When the New Zealand Serious Fraud Office (SFO) summons you to attend an interview regarding an investigation of corporate misconduct, you may be surprised to learn SFO has the power to prevent your preferred counsel from accompanying you. In fact, many international regulatory bodies can exclude an attorney from the client’s compulsory interview. If a client is caught unaware, this power can be devastating to successful resolution of the proceeding.
SFO Prevents Choice of Counsel
On October 25, 2016, John James Loughlin was summoned to appear for an interview by SFO. The interview was “compulsory” and one “where the interviewee cannot refuse to answer a question on the grounds of self-incrimination.” While he was entitled to counsel, SFO informed Mr. Loughlin his current attorney was excluded. Mr. Loughlin was a director and chairman of the Board of a giant retail company. His attorney, Mr. Corlett, also represented several other members of the Board. SFO, drawing on its implied statutory power, denied Mr. Corlett admission to the interview on the grounds that Mr. Corlett attended interviews of his other clients who were also witnesses. Therefore, he was privy to information he could inadvertently disclose to Mr. Loughlin. SFO feared this disclosure could color Mr. Loughlin’s testimony at the interview.
Choice of Counsel Allowed – This Time
In an August 2017 decision, Loughlin v. The Director of the Serious Fraud Office, the High Court of New Zealand (a court of general jurisdiction but not New Zealand’s highest court) overruled SFO’s prohibition. Mr. Corlett was permitted to attend the interview because the judge found no particular facts suggesting the attorney’s presence would prejudice the investigation.
The takeaway, however, is that SFO may compel a witness to answer questions without the advice of a trusted representative. Precedent discussed in Loughlin upheld the exclusion of the attorney. SFO’s decision to exclude an attorney is limited only by a reasonability standard. In certain circumstances, its inherent authority to challenge counsel is seemingly unquestioned. Moreover, one of the reasons SFO might seek to exclude counsel is to prevent the coordination of defenses among witnesses—even though that is precisely the reason witnesses might want to use the same counsel. Thus, SFO’s power to limit coordination is as daunting as its ability to exclude chosen counsel from a potentially case-altering, and life-altering, event.
Global Perspective Needed
In the United States, constitutional, statutory, and ethical protections benefit the client rather than the tribunal. The Sixth Amendment and US Supreme Court jurisprudence protect choice of legal representation—barring a non-waivable conflict of interest in multiple-representation criminal cases as in Wheat v. US.
It is hazardous to assume similar protections will exist in international jurisdictions. New Zealand, Ireland, and Australia, for example, all follow a similar test: strongly presuming freedom of choice of legal representation, but limited by the needs of the tribunal. Knowledgeable counsel, with global connections, can prevent the predicament of standing before government investigators without one’s counsel of choice.