The evolution of internal investigations in corporate compliance

In our experience, the most common issues linked to investigations include waiting too long to initiate the investigation, violations of employee rights, data privacy, failure to properly document all steps, conflicts between management and corporate interests (e.g. home searches of board members), and the lack of legal privilege in investigations conducted by in-house counsel or compliance departments. With this in mind, we have developed our approach to focus on preventing potential roadblocks and mitigating legal risks for the benefit of our clients.

We help businesses achieve their internal investigation goals, avoid reputational damage and maintain trust with local subsidiaries. Using legal-tech tools, we process large data sets to deliver accurate, well-documented conclusions.

Bulgaria

While the topic of internal investigations in Bulgaria gained attention with the recent adoption of the local Whistleblowing Act, most investigations fall outside of its scope, either because they are initiated by the parent company or arise from reports that do not meet the Act's notably formalistic requirements. If the Whistleblowing Act is in fact applicable, investigations become subject to strict procedural rules, timeframes and obligations, making the involvement of experienced local specialists even more imperative.

In any event, the formalistic approach of Bulgarian courts (if any legal non-compliance is identified) necessitates a precise and well-planned execution of the investigation, including in the gathering of evidence. Assessing the potential liability of local management and employees further requires a case-by-case examination involving specialists in various legal fields. Given this inherent interdisciplinarity, we deploy a dedicated team of specialists who guide clients through all relevant legal aspects of the investigation.

Czech Republic

Internal investigations have become increasingly important in the Czech Republic since the introduction of corporate criminal liability on 1 January 2012. This significance grew further in December 2016 with an amendment allowing corporations to exonerate themselves from liability by demonstrating the existence of a robust compliance programme with adequate control and auditing mechanisms.

Since then, we have seen increasing demand for internal investigations on the market. The most common areas are fraud, corruption, bribery and other criminal offences, as well as harassment, discrimination and misconduct, data privacy and security, and breaches of antitrust rules. This trend is also fuelled by the increasing number of criminal cases initiated against corporations by criminal justice authorities each year. For example, in 2013, only 48 cases were initiated, whereas by 2023, the number had risen to 274 criminal prosecutions, with a total of 1,041 preliminary police investigations launched that year.

authors: Rudolf Bicek, Hristo Hadzhiiliev, Ema Stoyanova, Ventsislav Tomov