Four learnings investigators can take from the Disclosure Pilot Scheme

Phil Beckett, Managing Director and Head of Disputes and Investigations at Alvarez & Marsal in Europe and The Middle East discusses Four learnings investigators can take from the Disclosure Pilot Scheme.

The Disclosure Pilot Scheme (DPS) trial period was originally due to come to an end at the close of 2021 but has recently been extended for an additional year.

At a high level, The DPS allows litigators to agree upon one or more of five pilot models ranging from limited disclosure of known adverse documents to a wide search-based disclosure. Each model can benefit from various types of technological strategies to uncover the relevant data for a particular case.

Of course, questions still remain about whether the pilot will become a permanent enforcement, predominantly because multiple litigators have reported some significant concerns about the pilot to date. In fact, 70% of respondents to our DPS survey judged that the scheme was not fit for purpose, with almost all respondents (97%) expressing dissatisfaction with aspects of the pilot.

Despite some serious work on points for the pilot, investigators can apply some key strategies used by data experts in litigation under the DPS to investigations, improving their ability to use technology to get a clearer picture of potential wrongdoing, particularly when analysing unstructured data. In short, some of the same strategies using technology in litigation for disclosure purposes can also be applied to investigations for more effective and smarter examinations of information.

Here we look at four key learnings investigations can take from the DPS.

1. Include technology experts right from the start: Counter fraud teams can make the mistake of separating data and technology from the investigation, with technology experts often brought in long after initial assumptions are made, and work has begun. But by involving these key people from the beginning and making it core to the investigation, your processes will be smarter and more effective.

Rather than telling the digital experts what the team wants, the key here is to work as a combined team, with both groups learning from each other over time. The power of this partnership will be evident in the results.

2. Focus on the process as much as the technology: Sometimes, investigations are more about the process, rather than the technology. By their nature, investigations are ever growing and ever revealing. New information produces additional insights and new paths of evidence. The more documents you receive and the more people you speak to, the more you know about the case. Teams need to be conscious of the constant change happening as they use technology to build a case.

However, these ever-expanding insights can lead teams to focus too much on the new information and to neglect previously reviewed documents/information in light of the new insights/data. Details reviewed early in the process may now be more relevant, and therefore need to be re-evaluated. Additionally, no amount of technology applied will make up for missed evidence early in the case and improving and focusing on your information gathering processes will increase the chances for success. Many of the efficient and successful investigations have technology integrated across all areas of the investigation with technology specialists and investigators working closely together.

3. Go beyond the typical sources of information: When it comes to use of technology in organisations, there’s often a perception-versus-reality phenomenon that must be addressed. Most company leaders, particularly in information technology (IT), perceive that employees use technology homogeneously, that is, documents are uploaded or stored consistently, or that company data is transmitted according to company policy. The reality is documents may be sent via personal email accounts or stored on personal hard drives, especially during the recent move toward remote working environments as a result of the pandemic. Sometimes these sources of unstructured data are missed during investigations or in the pre-investigation planning.

Investigators must look to see how the data sets are actually being used — inside and outside the company — and catalogue all the technology systems involved accordingly. Data storage habits can vary widely, even within departments and organisational eco-systems. They can include such popular platforms as social media apps like WhatsApp or conference call platforms like MS Teams or Zoom. Interviewing people at many levels in the company can unveil these habits and sources of information, and, when accounted for, can be added to the pool of unstructured data to be analysed. Looking beyond the usual sources of information can uncover key data to support a case.

4. Use the right tech in the right ways: Applying the correct technology in the appropriate manner will empower teams to be more effective in their investigations. Email threading technology that highlights emails containing unique content can be used to drastically reduce the volume of email that an investigation team needs to consider. Similarly, near de-duplication technology, de-duplication applied on a sliding scale dependent upon your requirements, may be helpful in identifying versions of contracts or invoices.

Artificial intelligence (AI) is another tool to identify relevant evidence more efficiently. In litigation, the use of algorithms and AI, including continuous active learning (CAL), is now widely accepted by the courts as a tool to reduce the amount of manual document review time and to prioritise data sets for review. CAL can predict the relevance of a document, based on those manual review decisions previously applied in the case. Likely relevant documents are prioritised to the investigations team, reducing the time and cost in uncovering the relevant information. Aligning the right technology with the data source allows teams to better detect patterns in linked documents.

To conclude, the same processes and technology used for e-Disclosure under the DPS can also better inform investigators in many cases. That being said though, the key to getting this right is by bringing in tech experts early on. Counter fraud teams can often make the mistake of separating data and technology from the investigation, with technology experts often brought in long after initial assumptions are made, and work has begun. However, involving these key people from the beginning and making it core to the investigation, the whole process will be smarter and more effective. This means that, rather than telling the digital experts what the team wants, the key here is to work as a combined team, with both groups learning from each other over time. The power of this partnership will be evident in the results.

Remember, technology can be a fantastic tool for uncovering and gathering information, especially since so much intelligence and evidence is stored electronically. But at the end of the day, it’s about empowering the human investigator to be more effective.