has started.

“The court expressly noted that it would have expected the regulated entity (Eir) to have engaged with the regulator to agree the scope of the searches to be conducted. The court further noted that the lack of engagement in this case resulted in the investigation stalling for a number of months,” the Matheson note adds.