At the beginning of June 2019, a Dutch financial newspaper (Het Financieele Dagblad) reported that the Dutch Public Prosecution Service (DPPS) intends making more frequent use of fraud and corruption investigations conducted by lawyers of suspected companies (Het Financieele Dagblad: Justitie laat fraudeonderzoek vaker over aan advocaten van bedrijven zelf, 4 juni 2019). That gave rise to questions in the Dutch House of Representatives.
During parliamentary Question Time the same day, the Minister of Justice & Security, Ferdinand Grapperhaus, explained that the DPPS and the Fiscal Intelligence and Investigation Service (FIOD) were considering whether, and in what circumstances, there were benefits to be gained from cooperation by suspected companies in the investigation of fraud. The Minister noted that the approach had produced “very good results” in the United States (TK 2018-2019, nr. 88, item 4).
Representatives Van Nispen (Socialist Party) and Groothuizen (Democrats 66) subsequently submitted written questions (6 June 2019, no. 2019Z11430). The Minister answered their questions in a letter dated 6 September 2019 (Answer to Parliamentary Questions, ref. 2662527)
Value of own investigation
The Minister sees investigations by lawyers and (forensic) accountants for a company suspected of corruption as a means of tackling a complex criminal investigation in the most effective and efficient way possible. He does of course consider it important for the DPPS to always instruct the FIOD to scrutinise such investigations as regards their correctness, depth, and completeness. The DPPS should then verify the results of the FIOD’s investigation. The value of a fact-finding investigation by a suspect company’s lawyers and accountants depends on its “depth, completeness, and correctness”, and on the independence of the investigation as apparent from its design.
No objections to investigations by lawyers who have previously worked for the company concerned
The Minister confirmed that a lawyer who has already carried out other work for the company concerned can still carry out such a fact-finding investigation. In this respect, he noted that lawyers are obliged to comply with the Dutch Advocates Act (Advocatenwet) and the rules of professional conduct ensuing from it. The Minister pointed out that this means, among other things, that lawyers “must observe sufficient independence with respect to their client when carrying out the investigation”.
Other relevant disciplinary considerations are, for example, that a lawyer has a large degree of freedom to represent the interests of his/her client in the way he/she considers appropriate, although that freedom is limited, inter alia, by the rule that a lawyer may not take any action which causes unnecessary and inadmissible harm to the interests of third parties.
No training requirements or formal guidelines for lawyers who carry out an investigation
The Minister believes that it is up to the lawyer him/herself to decide whether to take a special course or training. Ultimately, what is “crucial” is whether the fact-finding investigation is of value to the criminal investigation.
Whether a fact-finding is thorough and comprehensive enough depends on the facts and circumstances of the particular case. For that reason, according to the Minister, it is not logical to prescribe formal guidelines with which the fact-finding investigation must comply.
Advantage of self-reporting and cooperation in fact-finding
The Minister notes that self-reporting and cooperation in fact-finding by companies, but also by natural persons, are taken into account by the DPPS when settling the criminal case.
The Netherlands – unlike the United States, for example – has no specific guidelines for determining how the DPPS will take self-reporting and cooperation into account when deciding on how to handle a criminal case. The Minister notes that the DPPS generally takes a positive view of the fact that the accused cooperates in criminal proceedings and will consider this when determining which sanction it requests during settlement procedures or in court. However, it is currently unclear for a company that is considering self-reporting and having its own fact-finding investigation carried out whether, and if so how, the DPPS will take this into account when deciding how to settle the case. If the DPPS concludes that cooperation in investigations by suspect companies is valuable and wishes to encourage companies to conduct their own fact-finding investigation, it would be a good thing for it to formulate a clear policy on this matter.