The importance of regulatory bodies
Co-authored by Lubna Fahoum and Jake Burke.
This blog is the latest in a series of articles discussing the rising need for investigations in sport and sets out the key considerations required when dealing with a regulatory body throughout an investigation.
When does the regulator become involved?
It may be the case that the sports club discovers wrongdoing before a regulator does and will need to conduct an internal investigation. This, however, does not mean that a regulator should not be informed. In fact, as discussed in our previous blog post in this series, an immediate response to allegations of wrongdoing is essential. Regulations vary across the sports sector, but there are several examples of obligations for sports clubs and associations to immediately self-report any issues identified, even before any internal investigation has begun. For example, the Football Association (the FA) requires immediate notification upon discovery of any potential or actual breach of its Safeguarding Children Regulations. In our experience, immediate or prompt self-reporting is also a crucial point of mitigation when facing enforcement actions and will be taken into account by sports regulators in their decision-making processes.
Sports clubs should not forget that while their industry regulator may be investigating any allegations, so too may other authorities depending on the facts of the case. It could be the case that the allegations of wrongdoing require the attention of the police, or other regulatory bodies which handle cases across all industries. In this case, clubs should be conscious of the potential for information sharing between authorities and managing the expectations of multiple interested authorities.
Regulator powers
The police, and other bodies who have the power to regulate any wrongdoing, have a vast array of statutory powers. Penalties can be far reaching including, but not limited to fines and imposition of club monitoring.
Regulators within the sports industry itself have even further-ranging powers, which are often entirely discretionary. For example, the FA has the power to impose a vast range of penalties for breaches of most of its regulations, from formal warnings, to fines, to the docking of points and any other penalty as they may deem necessary. We will go into greater detail on this in the next blog post of this series.
Regulators also have the power to come in and perform their own investigation at the club, at which point they may request to be provided with any documents and work already conducted. This is where it becomes very important to protect privileged documents such as reports to the board, interview notes and other materials from being produced to a regulator. The protection of privilege is a key reason to engage legal counsel from the beginning of an internal investigation.
Communicating effectively
It is essential to maintain good communication with any regulator while under scrutiny. Regulators (and the public) will place trust in an independent investigation being performed by external lawyers, which by its very existence can be a powerful tool in presenting a proper and serious response to any crisis.
In our experience, following a sufficiently independent, objective and thorough internal investigation, regulators respond positively to a formal findings letter or report and will make their decision on penalties based on this information. This avoids the further harm that could be caused by an external investigation conducted by a regulator, which can often result in a more challenging relationship with the regulator as you manage their information requests, in addition to a lack of control of the handling of the situation, as well as the additional risk of bad press should the external investigation become public.
To read the previous post in this series, please click here.
The author of this article would like to thank Lubna Fahoum, Norton Rose Fulbright trainee, and Jake Burke, Norton Rose Fulbright solicitor apprentice, for their contributions to this blog post and series.