On 2 February 2024, the High Court delivered judgment in Commission for Communications Regulation v Eircom Limited, which is of significance in relation to the treatment of legally privileged documents seized in the context of regulatory investigations and 'authorised officer visits' (sometimes referred to as 'dawn raids').
Background
The Commission for Communications Regulation ("ComReg") conducted an authorised officer visit / 'dawn raid' at the premises of Eircom Limited (trading as 'eir') from 31 May to 2 June 2023 pursuant to its powers under Part 3 of the Communications Regulation Act 2002 (as amended) (the "Act"). During the course of the dawn raid, ComReg seized over 320,000 documents, some of which ComReg accepted would likely either be irrelevant to its investigation or may be subject to legal privilege.
In an effort to narrow the dataset to be reviewed in the course of its investigation and exclude any irrelevant and/or legally privileged documents, ComReg formulated a step plan that set out the steps it proposed to take to exclude any irrelevant and/or legally privileged documents from its investigation. ComReg made an application to the High Court under the Act to seek the Court's approval of the proposed step plan. The seized documents were retained in sealed evidence bags pending the Court's determination of ComReg's application.
Disputes over the treatment of legally privileged are common before the EU and Member State courts in the context of investigations by competition authorities and other regulators. In practice, such disputes are typically resolved by the court. However, some jurisdictions allow for the decision to be taken by an independent third party (either a different team/function within the regulator or a completely separate third party). The European Commission itself has specific protocols for dealing with such issues (endorsed in previous cases by the European Courts) as there are a number of European judgments that have noted that mere seizure of privileged material could constitute a breach of privilege.
The Step Plan
As part of its step plan, ComReg proposed that it would conduct electronic word searches on the seized data to seek to exclude any legally privileged and/or irrelevant material. eir submitted that it would be more appropriate for it, rather than ComReg to conduct the relevant searches in the first instance in order to preserve confidentiality over the legally privileged documents. As the documents seized comprised copies of electronic documents (with the original data remaining with eir), eir had an opportunity to review the dataset seized by ComReg and to apply its own searches, as a result of which it determined that there were approximately 7,000 legally privileged documents in the dataset relevant to ComReg's investigation.
The court, in delivering its judgment, considered whether the High Court had jurisdiction to approve a regulator's step plan, such as the one proposed by ComReg, under the Act. The Act provides that where there is any dispute as to the legal privilege status of a particular document seized and/or requested by the regulator, the High Court shall determine whether the documents are in fact legally privileged. The court held that it is "not obligated to individually review each document to make a determination" and that it has the power to approve a step plan, such as the one put forward by ComReg (which incorporates searches to exclude both legally privileged and irrelevant information).
Who Conducts the Searches?
Having determined that the court had jurisdiction to approve a step plan, the court then considered which was the more appropriate party to conduct the proposed searches. Central to this consideration was the fact that eir is entitled to its information remaining confidential.
The court held that the statutory requirement of the regulator to ensure that the confidentiality of eir's documents was maintained did not require ComReg to return the seized documents to eir in order for it to conduct the searches. The court found that the Act required ComReg to maintain eir's confidentiality while conducting the search, noting that this is not and cannot be 100% guaranteed in a practical sense. In finding that ComReg was entitled to conduct the electronic searches, the court referred to the policy reasons underpinning the "very serious powers" conferred on ComReg and the fact that the alternative construction (ie, that eir conduct the searches) would "undermine to a very significant degree the investigative powers of the regulator and so one of the purposes of the [legislation]".
The court considered the contents of the step plan and approved its formulation, subject to a number of minor modifications that were put forward by eir in its submissions.
Conclusion
There are over 13 regulators in Ireland with 'dawn raid' type powers, including the power to seize documents. Some examples include the Central Bank of Ireland, the Data Protection Commission, and the Competition and Consumer Protection Commission, to name a few. This decision is therefore significant for any entity faced with a regulatory investigation.
A key takeaway for businesses, and one that the court emphasised throughout its judgment, is the importance of cooperating and working proactively with regulators, particularly once an investigation has commenced. The court expressly noted that it would have expected the regulated entity (eir) to have engaged with the regulator to agree the scope of the searches to be conducted. The court further noted that the lack of engagement in this case resulted in the investigation stalling for a number of months.
This decision is also a timely reminder for companies to ensure that they adopt best practice when seeking to assert and maintain legal privilege over their documents.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
