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The company as prosecutor

Can evidence from an internal investigation be used in court?

Internal investigations are an element of compliance management systems. Internal investigations are conducted when irregular­ities in the operation of the company are discovered, including actions by persons associated with the company in violation of applicable regulations and procedures, such as disclosure of trade secrets, corruption, or mobbing.

The main purpose of an internal investigation is to determine whether irregularities have actually occurred, and if so, who committed them, when, why and how. In order to make these findings, which will subsequently be used to justify remedial measures, including disciplinary or judicial action, evidence must be gathered.

Therefore an internal investigation is intended not only to explain what happened, but also to gather evidence for the purposes of potential legal action. This could mean employment litigation if an employee disputes a disciplinary termination, civil proceedings if the company has suffered a loss, adminis­trative proceedings if for example someone inside the company has made unauthorised use of confidential information, or penal proceedings if irregularities also constitute a criminal offence.

The evidence gathered in internal investiga­tions typically includes documents, digital data, computer printouts, objects, video monitoring, and reports from testimony by witnesses or persons suspected of improprie­ties. Sometimes evidence is taken from unannounced inspections—“dawn raids”—when offices are searched and computer data are secured.

When an internal investigation is launched, the company, the employer, or the special team appointed to examine the situation become investigators. However, there are no specific regulations governing the procedure to be followed or how evidence is gathered, as there would be in the case of proceedings before public authorities where compliance with the rules is necessary for the evidence to be admissible.

In this context, the question arises whether evidence gathered during an internal investigation can later be used in civil, admin­istrative or criminal proceedings. Although the regulations in force in Poland do not directly address this issue, certain general conclusions can be drawn.

Evidence depends on type of proceeding

In civil proceedings, there is no doubt that private evidence, which would include evi­dence gathered in an internal investigation, can be admitted and used. In civil proceed­ings, it is the task of the parties to conduct the dispute, including the presentation of evidence. The court is only an observer of the adversarial contest. Nonetheless, it is ulti­mately up to the court to rule on admission of evidence and to decide on its credibility.

The Civil Procedure Code indicates specific forms of evidence that can be used to prove factual allegations, but it is not a fixed cata­logue. This means that the parties can also submit other forms of evidence to the court which are not mentioned in the code but are made possible by advances in technology. Nonetheless, when seeking evidence in an internal investigation the company should be careful not to violate the law. The Civil Pro­cedure Code does not expressly prohibit the use of illegally obtained evidence, but the practice of the courts can vary, as demon­strated for example by rulings excluding evidence from recordings of conversations when one party did not know that the con­versation was being recorded. Moreover, evidence can always be excluded if it was obtained in a manner violating specific prohi­bitions or evidentiary privileges. An example might be the transcript from interrogation of a witness who had a right to refuse to testify or to present a document because it could be self-incriminating.

In administrative proceedings, anything can be evidence if it helps clarify the matter and is not contrary to law. Again, there is a broad range of evidentiary means available to the non-institutional party (generally a private party). However, the Administrative Proce­dure Code expressly excludes evidence that was unlawfully obtained, but without speci­fying particular regulations.

The strictest provisions on admissible evidence are found in the Criminal Procedure Code. The authorities conducting the criminal proceeding as well as the parties are permitted to seek introduction of evidence. The cata­logue of permissible evidence is expressly defined, although non-institutional parties may seek to introduce other forms of evidence. Nonetheless, the manner in which the evidence referred to in the code is taken is strictly defined. For example, testimony of witnesses may be taken only by the prosecu­torial authority, and the substance of the testi­mony must be contained in the minutes prepared by the authority and may not be replaced by notes. Moreover, at the present time private documents created for the pur­pose of a criminal proceeding are not relevant as evidence. This means that minutes from testimony by a witness as part of an internal investigation may be deemed inadmissible as evidence in a criminal proceeding. In order to use the knowledge obtained during an internal investigation, it is necessary to request that the witness be interrogated, indicating the facts to which the witness should testify.

Criminal procedure amendment

But the situation with respect to evidence in criminal proceedings will change fundamen­tally upon entry into force of reforms in Poland’s criminal procedure in July 2015. The changes will give parties to criminal proceed­ings, such as the injured party and the suspect, greater possibilities, or even require them to participate actively in gathering evidence and presenting evidence to the court. “Private evidence” will be expressly per­mitted, including evidence created or gathered for purposes of the criminal proceeding, as well as privately prepared expert opinions.

The existing rules will continue to impose certain basic limitations on the scope of evidence-gathering, however. Certain evidence will continue to be expressly inad­missible, such as testimony by the accused which was provided at a time when he or she was regarded only as a witness.

It is clear that evidence gathered during inter­nal investigations will gain in importance in criminal proceedings as a result of the amend­ment. Indeed, presenting such evidence will become practically a necessity to properly secure the interests of the company as an injured party or as a party that could poten­tially be liable under the Act on Responsibility of Collective Entities for Punishable Offences, if an offence is committed by a person affiliated with the company.

Internal rules for evidence-gathering

The rules for admissibility of private evidence differ depending on the field of law. But it may be pointless to establish different rules for gathering evidence in internal investiga­tions depending on the nature of the impro­prieties and the potential legal implications, particularly since the same behaviour will often lead to consequences in several differ­ent sphere at the same time. To ensure the effectiveness of the evidence gathered during internal investigations, it would be more valu­able to establish certain basic rules for gather­ing evidence within the organisation.

First and foremost, evidence should be gathered in internal investigations in a manner that respects the fundamental rights of individuals, including the right to privacy and the confidentiality of communications, and also complies with applicable legal regulations.

In the context of interrogating witnesses in internal investigations, the company should bear in mind the general principle that a person has a right to remain silent if his or her statement could expose the person to consequences. As an employer, the company may request that employees provide informa­tion and clarifications, regardless of the degree of their possible involvement in improprieties, citing Art. 101 §2(4) of the Labour Code, which establishes a duty of loyalty to the workplace. Nonetheless, the record of explanations obtained in this manner may not be admissible as evidence if in the specific instance there is a prohibition against use of the evidence under the rule that no person can be required to testify against himself.

To ensure the effectiveness of evidence gathered during internal investigations, it is essential that the evidence be secured against any tampering or loss. This applies in particu­lar to data stored in digital form. It is essential to ensure that data seized in digital form remain unaltered until they are presented as evidence in court, and to demonstrate that the method of securing the evidence protects the data against any alteration. For this pur­pose it is often necessary to use the services of forensic experts. And if criminal proceed­ings are considered, the secured evidence will then have to be turned over to law enforce­ment authorities.

Aleksandra Stępniewska, Business Crime Practice, Wardyński & Partners