EWJ August 62 2025 web - Journal - Page 14
defensible document destruction procedures would
also be useful in limiting the amount of information
and documentation which might otherwise be subject
to a raid.
The SFO’s dawn raid powers
Under Section 2 of the Criminal Justice Act 1987
(CJA), the SFO can compel an individual or organisation to provide it with information or documents that
it believes are relevant to its investigation. The SFO
typically relies on section 2(4) CJA. This sets out that
an entry and search warrant may be issued if there are
reasonable grounds for believing that: (i) a person has
failed to comply with an obligation to produce documents; (ii) it is not practicable to serve notice ordering
the provision of documents; or (iii) service of such a
notice may seriously prejudice an investigation.
What should you do immediately when a dawn raid
begins?
Confirming authority and investigative powers
The scope of the agency’s powers to investigate should
be checked at the outset of a dawn raid by requesting
a copy of the investigating team’s authorisation documents. As set out above, these are likely to include a
court-issued search warrant which will provide guidance on the scope of the search to be carried out and
any express limitations set down by the court. The
exact business address the investigative team have the
power to search will also be listed and should be double-checked, alongside any other practical details for
example regarding the time and date of the search
and the number of investigators authorised to attend
the premises. It would also be good practice to request
the identification documents for each member of the
investigating team and validate them by liaising with
the central office of the agency in question.
The FCA’s dawn raid powers
FCA investigators have a wide range of information
gathering tools available to them. Part 11 of the Financial Services and Markets Act 2000 (FSMA) grants
the FCA extensive investigative powers to support their
regulatory duties. Section 176 FSMA enables a police
constable (and others, including FCA staff) to enter
premises under judicial warrant in certain circumstances. This allows the police and FCA to search the
premises and take various steps, including taking possession of any documents which relate to the warrant.
It is therefore important that reception staff are
trained to request the authorisation documents and
identification papers of the search team on their arrival and to immediately provide copies of these to the
team handling the dawn raid internally.
The FCA has said that “the reasonableness of deploying a
particular statutory power depends on the circumstances of
each individual case”1. If the FCA suspects serious regulatory breaches and there are reasonable grounds to
believe on notice powers would not be complied with
or lead to the destruction of evidence, the FCA may
seek to use without notice search powers.
Can the investigators start their searches before
lawyers for the company arrive?
Yes, there is no obligation on the FCA or SFO to await
the arrival of your in-house or external legal team
before commencing a search of the premises.
How can a company prepare for dawn raid?
There are a number of pre-emptive steps an
organisation can take to prepare for the possibility of
a dawn raid.
That said, a senior member of the internal team handling the dawn raid (who is immediately available on
site) could meet with the investigators on their arrival
and guide them to an internal meeting room (out of
sight of other visitors) and politely ask the FCA / SFO
to await the arrival of the legal team (providing an
estimated arrival time) before proceeding with the
investigation.
Dawn raid policy and staff training
The essential starting point for an organisation should
be ensuring a comprehensive dawn raid policy is in
place and regularly updated. The policy should outline both the powers of key regulators and the consequences of not complying with those, as well as the
nitty-gritty details of the practical procedures to be followed in the event of a dawn raid.
Can (and should) you seek to delay the investigation
from starting?
No, if the investigators refuse to wait, the relevant
team members should be clearly briefed not to, in any
way, delay or obstruct the investigation from starting.
The legal team can be kept up to date on developments whilst they are in transit to the premises and
can be available to speak with the investigators on the
phone, if necessary. Ideally, the legal team would arrive at the premises before the search team start reviewing documentation, however, if that is not feasible,
the core team dealing with the dawn raid internally
could look to identify low risk documents or locations
for the investigation team to start reviewing.
Active efforts should be made to disseminate the policy throughout the organisation. Practically speaking,
it can also be useful to deliver tailored training to (and
prepare “ready reckoners” as quick reference guides
for) employees who are likely to be particularly involved in a raid, including receptionists, security, IT
staff, in-house legal, management and directors. This
is to ensure that those employees in particular understand what is specifically required of them in the event
of a raid. Organising a mock dawn raid can also be an
effective way of building a practical understanding of
how raids operate and testing response procedures.
Document audit and privilege review
An organisation may also wish to carry out a
document review to ensure that, where possible,
privileged documents are segregated from other
documents and clearly marked as “Privileged and
Confidential”. Advance consideration of objectively
EXPERT WITNESS JOURNAL
Can (and should) you inform members of staff
about the investigation?
When considering whether to inform members of staff
about the investigation, it is advisable to first check
with the FCA or SFO (as applicable) whether doing so
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