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Cultural factors can sway regulator penalties – ALG

Any lawyer working with a foreign regulator should be aware of cultural differences, the ALG 2024 Corporate Crime and Regulation summit at Croke Park in Dublin has heard.

The summit (16 October) heard that building relationships with foreign regulators was an important matter for corporate lawyers.

Increased collaboration between law enforcement and regulatory authorities across the world, coupled with increasing globalisation, has led to a growth in cross-border investigations, and Ireland’s open economy lends itself to this trend.

Joe Kelly and Mairead O'Brien of ALG discussed jurisdiction variations with Louise Engel (Ericsson) and Nicholas Queree of London’s Slaughter and May.

The lawyers said that learning how to navigate potential conflicts meant not causing a problem in one jurisdiction while solving a problem in another.

Concepts of legal privilege

Concepts of legal privilege may vary by jurisdiction, and the session examined protocols and best practice – including communications plans, and leveraging technology to streamline investigative processes.

While a request for information (RFI) from a regulator might be dealt with at pace, a dawn raid magnified difficulties, the session heard.

Individuals may be put under extreme pressure to provide information immediately but be unable to reach relevant headquarters, due to time differences.

While panic was a natural response in these situations, good forward planning would enable a fast response, the ALG lawyers said.

Corporate lawyers must be aware of minimum requirements in the relevant jurisdiction in terms of providing information, Joe Kelly of ALG said.

As well as protecting the corporate body, individuals will need to be protected as well.

This might mean that the individual employee had separate legal counsel, the session heard.

What is common practice in Ireland may not be acceptable in other jurisdictions, due to cultural variations.

Legal dynamics

“Cultural dynamics are just as important in the context of resolving a multi-jurisdictional investigation as legal dynamics,” said Nicholas Queree.

There may be cultural expectation gaps in regulators and a greater inclination to take political and other social issues into account when making a regulatory decision in other parts of the world.

Regulators in other jurisdictions may also have “variable commercial expectations” about appropriate penalties.

This underlined the important of instructing local counsel, who were familiar with the political dynamics, the session heard.