COMMENTARY 27 NOVEMBER 2019

The investigator’s role in the ever-evolving disputes landscape

Joana Rego

Disputes today are more international and more diabolic. This is an era where a US$50 billion award is not only conceivable, it’s history. With stakes that high, every possible advantage has to be on the table.

The investigative industry has been supporting litigators for 40 years. During that time it has evolved and, along with it, its tools and resources have too.

Litigation has transformed from a sunk cost into a cash generating business. Look no further than the surge of third-party funding. Global dispute centres are awash in funders – banks, hedge funds, intrepid individuals – seeking opportunities to invest. With the freedom to cherry pick lower-risk claims, some funders have claimed success rates as high as 80-90%.

Never mind that such statistics cannot be replicated in complex disputes, consultants love a gold rush. The advent of the litigation business has created a carnival atmosphere complete with snake oil salesmen, sideshows and theatrics. Ten years ago a few well known annual fraud conferences attracted hundreds of people. Now there are dozens of conferences and workshops on fraud, asset recovery and enforcement around the world attended by thousands.

To an outsider this can be bewildering. The term ‘Business Intelligence’ itself is a Rorschach test. LinkedIn’s inelegant ‘Security and Investigations’ category is no more illuminating, two services which have virtually nothing in common. We invent terms like ‘Dispute Consulting’ but without an agreed lexicon they are co-opted by accountants and document processors. In many ways it is a youthful sector without a clear identity.

For an investigative community that has grown up on the dependable – and relatively low risk – staples of pre-transactional research and Know-Your-Customer due diligence fed by the immense regulatory industry of the United States, litigation is unforgiving. The tendency is to over-promise, deliver long watered-down reports or to focus too heavily on data which has little or no probative value in a court room or before a tribunal.

Unfortunately, this has fuelled scepticism among many lawyers repeatedly disappointed by investigators’ results. Combined with lingering stereotypes of men in fedoras lurking under lamp posts or hackers with no respect for the law these experiences undermine the perceived value of investigators in legal proceedings.
To cut through the noise and misperception is to say what most in our industry do not want to say: gathering evidence is manifestly more difficult than gathering information. In litigation, knowing the answer is not half as important as being able to prove it. Ignore the casual claims of hundreds of millions of pounds in recovered assets. Enforcement is hard.

To be a specialist in litigation support is to resist the temptation to have all the answers or to claim exclusive access to a secret weapon. It is to fully understand the nature of the problem and, most importantly, what constitutes value from the perspective of a litigator.

Asset tracing, forensic accounting, computer forensics; these are tools and useful ones, but they are not solutions. Solutions combine all of these forms of investigation with legal process, public relations strategies, regulatory leverage and politics. Specialists know this.

To be a specialist is also to know the limits of traditional investigative methods and work to find opportunities to use legal mechanisms to flush out confidential information. A well-directed 28 USC Section 1782 application can deliver an extraordinary boon of legally obtained banking evidence. But a successful application starts with a keen eye and a well spotted opportunity.

Creativity is also essential. The world’s best litigators routinely test limits and invent tactics. Knowing the law in any one country is as important as knowing how to orchestrate legal action in half a dozen countries as a single unified plan. Investigators do not need to have studied law to provide support to litigators, but they do need to understand this jurisdictional arbitrage and be able to partner in tactics and strategy development.

Finally to be a specialist is to accept risk. We cannot outsource essential aspects of our work. The standard model in which a client instruction is farmed out to a so-called “confidential source network” (spoiler: these networks are mostly subcontractors and shared among the industry) is ill suited for evidence gathering. Most of these resources are not accustomed to investigative tasks which require attention to admissibility.

This hands-on approach makes us visible. We receive threatening letters and submit ourselves to cross examination. We commit to playing an essential role in the success or failure of our clients’ claims. Their filing deadlines are our deadlines. We live and breathe our cases in the field and at 4am alike.

And so the investigators role in litigation support is more than that of service provider. We are essentially in the trenches, embedded, a trusted strategic support available at all times and intimately familiar with the smallest of facts of each case. If you spend two years on a matter, a legal victory will feel like yours. A loss will too.

This can spark a sort of obsession with the work. At the same time it warrants a cautionary note to would-be candidates: there are easier ways to make a living.