Investigative Research: A Powerful Tool for Litigators
Introduction
As In-House Counsel, you provide a wide range of services to your clients. This may include risk management, offering legal advice on employee-related issues, and liaising with external counsel. We want to share with you a technique that you can use to improve your overall outcomes. In this article we will discuss investigative research and share how you can use it to your advantage.
What is Investigative Research?
Investigative research (or more commonly known as open source intelligence (OSINT)) is the gathering and analyzing of publicly available information. When applied correctly, OSINT can assist with risk management, help to manage investigations, and contribute to improved litigation outcomes.
Today, OSINT research mostly involves the gathering of information from online sources. Social media platforms, e-commerce websites, public blockchains, sanctions lists, and podcasts are all great examples of open-source resources. Public registries are another valuable tool as they provide information related to land ownership, financial status, and legal proceedings.
On occasion, information from these sources may be considered private; however, the general rule of thumb is if it is in the public domain or legally deemed public information, then it’s fair game. With that said, we always recommend you consider the legal context of your specific situation.
Applications of Investigative Research
Investigative research helps to assess and manage risk, conduct internal investigations, and support litigation efforts.
Risk Management
The objective of investigative research in this context is to collect background information related to a counterparty. A counterparty could be a customer, client, potential acquisition, sales channel partner, or even a vendor. Conducting due diligence on counterparties is a very popular application of OSINT.
With respect to acquisitions, OSINT can help to determine if there are any “red flags” related to the parties involved. This information is ultimately factored into the decision of whether to proceed with the transaction. An important area to focus on includes determining if any stakeholders of the company have a history of fraudulent behaviour, or have disregarded regulations.
Investigative research can also be leveraged as a risk reduction tool for suppliers, who want to determine if a vendor poses a risk to them. In this case, you want to look for indications of fraud, diversion of materials, and intellectual property infringement. Your research can also help to determine whether a vendor has been compliant, including whether they adhered to environmental, social, and corporate governance requirements in the past.
Regardless of its specific application, investigative research is a useful resource as it allows you to identify risks related to customers, sales channel partners, and vendors.
Litigation Support
When it comes to litigation support, the application of open source intelligence will depend on the type of litigation involved. Services range from simple asset and background investigations to more complex investigations that arise from things like the illegal use of trademarks, false or misleading claims, and cyber-harassment.
OSINT is useful in this context because you can apply OSINT to current litigation issues, such as cryptocurrency transactions, or to historical matters such as trying to determine what a location was used for in the past.
Employee Investigations
Internal investigative functions also use OSINT. Many companies use it to help determine whether a potential candidate is a good fit, or if they may bring any potential risks to the company.
OSINT can assist when an employee alleges harassment by another employee on social media, or if an employee is believed to be involved in fraudulent activity within the workplace. In this last example, OSINT can help assess the financial status of the employee. It can also help identify any connections between external vendors and employees, which could indicate some sort of kick-back scheme taking place.
Organizations also use OSINT to guide the management team when it comes to critical decisions. For example, there may be times where an organization has a duty to assess whether an employee might act in a violent manner that could harm other employees. OSINT can help provide important context.
Maximizing Investigative Research
By keeping the following recommendations in mind, you will be in a good position to leverage investigative research
1. Define your objective.
Doing this first will help you choose the best approach.
2. Consider how your investigative research fits in with the other aspects of your matter.
OSINT is a valuable tool, but it is not a replacement for other resources available to you. For example, a due diligence investigation may address some aspects of a person’s character or behaviour, but it is not a substitute for legal or financial due diligence. Similarly, in litigation, OSINT is often used to improve (not replace) evidence. Evidence may include: digital forensics, product purchases, document production, or examinations under oath. Be sure to consider how OSINT ties in with the bigger picture.
3. Consider the jurisdiction you are working within and what type of information is available.
Developed and developing nations have public record systems; however, not all are available online. Also, be sure to consider other relevant context such as cultural norms, local laws and observations, language skills, and geographic knowledge.
4. Determine what type of resources (internal or external) you will need for your research.
Financial institutions have well developed know-your-customer/client (“KYC”) processes and have well-staffed teams. While they may be optimized to address this type of risk, they may be less equipped to handle an employee investigation or determine whether a party is worth pursuing for litigation. If external counsel wants to use their own resources, it is important you ensure they have access to the necessary resources, and are appropriately trained. Lastly, in certain situations, there is an advantage to having an independent party collect information. This is especially true when it may be used as evidence in a legal proceeding.
5. Determine the plan and budget prior to commencing your research.
You cannot predict exactly what you will find at the beginning of an investigation or research project. However, you should be able to draft a basic plan that includes the expected outcome of the investigation, as well as the estimated total costs.
6. As much as possible, integrate investigative research into existing processes.
For example, if the research applies to litigation matter, the process needs to start with an interrogation of the party-information that was provided to you by the client. This may include contracts, vendor information, and financial statements.
7. Liaise with both internal and external counsel, and other key stakeholders.
You may want to call on ESG professionals, human resources, corporate security, and information security to assist you. This will help you ensure inquiries are properly conducted and comply with the legislation and/ or any governing contracts or policies.
Final Thoughts
OSINT is much more than knowing where to look for information. When properly executed, it allows you to provide valuable information to your clients. Contact us today to learn how we can help you maximize your investigative research skills.
Disclaimer: The content provided herein is for information purposes only and should not be construed as legal advice. Readers are advised to obtain legal advice as appropriate.