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Published on 6 July 2012 by authority of the House of Commons London: The Stationery Office Limited

House of Commons

Home Affairs Committee

Private Investigators

Fourth Report of Session 2012–13

Volume II

Additional written evidence

Ordered by the House of Commons to be printed 2 July 2012

The Home Affairs Committee

The Home Affairs Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of the Home Office and its associated public bodies.

Current membership

Rt Hon Keith Vaz MP (Labour, Leicester East) (Chair) Nicola Blackwood MP (Conservative, Oxford West and Abingdon) James Clappison MP (Conservative, Hertsmere) Michael Ellis MP (Conservative, Northampton North) Lorraine Fullbrook MP (Conservative, South Ribble) Dr Julian Huppert MP (Liberal Democrat, Cambridge) Steve McCabe MP (Labour, Birmingham Selly Oak) Rt Hon Alun Michael MP (Labour & Co-operative, Cardiff South and Penarth) Bridget Phillipson MP (Labour, Houghton and Sunderland South) Mark Reckless MP (Conservative, Rochester and Strood) Mr David Winnick MP (Labour, Walsall North)

Powers

The Committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the Internet via www.parliament.uk.

Publication

The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the Internet at www.parliament.uk/homeaffairscom.

Committee staff

The current staff of the Committee are Tom Healey (Clerk), Richard Benwell (Second Clerk), Ruth Davis (Committee Specialist), Eleanor Scarnell (Inquiry Manager), Andy Boyd (Senior Committee Assistant), John Graddon (Committee Support Officer) and Alex Paterson (Select Committee Media Officer).

Contacts

All correspondence should be addressed to the Clerk of the Home Affairs Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 3276; the Committee’s email address is [email protected].

List of additional written evidence

1 G4S Ev w1

2 Threshold Security Ev w4

3 The Surveillance Group Ev w6; Ev w24

4 The Institute of Professional Investigators Ev w9

5 Security International Ev w12

6 Bisio Training Ev w15

7 Cerberus Investigations Limited Ev w16

8 Steve Bishop Ev w17

9 Bishop International Ev w17

10 The Association of Certified Fraud Examiners Ev w20

11 The Ravenstone Group Ev w22

12 GPW Ev w23

13 GMB Ev w25

14 Arlingtons Sharmas Solicitors Ev w26

15 Speechly Bircham Ev w26; Ev w28

16 Independent Police Complaints Commission Ev w29

17 Mr Bhadresh Gohil Ev w30

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Home Affairs Committee: Evidence Ev w1

Written evidence

Written evidence submitted by G4S [PI02]

Introduction

G4S welcomes the opportunity or respond to the Home Affairs Select Committee’s inquiry into the regulationof private investigators.

G4S is the world’s leading security solutions group, which specialises in outsourcing of business processesin sectors where security and safety risks are considered a strategic threat. G4S has operations in more than120 countries and more than 625,000 employees.

The Cotswold Group, which is owned by G4S and will be renamed G4S Investigation Services in April2012, is the largest provider of surveillance and investigative services to insurance clients within the UK, witha strong emphasis on personal injury fraud. It provides a range of surveillance and investigation services inproperty, motor and personal injury insurance claims, employers and public liability, employee screening,housing benefit fraud and corporate investigations. The business, which has been operating for over 20 yearsand currently employs over 350 investigators, works for 30 major UK insurer companies.

This inquiry is very timely and provides an important opportunity to fundamentally rethink of how theprivate investigation industry is delivered and regulated. We have been strongly supportive of a self-regulatoryframework for 20 years and believe the time is right for a new and more robust initiative.

We believe any regulation, however it is managed, needs to cover off the following key areas:

— Standards of behaviour for companies and individuals operating in the industry;

— Screening and vetting of personnel and sub-contractors to ensure disreputable individuals aredeterred from joining the industry;

— Training and accreditation of personnel, which needs to be sufficient to ensure their standardsof behaviour and performance are reasonable and easily assessable;

— Incident reporting and management are sufficient to allow investigation by independentorganisations, whether Government or industry appointed;

— Grievance procedures, to ensure those who have issues with individuals or providers have theability to pursue reasonable grievances; and

— Compliance and enforcement mechanisms to ensure the areas above are followed by thoseoperating within the industry.

We believe there are a number of a good models for the development of this framework:

— Industry self-regulation: This is the model being backed by the Foreign & CommonwealthOffice for the regulation of the private security companies operating in complex environments.In this model an industry led organisation, A|D|S’s Security in Complex Environments Group,provides the focus for industry self-regulation with FCO support and guidance. For the privateinvestigation industry the proposed Chartered Institute of Investigators or Association of BritishInvestigators might provide an obvious focal point for this model, with support from theHome Office.

— Statutory regulation: Encouraging the restructured Security Industry Authority (SIA), as theGovernment-backed organisation responsible for regulating the private security industry in theUK, to increase its scope to cover all companies involved in clearly agreed private investigationservices, and through them all individuals. As such the Government would be able to benefitfrom the SIA’s existing regulatory regime as well as an extensive compliance and enforcementstructure. However, the SIA is currently transitioning to a new structure and widening its scopeof responsibility would require primary legislation.

We believe that due to the structure of the industry any future regulatory and compliance framework needsto be focused on the individual, rather than companies. This focus would ensure undesirables have no abilityto operate anywhere within the market while ensuring the qualified have ease of movement between companies.

We believe regulation, in whatever form it takes, is essential to the future of the industry, those operatingwithin it and those who come into contact with it as customers or investigated. We also believe that forregulation to be credible, within and without the industry, it needs to have a Government-backed or independentpartner which has robust compliance and enforcement powers to ensure that those who do not abide byregulation are not able to operate. This will ensure that companies and individuals which bide by the rules areable to highlight the fact to existing and potential customers.

We also believe it is critical that any future regulatory or licensing framework has customer backing, as withthe UK security industry, so the framework creates a legitimate commercial advantage for those who undertakethe accreditation required. This accreditation process should not be so onerous it is impossible for Small andMedium Sized Enterprises (SMEs) or individuals to satisfy without significant investments of money, time orpeople but should be robust enough to properly deter the unethical or corrupt.

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Ev w2 Home Affairs Committee: Evidence

We have replied to the specific questions raised by the Committee where G4S’s experience is most relevant.

Market Summary

Issues

Fraud is a huge issue for all members of society, with insurance fraud estimated to be a £1.9 billion problemby the Insurance Fraud Bureau while the Department of Work & Pensions estimates illegitimate benefitpayments cost the taxpayer around £5.2 billion a year, almost 3% of the total welfare bill.

Range of providers

FSA regulations in 2005 placed an emphasis on insurers to investigate fraud and which lead to the settingup of the Insurance Fraud Bureau (IFB), which is paid for by Insurers to assist intelligence delivery. Thisdevelopment, along with insurers’ desire to focus on their core business, has led to the growing trend forinsurers to outsource claims process and handling to trusted businesses.

However, insurance work only covers a proportion of the potential market which can range from matrimonialinvestigation services to employee screening and company due diligence. Little of this is registered ormonitored by any authority, beyond a variety of different organisations, none of which uses the same criteriaas each other, such as: from the Association of British Investigators (ABI), which is a fee paying organisationwhere a short exam is required prior to joining; the Institute of Professional Investigators (IPI), which is alsoa fee paying organisation but with no exam required; to The Institute of Professional Investigators. Thereforethere now countless companies and individuals offering a range of services, loosely covered by the term“private investigation”.

Personnel issues

In our experience private investigators (PIs) come from a number of backgrounds:

— Former police officers;

— Former military personnel; and

— Anywhere else.

It is this last community which causes the issue: essentially someone can be a butcher today and a privateinvestigator tomorrow without any proper checks: and sadly a number of those will be looking to takeadvantage of vulnerable people, often in a state of distress and who are prepared to hand over large sums ofmoney to obtain information which they believe will provide them with the evidence they require for a releasefrom uncertainty.

We believe the industry is currently in an “iceberg” stage with a small percentage of self regulated andreputable businesses providing public assurance to a large number of others, both companies and individuals,who are operating without any proper regulation: this introduces the significant risk of people entering theindustry for the wrong reasons and with few safeguards to stop them from doing so. Essentially this makes thePI industry very similar to that of the security industry prior to the introduction of the Private Security IndustryAct (PSIA) in July 2001, which made it a criminal offence to work in the security industry without an SIAlicence or contract with a company which does not employ licensed officers.

There is currently no statutory or industry-led procedures to ensure that only those with the right skills,standards of behaviour and ethical standards may operate individually or set up companies offering the typesof services identified above.

Lack of integrity amongst some customers

The other key issue is driven by customers, from large corporate to private individuals, who requestinformation which is not readily or legally available but for which they are prepared to pay large sums ofmoney, often in cash. This has created widespread bad practice amongst those PIs, whether corporate orindividual, for whom basic business ethics are anathema. The issues raised by this behaviour have becomeclear over the last few months but does not need to be revisited in this response.

Private investigators are often seen as the “go to” people if a person or organisation wants information whichis not in the public domain, including:

— bank account details;

— telephone history;

— banking or tax information;

— previous convictions;

— medical history (incl doctors’ records); and

— covert cameras.

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Clearly these are offences under the law but yet are provided on a daily basis by unscrupulous individualswho perceive it as a way to make money: indeed, some investigators still advertise these as services or are atleast willing to partake in them without too much persuasion.

It is also estimated by the ABI that 90% of PIs turnovers less than £50,000 in revenue each year which, ifthis market data is correct, suggests the majority operate in the “black” economy. Irrespective of regulationand licensing this issue will likely continue exist, however they will make those engaged in these practicesthink twice before they do so.

Why Regulation not already Introduced

G4S believes the previous round of regulation and licensing discussions ran out of steam for a numberof reasons:

— Funding—there was a lack of clarity about who would pay for the regulatory body and whethercompanies or individuals would be charged. There was also confusion about which companieswould have to pay and which wouldn’t: so investigations specialist were expected to pay butlawyers and loss adjusters, who might be investigating the same cases, would have hiddenbehind their professional qualifications and not had to pay anything.

— Lack of leadership of those leading the discussions, which meant those discussion they lackeddirection.

— Lack of proper interaction between Government and industry so the industry’s leadingcompanies were not consulted on what would or would not look achievable or rational.

— Lack of understanding of grass roots investigation activities which meant there was littledetailed discussion of the specific issues or the nuances amongst those leading the consultation.

Response on the Case for Regulation

We believe no effective case has, as yet, been made for regulation and so earlier attempts at itsimplementation have been at best “half hearted”. We have been told by clients that our model of fullyemploying our investigators, using robust screening and vetting procedures, sets us apart in the marketplace:this is obviously positive for our business but cannot be healthy for the wider industry in terms of perceptionor performance.

We believe regulation, in whatever form it takes, is essential to the future of the industry, those operatingwithin it and those who come into contact with it as customers or investigated. We also believe that forregulation to be credible, within and without the industry, it needs to have a Government-backed or independentpartner which has robust compliance and enforcement powers to ensure that those who do not abide byregulation are not able to operate. This will ensure that companies which bide by the rules are able to highlightthe fact to existing and potential customers, but that those who do not are disadvantaged.

Response on compulsory licensing

It is important licensing takes place as part of regulation and we believe that it should be delivered on anindividual basis to deter the disreputable from joining the industry.

We believe it will be up to the chosen regulatory body to determine the fees applicable to licensing and thetraining required to establish competency criteria. However, the training and associated licensing costs shouldnot be such that they deter new joiners to the industry or prove financially insurmountable for those with anexisting workforce which needs to be registered.

On the training issue we believe there needs to be a Government/industry approved training programmewhich new joiners to the industry would have to undergo. This training should be a mix of theory and practicalbased training and should be long enough to provide stakeholders with comfort that participants have reacheda minimum level of performance. This training should conclude with robust testing before accreditation orlicensing is approved.

We believe using a “grandfathering” approach for those individuals with a proven track record could be auseful way to counter the latter issue—essentially allowing those with more than a certain time served in theprofession to take an exam or practical test, rather than carry out specific training, to achieve their accreditation.

The likely cost of regulation

We believe the cost of regulation, licensing and any associated accreditation and training has got to be inline with the current economic conditions. If costing is prohibitive then only the larger companies, who willhave already invested significantly in their systems and procedures, will bother to pay. It will also ensure thatthe SME community will be unlikely to be able to pay for of licensing, but that the less reputable companieswill not bother.

January 2012



Written evidence submitted by Threshold Security [PI04]

Executive Summary

There is clearly a perceived threat to personal data, from private investigators, in the minds of the generalpopulace. Recent revelations, in particular those at the Levenson enquiry have highlighted the fact that thegeneral perception has an element of truth about it. The ICO and SOCA, either publically or in confidentialreports, are convinced there is a threat to the public if private investigators remain unlicensed.

The SIA, or its successor in title, stands ready to licence. There is sufficient capability in the training andqualifications sector to enable this to be undertaken. The sooner this takes place the better in my view.

Richard J Newman B.A. OpenPast President of The Association of British InvestigatorsFellow of The Institute of Professional InvestigatorsMember International Professional Security AssociationAffiliate Institute for LearningA.B.I. Investigator of the Year 2008

NB The views expressed in this submission are those of the author and do not, or may not, represent theposition of any association or body of which he is a member, or has held a position of authority within.

Introduction

I should preface this submission with the following comment. There is a whole world of difference betweenan ethical “private investigator” and someone who obtains information from anywhere, for anyone, at a price.The former are there to assist their client to legally source information. The latter will source information howand where they can, often obtaining it illegally if all else fails. So if we can abandon the notion that all privateinvestigators break the law to obtain information that would be a good start. Those others are nothing morethan data thieves and should feel the full force of the various laws that can be used against them.

Potential for Harm

In May 2007 Lord Falconer said in relation to Data Protection offences that “Following advice from theInformation Commissioner, the government is looking for the first opportunity to legislate to allow for custodialsentences, because, put simply at the moment the fines that are currently applied are not enough of adisincentive. The public are entitled to legitimate protection and privacy. At the moment the balance is wrong.The public are not getting the protection they need”.1

Nearly five years later the public are still not getting the protection they need. I said, in 2007, to RichardThomas (then Information Commissioner) and Lord Falconer that if the Security Industry Authority licensedprofessional investigators anyone without a licence is a “bad guy” and the ICO, SOCA or any other governmentagency can target them.

Those of us who are then, properly licensed, professional investigators can get on with the good work weundertake in assisting the insurance and credit industries to investigate fraud and debt, to serve legal process,and in some cases to help protect vulnerable persons from abuse and violence.

Many surveys and enquiries have been undertaken by the Information Commissioner’s Office, The SeriousOrganised Crime Agency, Her Majesty’s Inspector of Constabulary and the Independent Police ComplaintsCommission into relationships between data controllers and investigators.

The Information Commissioner’s Office published “What Price Privacy” in May 2006. The document titlecontinuing as “The unlawful trade in confidential personal information”2 which highlighted the illegal natureof the practices involved. During the period 18 November 2002 to 12 January 2006 the ICO secured 23convictions and of those few, if any, were of a private investigator.

The SOCA Strategic Threat Assessment entitled “The threat to UK law enforcement from corruption” waspublished May 2010. It provides a clear description of the threats in order of their relative severity. It does notcontain the full details of the intelligence supporting the findings, nor does it fully describe the methodologiesand vulnerabilities exploited by corruption. (This sensitive information included in the full CONFIDENTIAL1 Lord Falconer Speaking at the “Media Law 07 Conference” on 17 May 2007.2 What price privacy? The unlawful trade in confidential personal information. Presented by the Information Commissioner to

Parliament pursuant to Section 52(2) of the Data Protection Act 1998 and Ordered by the House of Commons to be printed 10May 2006 Crown Copyright



assessment is only fully available to Chief Officers and Anti-Corruption Units) What is provided in thepublically available Executive Summary is a list of what SOCA refers to as “Corrupters”, amongst these arePrivate Investigators.

“Private Investigators

Whether seeking corrupt access to information to support investigations, or working to directly assistcriminals pis are an increasing threat. They may include people with law enforcement or similarbackgrounds, with knowledge of investigative tactics, and methodologies.”3

So, in the SOCA report there is a short paragraph relating to private investigators but no, publically available,hard evidence provided that they are any more of a risk than any other group of individuals in the public sector.

HMIC in its report “Without fear or favour: A review of police relationships” (Dec 2011) primarilydocuments police relationships with the media but “has also considered inappropriate relationships and otherabuses of power in police relationships with private investigators”.4 They repeat the view held, and putforward, in the SOCA Strategic Threat Assessment that “the most significant threat nationally is informationdisclosure to those involved in criminality, to friends and family, and to private investigators”.4

Once again there is no publically available information that what I would call a “private investigator” is inany way involved in the illegal traffic of information. The HMIC report continues by saying that “Studies intocorruption in policing over the last decade have established that it is difficult to assess its extent, although it isapparent that information disclosure is the most common type of corrupt activity. This can include obtaininginformation for personal purposes, passing information to friends, associates, leaks to the media, and deliberateleaks to criminals.”4 I note that private investigators are not included in the section on “Informationdisclosure” yet that surely is the one area where they would have the greatest need.

“The IPCC reports that complaints (substantiated and unsubstantiated) in relation to improper disclosure ofinformation have been made against every force in England and Wales in the financial year 2009–10, but theseamounted to only 2% (1,189) of complaints against police”.5 No information in relation to what, if any,information was obtained by any private investigator. “Further, data protection complaints in relation to policingand criminal records to the ICO in 2010–11 amounted to 5% of all complaints received by the ICO”.6 During2011 the ICO press releases do not refer to a single private investigator being prosecuted despite there being anumber of reports of criminal proceedings, against others, having taken place.

The IPCC, in its report dated August 2011, makes reference to just one instance of abuse by a privateinvestigator in 2007.

“Misuse of police databases to assist private investigator

In 2007, South Wales Police were alerted to the possibility that an employee had misused computersystems to assist a retired police officer who was now operating a business as a private investigator.An investigation was conducted by South Wales Police’s PSD and supervised by the IPCC. Theoperation identified links between a retired Detective Chief Superintendent who had established hisown business and a retired Detective Constable who had rejoined the force as an administrator in acivilian capacity.”7

Whilst recognising that there is a problem in relation to data disclosure from a variety of sources, includingthe police and other government departments, to several individuals who purport to be private investigators Iwould venture to suggest that the vast majority of professional private investigators would not be involved insuch a trade.

Then we must consider all those who whilst not admitting they are private investigators nonetheless, accessand obtain personal data. Often doing so often in an illegal manner. If investigators are licensed then these“other” persons can be targeted.

Failure to Regulate

The Security Industry Authority (SIA) would have licensed Private Investigators according to their minutesof a Board meeting held in July 2011. It is recorded that “The Chief Executive explained that The SIA wouldhave liked to address the regulation of pis earlier. The planned roll out for licensing Private Investigators wouldhave meant an offence date of 1 October 2011. However, the Home Office had halted work and funding onthis project in 2010 due to uncertainty as to the future of the SIA.”8

So that is one reason, other reasons for the failure have been a difficulty in establishing exactly what aninvestigator does, and therefore to whom the licence should be applied. Having achieved that definition there3 ACCAG/SOCA (May 2010) The threat to UK law enforcement from corruption Crown Copyright4 HMIC (December 2011) Without fear of favour: A review of police relationships Crown Copyright5 IPCC (2010) Police Complaints: Statistics for England Wales 2009–10. Available from www.ipcc.gov.uk6 ICO (2011) Information Commissioner’s Annual Report and Financial Statements 2010–11. Available from www.ico.uk7 Corruption in the Police Service in England and Wales Part 1 August 2011 published by the IPCC following a request by the

Home Secretary using powers under Section 11 (2) of the Police Reform Act 20028 Para 29 of minutes of the SIA Board Meeting dated 28 July 2011 available at http://www.sia.homeoffice.gov.uk/Documents/

board-minutes/2011/sia-board-110728.pdf



was, until myself, and other colleagues within the private investigation sector paid for it, no suitablequalification for licence purposes. There are now two awarding bodies with an SIA endorsed licence linkedqualification available for investigators to take. (I must declare a financial interest in the provision of theEducational Development International Level 3 Professional Investigators examination.)

Compulsory Licencing

There are estimated to be anywhere between 3,000 and 10,000 persons operating in the UK who could beconsidered as “Private Investigators”. There are within the present Associations, Institutes and other voluntaryinvestigative organisations approximately 1,000 of those investigators. Some are members of more than oneorganisation.

The vast majority of investigators have not become members of organised groups that advocate licensingand regulation. In that case the only option that would require ALL investigators to be licensed would becompulsory regulation.

If there is no appropriate competency criterion then any person could purport to be an investigator. Thiswould allow unqualified persons to operate and the public, thinking them competent because they hold a“licence”. In my view a competency criteria has been applied to all other sectors licensed by the SIA andinvestigators should not be an exception. A view shared by Baroness Ruth Henig current Chair of the SIA.There is now adequate provision for training and qualification available if, as is proposed by the SIA, theoffence date is set at an appropriate date. The time to qualify all those investigators needing to be licensed isestimated as 12 months, by the SIA.

Cost to Government and the Industry

I am not qualified to estimate the likely cost to Government but would premise that the SIA when makingtheir original plans to licence this sector were confident that the fee they set for a licence would be sufficientto cover their costs.

For my own part I have already paid to take the qualification at a minimal cost of £150.00. The proposedlicence fee of £220.00 for a three year licence is, in my view, not extortionate. Both are taxable expenses. Thiswould not, in my opinion, be a considerable impact on any SME in terms of time, bureaucracy and cost tobecome a licensed individual.

January 2012

Written evidence submitted by The Surveillance Group [PI05]

Executive Summary

The Surveillance Group is the largest provider of manned surveillance and surveillance training to both thecorporate and public sector within the UK.

The company is unique in that all of our operational staff are required to obtain a Level 4 BTEC Diplomain Tactical Covert Surveillance before being allowed to work for the company. The qualification includes amodule on the legal parameters that govern the use and application of surveillance within the UK. In additionall staff (including office based administrators) are CRB checked prior to employment.

The majority of the company’s work is governed by contracted service level agreements with its majorclients who are predominantly financial institutions, global brands and public sector departments. Theseagreements encompass the training provided to staff and the standard operating procedures that all staff workwithin.

The company’s work has led to countless high profile convictions and numerous landmark judgements incourt. Our work as both a training provider and major operational company means that we are seen as beingthe benchmark for surveillance standards within the UK.

The company has argued for better regulation within the industry for years and are keen to see a form oflicensing being introduced. Clearly a further consultation needs to be undertaken and differentiation madebetween “directed” and “intrusive” surveillance as part of this process.

The company feels that a blanket licensing process for any type of “private investigation” activity wouldpotentially be flawed due to the dilution of subject matter and training within such a broad subject. Thecompany is therefore strongly in favour of seeing investigative licensing being split into sub categories suchas surveillance, desk top enquiries/data research and physical investigation and interviewing.

There are existing qualifications in place to cover the areas mentioned in section 6. In the case of surveillancethis is the Level 3 BTEC “Certificate” or above that includes a minimum of 120hrs of learning (as opposed toa Level 3 BTEC “Award” that requires only 10 hours of learning). For all other investigative processes we feelthat the Level 7 BTEC Advanced Professional Certificate in Investigative Practice would provide the correct



level of essential training. Both awards are with Edexcel, with the latter currently being delivered throughmajor Legal Training Providers such as Bond Solon.

It is our belief that the SIA relied too heavily on generic security organisations for consultation regardingthe licensing of private investigators and as such the process seemed very much led by manned security ratherthan investigative organisations. We are also against the consultation being reliant on trade bodies such as theAssociation of British Investigators who in our opinion exist predominantly as a networking medium and donot represent the true voice or interests of the industry as a whole. We also feel that there is a danger of thelicensing being overseen solely by ex-police officers who only have experience of criminal investigations. TheRegulation of Investigatory Powers Act would be difficult to adapt to civil litigation and to that end any futureconsultation group needs to have a members drawn from a diverse range of specialist areas.

We would hope that as a result of the Select Committee’s work recommendations will be made to parliamentto licence the use of electronic tracking devices and their use subject to “RIPA” style intrusive surveillanceapplications. We also feel that sentencing needs to be introduced to police the illegal accessing of data fromdigital devices.

We think it is important to note that every aspect of the surveillance we undertake is linked to either civilor criminal litigation, where exaggeration, fraud or other types of crime are suspected. In all of these instancesthere is a good/legitimate case for the use of surveillance and we feel that the same basis should apply to anylicensing proposals. Proportionality should therefore be one of the major considerations when deciding whatoperating parameters should be covered under a licence.

We would also question whether the provision of licenses should be a local authority led process or whetherit should be controlled and administered via the MOJ or a body operating on its behalf. In our mind thelicensing of Investigators is of sufficient gravity to warrant it being structured around suitable training ratherthan a series of mandatory checks.

The Surveillance Group respectfully request the opportunity to submit our opinions orally to the Committee.

Background of The Surveillance Group Ltd

The Surveillance Group Ltd is by far the largest provider of manned surveillance and surveillance trainingin the UK. What makes the company unique in terms of its specialist position within the industry is the factthat all of its employees are trained to a Level 4 BTEC Professional Diploma in Tactical Covert Surveillance(course code PF437) The company’s operational staff are all ex Mod employees and our work has beenresponsible for high profile convictions in the fields of Brand Protection/Counterfeiting, and Anti SocialBehaviour including drug related issues and violent crime.

The company is also the largest provider of surveillance to the Insurance Industry who, in 2011 sufferedlosses through fraud of in excess of two billion pounds. We undertake surveillance on over 500 personal injuryclaimants a month all of whom are claiming in excess of £150,000. In 2011 just over 81% of all claimantswere filmed undertaking activities that directly contradicted major elements of their claim and 18% were filmedworking whilst receiving unemployment related benefits.

The company’s surveillance footage was responsible for the Landmark “Contempt” judgement in the caseof Walton v Kirk [2009] EWHC 703(QB) that changed the way fraudulent or exaggerated personal injuryclaimants could be prosecuted by Insurers. In 2011 our footage was responsible for the first ever personalinjury claimant and their family receiving custodial sentences for fraud in the case of Motor Insurers Bureauv Shikell [2011] EWHC 527 (QB.)

Our footage has thereafter been used in numerous other high profile fraud cases including instances wherethe DWP have benefited through using our evidence, having been passed a file by our insurance clients. Agood example would be the case of Edward Nield, Acromas Insurance Company Ltd v Graham JeffreyLoveday, Susan Loveday [2011] EWHC 2324 (Admin). We work regularly with many police forces and othergovernment law enforcement bodies and in December 2011 The City of London Police benefited fromsurveillance evidence acquired by us on behalf of Nike and Adidas in order to close down a major organisedcounterfeit ring and seize its assets under the Proceeds of Crime Act.

To our knowledge we are the only operational surveillance company to also have a dedicated SurveillanceTraining business and in 2010 we created the first Level 4 BTEC in this specialist subject that is accredited byEdexcel. We have subsequently trained government departments such as Ofsted and are an approved trainingprovider to the MOD’s Resettlement Service. Our level 4 BTEC includes modules on the various Acts thatgovern the use of surveillance in the UK and the various legal parameters that operatives have to work within.These include The Data Protection Act, Human Rights Act, Regulation of Investigatory Powers Act and theHome Office Covert Surveillance Code of Practice. As part of our contracts with major financial institutionssuch as RBSI & AXA we are required to have all staff CRB checked at the commencement of theiremployment.

We only undertake work for the corporate, financial services and public sector and are very much seen asbeing responsible for setting the bench mark in terms of integrity and training within our industry. The recentrevelations about the News of the World’s use of surveillance has been of great concern to our company since



we play a vital role in assisting corporate and public sector entities in the detection and prosecution of fraudand organised crime. We are very much in favour of licensing.

Recommendations

Hopefully the information provided in the sections above goes some way to prove that the systems andtraining that we have developed are effective and fit for purpose. These internal systems not only insure thatwe play a vital role in the detection and prosecution of crime but in so doing we do not contravene anindividual’s right to privacy or breach the Data Protection Act.

We are routinely subjected to major audits by many of our clients and we would willingly to submit ourselvesto a similar activity if the Committee wish to assess the systems that we have in place to insure that membersof the public are protected from the disproportionate/incorrect use of surveillance or other investigativemethods. The benefit to the committee of using us as one of its benchmarks or simply for research is that TheSurveillance Group is unique in the fact that we work for both public and corporate entities. Both entities aregoverned differently. For public bodies we operate within any RIPA Surveillance Authority gained by them.When working for financial institutions our actions are governed by the individual contracts we have in placetogether with our clients’ various operating parameters under the FSA and guidelines set out by other bodiessuch as the Association of British Insurers. Licensing based around a RIPA style of surveillance authoritywould not work for financial institutions since it would not be cost effective and would invariably lead toclaimants and other subjects of surveillance being made aware of our presence before we could determinewhether they were guilty of any form of fraud. We therefore feel that it is of paramount importance that anyconsultation is conducted by individuals with both criminal and civil investigatory experience.

As the largest surveillance company in the UK one would expect that our employees and managers wouldbe in court a great deal giving evidence. In reality however this is rarely the case since we work to high enoughstandards and in an objective manner to insure that legal teams representing those we are placing undersurveillance invariably accept the validity/integrity of our evidence gathering procedures and do not contestthe submission of our footage as evidence. It is important to note that every aspect of the surveillance weundertake is linked to either civil or criminal litigation, where exaggeration, fraud or other types of crime aresuspected. In all of these instances there is a good/legitimate case for the use of surveillance and we feel thatthe same basis should apply to any licensing proposals. Proportionality should therefore be one of the majorconsiderations when deciding what operating parameters should be covered under a licence. The type ofsurveillance used by journalists in the case of Madeline McCann to simply “mine sweep” for a story shouldbe totally prohibited or lead to the suspension of a license.

Although we do not undertake any form of traditional private investigations such as those relating to divorceetc we are conscious of the fact that any individual with a computer can access a huge amount of open sourcedata on anyone they choose or indeed simply purchase a video camera and follow whoever they choose. Wedo not like being included within the Private Investigator category but accept that this is necessary. To that endwe would request that the legitimate activities of businesses are not subjected to unreasonable licensing criteriathat mean that those businesses can no longer trade or undertake activities that private individuals or noncategorised businesses can.

We have grave concerns regarding the illegal application of tracking and digital monitoring devices. Trackersare freely available on the internet for a couple of hundred pounds and transmit their data via a sim card thatcan be extracted from any “pay as you go” phone. This means that it is very difficult to establish who deployedsuch a device if one is found. Not only does the deployment of such a device entail “tampering” with another’sproperty but in our mind it constitutes a breach of that person’s right to privacy. As part of our courses weteach government users of such devices how to apply for a specific Intrusive RIPA Surveillance Authority todeploy such a device. It is ridiculous that private investigators can utilise such devices without having to makea similar application and we would request that any use of these devices by private individuals or privateorganisations should be prohibited under the licensing criteria. As a training organisation we receive countlessenquiries each month asking for our opinion on the use of such devices and we have been alarmed by thenumber of people using them on a daily basis.

We are conscious of the fact that our industry probably has more sole traders than it does major companiessuch as ours and we do not want to force these individuals out. What is important is that a specialist licenceis mandatory to change the way companies and the media instruct private investigators. The majority ofbreaches and illegal acts seem to have been carried out by sole traders or small companies who feel they areperhaps below the radar of regulatory and law enforcement bodies. We wonder whether this was the reasonthey were instructed in the first place. With this in mind complete licensing of the industry is surely the onlyway to protect the privacy of the general public.

January 2012



Written evidence submitted by The Institute of Professional Investigators [PI06]

IPI Evidence

Since 1976 the Institute of Professional Investigators has sought to encourage and promote its members toachieve and maintain a high standard of professionalism whilst engaged in their investigative activities. Ourorganisation is the only “Institute” within the private investigation sector in the United Kingdom. We considerour membership to be truly representative of the investigation sector.

The Institute of Professional Investigators was formally created in 1976. Prior to that the primary organisationfor private investigators (only) was the Association of British Investigators (ABI). ABI members sought tocreate an “academic” arm to that trade association and this was catered for in an ABI vote circa 1975. However,a new Council came into being and the academic concept was shelved. As a result the members supportingthe academic, professional ideal left the ABI and started the Institute.

Unlike the ABI, the IPI was opened up to professional investigators in other sectors, particularly the publicsector—police forces, HM Forces, government departments, etc. There has never been a high uptake from thepublic sector, and their representation in the IPI remains small. Therefore the main body of our membership ismade of investigators in private practice, with acceptable professional qualifications, and therefore eminentlycapable of assisting the Committee in its deliberations.

The Institute has been active from its inception in proposing the implementation of licensing for the UKprivate investigation industry, and in 1976 supported then MP Brian Walden in the introduction of a privatemembers bill to that end.

Why regulation has not already been introduced, ten years after the Security Industry Act established astatutory framework for it

Following the introduction of the Private Security Industry Act the Institute and partner associationsincluding the ABI entered into voluntary consultation with the SIA with a view to assisting it in its work. TheInvestigations Sector |group was formed, and was highly representative of the sector.

The primary issue raised was simply identifying what “private investigation” encompassed, and an initiallist of some 169 activities was created. This must in some way have affected the timeliness of the introductionof licensing for our sector, and it was later narrowed down to a more manageable level. Suggestions were alsomade at that time (2002) about removal from the PSI Act with a view to the investigation sector coming underthe legal regulatory regime, eg the SRA or similar. (That has now been adapted to a suggestion that the sectorbe overseen by the Ministry of Justice.)

The IPI attended all of the consultation events held by Kevern Oliver and Skills for Security, a process overalmost five years that resulted in identifying five “core competency”, areas that were felt by most (but not all)to address the main activities of investigation, namely:

1. Conduct investigations—a generic title covering the client interview and management ofenquiries.

2. Conduct interviews (witnesses and “suspects”).

3. Search for information and preserve evidence—including open source (public and internet)intelligence.

4. Conduct Surveillance—initially its conduct, then later reduced to understanding of surveillancelaw and method.

5. Understanding and working to relevant Laws and practices—the legal background to ouractivities, with some focus of prevention of harassment, data protections, human rights law andfreedom of information.

These were detailed in a document dated August 2007. The content was made available to Awarding Bodies,at least one of whom (EDI) drafted a qualification and course to deliver it.

(In 2009 the main associations also assisted Skills for Security in reviewing the National OccupationalStandards for Investigations which, although they were not the licence qualification in themselves, would havebeen a foundational document when developing qualifications for a licence. This was done routinely, and notprior to or specifically for the licence process.)

However, after these competencies were tentatively agreed to cover what was needed, the SIA then suggestedthat competence could be provided for through 60 hours training (30 for Precognition Agents in Scotland), agross oversimplification of the work needed to become competent in this field. It seemed odd that “simple”statement taking in Scotland needed 30 hours training, while additional training in surveillance, informationgathering, interviewing, law and practice, tracing, etc. could be catered for in the same time period.

All that said, it was at this point that all consultation seemed to stop—I would state that this seemed tooccur after a meeting at Skills for Security in September 2008, when the SIA heard what turned out to be finalrepresentations by the main associations and other interested parties.



The various consultation documents had been circulated up to this time including the PI/PA consultation, inessence based on or at least influenced by what had been “agreed” at Skills for Security/SIA consultations, butat the point of an expected confirmation that licensing would be brought in by March 2011, election purdahwas implemented. This has resulted in further delays because the whole process appears, on the face of it, tobe starting again despite the levels of agreement and acceptance identified up until 2008.

In our opinion, the main factor in the delay (taking into consideration that licensing of the larger sectorstook precedence) was a gross under-estimation of what private investigators do, and just how professional theywish to be at performing those functions.

This under-estimation could have resulted from a number of factors, eg:

— Failure to realise that since a substantial proportion of private investigators come from thepublic sector, where they have undergone substantial training in law and methodology, noeffective training model has been created in the private sector. As such, development of courseshad to be undertaken by interested Awarding Bodies and training providers, who themselveswere equally uninformed about the sector.

— Failure to understand that private investigation is a wider activity than insurance investigation,process serving, tracing and domestic investigation. We believe that the 169-area schedule wasa surprise to the SIA.

— The possibly unexpected realisation that professional private investigators have a substantiallyhigher level of expected knowledge (in law, court practices, scene forensics, etc) than the othersectors licenced at the earlier stages. It is the Institute’s opinion that (ethical) privateinvestigators’ activities are more akin to those of the legal sector and that their activities aredirected more to service of that sector, and as such the relatively minimal licensing/competencymodels applied to the manned guarding, CVIT and close protection sectors were unlikely to beapplied as effectively or as quickly to investigators, even if the licence administration processwas the same.

— Perceived resistance by some of the larger investigative bodies (eg The Risk Advisory Group,Kroll, Control Risks) to the introduction of licensing for their staff. They are considered “majorplayers” and influential at a high level, and suggestions have been made in the past that theirmethods have, on occasion, been questionable. Anecdotally, their reluctance could be the resultof a number of considerations, and their lack of involvement (save Control Risks) in SIAconsultations attended by the other associations make it impossible to accurately identify theirconcerns. However, given that only character (CRO) and competence checks were mooted fromthe off, the rationale for their resistance is unknown—even cost implications would arguablyhave been minimal as their staff are usually experienced before engagement, and the fees theyenjoy are supposedly quite substantial.

Whether the case for statutory regulation has been made, including the potential for harm to both clients andsubjects of investigations in the unregulated industry

All IPI members, identified by the nominative MIPI or FIPI, have proved to their peers, through objectiveassessment of their character and their academic and professional qualifications that they know what they aredoing, will always act ethically and correctly, and will always justify their costs. The same applies to membersof the Association of British Investigators. To the best of our knowledge, these criteria have not been appliedby any other organisation or association, at least to the same degree.

The IPI is absolutely committed to professionalization of this industry. As things stand, anyone can get acar, a computer and a desk and style themselves as a private investigator. No training is required, nor is goodcharacter a prerequisite as it is in other professions. Nor is a convicted person barred from conducting enquiries.Given that properly founded investigations can and usually do result in or prevent court proceedings, anuntrained, unethical investigation will have consequences for the ill-informed client. Improperly obtainedevidence will not be admissible in (expensive) court actions. And, of course, evidence not obtained because oflack of knowledge/training/experience is no use to anyone. Clients and lawyers may also find themselvesanswering for the actions of their instructed investigator.

From another perspective, in the absence of regulation a client whose motives are questionable will find anunethical investigator—stalkers, criminals, etc, come to mind. In the USA, investigators have frequently beenused by stalkers (etc) to trace their intended victims, sometimes with fatal results. Put simply—if police officersregularly use the PNC to find things out in domestic or legal proceedings (for themselves or for paying clients),and the press uses unethical PIs for illegal activities to gain information to sell to the public, then an unethicalPI will find a way to do the same, and for the same or worse purposes. Regulation that prevents or at leasthampers this will make the unethical client think twice about undertaking an illegal activity either directly orthrough an agent. Such incidents can never be completely prevented, but at least the potential penalty willreduce occurrences of impropriety.

Another rationale—equity requires that both sides in a dispute have equal access to professional services.For example, would a defence lawyer expect a lesser service from their investigators than that provided by the



Crown? The existence of a competence-based licensing regime would assist the legal profession by ensuringthat only licenced, competent investigators serve them, and their clients’ interests.

Whether compulsory licensing should be part of the regulation and, if so, whether it should includecompetency criteria

For these and other reasons, the IPI supported the SIA in requiring that both character and competencycriteria were addressed in licensing for our sector, and will continue to advocate this approach.

The likely cost of regulation to Government and the industry

For the industry, cost is a consideration. This can be balanced by the knowledge that many PIs, coming fromthe public sector, will obtain their training prior to needing a private licence. However, potential investigatorswho do not have this background (in particular school-leavers, graduates and “direct entrant” investigators)may have to finance their own training, or have that training provided by an employer who can bear the cost.

It has been suggested by the SIA and EDI (a qualifications Awarding Body) that 60 hours training isacceptable for competence in investigation. That is a seven and a half day training course—an estimated £2,500minimum based on the cheaper end of the market seminar rates.

A basic police suspect/witness interview course is five working days; a surveillance course is three weeks(plus a four week driving course!); a law course can last weeks. A restriction or expectation that competentinvestigators can be created in 60 hours is therefore, in our opinion, overly ambitious and does not serve theindustry or the client. (This may address those already in the sector who need an update, of course.)

Unfortunately, this means that potential costs to the industry could be untenable unless provided “in-house,on-the-job”, supported or replaced by distance learning. In balance, the Spanish requirement of a degree levelqualification is equally untenable.

We feel there is a place for competence in licensing, for the reasons stated ante, but accept that the answerto question on the provision of training and qualifications may yet need to be answered.

However, the following observations may assist:

A Solicitor, paying £1,600 per annum for a practising certificate, has paid about £10,000 for thequalification, pays about £1,100 per annum for Continuous Professional Development and hasinsurance of about £20,000 per annum. This is too dear for our sector, and implies a degree levelqualification.

A Legal Executive spends about £500 per annum on CPD and, if working in a firm, is not separatelyinsured. Professional Indemnity Insurance, not a condition of a licence under the current regime,costs anything from £200–£1,000 for reasonable cover.

A Bailiff pays £250 per TWO years, but must re-apply every two years at full cost, which hasincreased with every Court fees increase. Subject to having no claims, Insurance is £300 per annum,possibly slightly less. The process also includes advertising the application, (about £350) obtainingCCJ and CRB checks, two a time, one at the commencement of the application and one a weekbefore the Application Hearing. (An extra £80plus.) So, the best part of £600 per annum, every year.

If it assists, a costing analysis was completed and contained in the PI/PA document of July 2007,which can be provided either by us, or the SIA.

The cost of regulation to Government is not something the Institute is qualified to comment upon,but that said, it should not be any greater than that to which it was exposed for the other sectorshitherto licenced.

Concluding Statement

The professionals in this sector have sought licensing for many years. They seek the recognition for theirprofessionalism that licensing will demonstrate. They want to be licensed as soon as possible, and once licencedwill seek to prove their eligibility to have access to facilities which have been denied them thus far.

It is true that investigators would like access to some public body databases (eg Land Registry, DVLA)without the obstacles currently placed in their way but it is not our case that licensing should automaticallyresult in greater access, but it is our case that licensing will be a first step in earning the professional respectthat will one day make that access justifiable, as it seems to be in other countries.

The professional associations’ representatives have volunteered their time in assisting the SIA and associatedbodies in development of a licensing regime that will address all the concerns of the industry, government andthe public. We feel it is time that we had a return on our investment, one that reflects our own desire to berecognised as the professionals that we are, and to move away from the populist view of the man in the mac,or the phone hacking criminals who besmirch our profession’s title.

January 2012



Written evidence submitted by Security International [PI07]

Executive Summary

Attempts at licensing Private Investigators (PIs) can be traced back to the 1950s.

The PI Industry assisted a number of politicians in promoting their bills on security/investigation/privacy.

PIs continued to promote licensing up to the 1990s with support from a number of eminent politicians withlittle to no support from the remainder of the security industry.

A reluctance to license PIs in the past was due to the fear that it would give them a licence to snoop.(Reginald Maudling.)

The PI industry has been studied by a number of notable academics who published their findings in booksand modules for Masters Degree courses.

Regulation has not been introduced because; it is difficult to establish the core activities of PIs. The numberof PIs is unknown and this paper suggests it is below 5,000 rather than the normally published 10,000.

This paper suggests that until the publicity from The Leveson enquiry the activities of PIs has not causedthe public any concern unlike the situation of ten to thirty years ago.

The reduction of unlawful activity by PIs can be attributed to the Human Rights Act 1998 (HRA) and theData protection Act 1998 (DPA) which can now impose a financial penalty on a PI of up to £500,000. TheDPA also makes the client responsible for the activities of their PI.

It is extremely difficult to establish a commonality on the wide and diverse services provided by a PI andsubsequently reduces the chances of being able to establish a suitable competency requirement.

Over the past 40 years government of either persuasion had not been convinced that there was sufficientreason to license PIs despite the widely reported illegal activities. Why should there be justification now whenthe illegal activities are considerably less and there is adequate legislation in place in the form of the HRA andDPA to protect the public.

Regulation without compulsory licensing would mean that the activity is regulated and not the PI. Wherethe activity was being conducted by the end user themselves the legislation would in effect be protecting themfrom themselves.

Investigation no mater how it is packaged is an intrusion into a person’s privacy. That intrusion is alreadyregulated by the HRA and DPA and if it is consumer credit related also by the Consumer Credit Acts 1974and 2006. It is suggested that further regulation of PIs is a case of over licensing.

It is difficult to arrive at a suitable costing for the license fee because the number of PIs is unknown. It isassumed that the initial costs will be similar to those faced by the Security Industry Authority which ran at aloss despite the licence fees of £350 from over 100,000+ personnel. Unless the licence fee is well in excess ofthat the public purse will have to meet the deficit in order to protect the public from a threat that is considerablyless than it was ten to twenty years ago.

The additional cost of training for investigators to demonstrate their ability to achieve the requiredcompetency is likely to be in the region of £2,000. This additional financial burden on an industry populatedmainly by sole operators is I suggest a burden too far. Resulting in a decline in PIs and less revenue to financethe regulation.

Introduction

My references to PIs throughout this paper are those that are not employed by a Public Authority or employedin-house. I suggest that thorny subject is best left for a later date.

Attempts at licensing PIs can be traced back to the early 1950s. Members of the British DetectiveAssociation, later e the Association of British Investigators (ABI), attended the House of Commons to petitionthe then Home Secretary for licensing.

Peter Heims former president of ABI actively campaigned during the 1960s and early 1970s for licensing.Peter provided valuable assistance to a number of politicians who tried to introduce some form of control overPIs often included in a variety of Privacy Bills.

Tony Gardner; the Private Investigators Bill 1969.Security Industry Licensing Bill 1970; Norman Fowler.The Younger Committee on Privacy 1970.The Private Detectives Control Bills 1 and 2 1973; Michael Fidler.Private Security (Registration) Bills, 1977, 1985, 1987; Bruce George.

John Grant, principle of The Institute of Professional Investigators (IPI), in the mid to late 1970s continuedthese efforts. The IPI commissioned their own draft of a bill to license PIs.



In 1985 Chris Brogan took up the baton with support from both ABI and IPI. Chris’ brief was to promotethe licensing argument to industry, commerce and selected politicians and he received the valuable support ofLord Whitelaw and Bruce George.

At that time there was no support from the rest of Security Industry. The British Security Industry Association(BSIA) the largest security association refused to acknowledge that PIs formed part of the security industry.The International Professional Security Association (IPSA) viewed PIs as too small in number to be consideredin the licensing debate which continued until the enactment of the Security Industry Act 1997.

The reluctance over the years to license the activities of PIs despite well documented illegal activities wasattributed to the fear that it would give PIs “A licence to snoop.” (Reginald Maudling.)

PIs have been the subject of a number of eminent publications.

Private Policing; Les Johnston; Deputy Director of The Centre for Police and Criminal JusticeStudies. University of Exeter.Private Investigators; Their services and their clients; Professor Martin Gill and Jerry Hart ofLeicester University.Private Policing; A module in Leicester University’s MSc in the study of Security Management.Private Police; Hilary Draper; ISBN 0 14 02. 2061.5

Question 1

Why regulation has not already been introduced, ten years after the Security Industry Act established astatutory framework for it

It is extremely difficult to establish the core activities of PIs. The Security Industry Authority’s (SIA) researchhas identified in the region of 100 activities performed by PIs. Admittedly many of them overlap. The NationalOccupational Standards for Private Investigators Draft 1.9 (January 2006) published by Skills for Securityidentifies 15 core skills. These skills relate to the services provided by the small/sole proprietor agencies whichmake up the vast percentage of the industry rather than the more niche areas of investigation such as; Fraud;Industrial Espionage; Due Diligence etc favoured by the larger agencies.

It is suggested that there are 10,000 PIs operating in the UK. The two main trade bodies in the UK the IPIand ABI have a joint membership of less than 1,000. IPI also caters for serving police officers and militarypolice officers. There are tracing agencies that operate for debt collection companies which specialize in tracingabsconding debtors. I suggest that there are less than 50 of these agencies with few employing more than fivepersonnel. How many retired police officers are operating part time to just keep their eye in, or individualswho whilst conducting other security functions occasionally provide an enquiry service are unknown. I wouldsuggest that there are less than 5,000 whose main function is that provided by a PI.

Until the recent publicity now the subject of the Leveson enquiry the activities of PIs were in the last 10years not thought to be of a major concern to the public. Investigation no matter how it is packaged is anintrusion into a person’s privacy. That Intrusion has to be lawful; reasonable and proportionate. Article 8Human Rights Act 1998(HRA). The lawful basis in most instances will be provided by the Data ProtectionAct 1998(DPA); Schedules 2 and 3. The unlawful activities of PIs began to wane when these Acts wereintroduced. Clients were less prepared to run the risk of processing the personal data supplied by the PI whoseactivities they were now responsible for. Unlawfully processed information could be challenged using breachesof Articles 8 and 6 (right to a fair trial) HRA. (Jones v University of Warwick (2003) EWCA Lord Woolf;Martin v Mcguiness 2003 ScotCS198 (July) 2003 Lord Bonomy; McGowan(Appellant) v Scottish Water EAT(2005) IRLR 167.)

Conclusion

It is my submission that the answers to this first question are. The number of individuals that would becaught by this legislation is unknown and is likely to be less than half that figure normally suggested. Thedocumented unlawful activity of PIs in the past 10 years is perpetrated by a small number of individuals andis not to the same extent as it was 10 to 30 years ago. The activities of PIs are so wide and diverse it has beendifficult to establish sufficient commonality between the activities.

Question 2

Whether the case for statutory regulation has been made, including the potential for harm to clients andsubjects of investigations in the unregulated industry

In 1971 Leslie Huckfiled MP lectured members of the ABI on the ease with which private information couldbe easily obtained about members of the public.

In 1973 a 28 man squad lead by Detective Chief Superintendent John Hemsley conducted an investigationinto leaks to PIs of information from Banks; Car Registration Offices; the Police Criminal Record Offices.Eighteen Private Investigators were arrested. The outcome of all eighteen cases is unknown to the writer. It isknown that five were convicted two of which were sent to prison.



Section 161 of the Criminal Justice Act 1988 was introduced as a direct result of unsolicited letters fromPIs to Peers of the realm offering to sell information obtained from banks, credit card companies, PoliceNational computer. Section 161 made it unlawful to obtain buy or sell information obtained from a computerby deception. At one stage the House of Lords considered an amendment to make it unlawful to obtain anyinformation by deception. This amendment was later with drawn in view of a clause that was to be includedin the Data Protection Directive 95/46 EC from which the DPA resulted. That clause is section 56 muchdiscussed in PI circles and prosecuted with some vigour by the Information Commissioner’s Office. (ICO)

Conclusion

Past governments of either persuasion did not consider that a strong enough case had been argued for thelicensing of PIs despite a greater proliferation of unlawful activity from the 1960s through to the 1990s thanthere is today. The DPA section 56 specifically deals with information obtained by deception. This section canbe enforced by a fine of up to £500,000. In the next three years we are likely to be faced with even strongerData Protection Legislation. Which will curtail the illegal activities of PIs even more so than the current DPA.

Question 3

Whether compulsory licensing should be part of the regulation and, if so, whether it should includecompetency criteria

Regulation without compulsory licensing would mean that the activity of investigation would be regulated.Therefore any one searching the internet for other than their own personal use is likely to be caught by theregulation. Surely this would mean that in-house research/investigation would be caught by this legislation?This is protecting the consumer from themselves

If Compulsory Licensing is part of the regulation then an investigator who traces debtors for a consumercredit company would need to be licensed under the Consumer Credit Acts 1974 and 2006; The Data protectionAct 1998 (The correct term is notification and costs £35 per year.); The proposed legislation. I suggest that isa case of over licensing.

The Competency Criteria for a Process Server will differ greatly from that of a Fraud Investigator. Toestablish the Golden Thread of competency, a term often used by the SIA, for PIs would in my view be sosimplistic as to provide little to no protection for the consumer.

Conclusion

At this stage of the discussion I have no other comments to make with regard to this question.

Question 4

The likely cost of regulation to Government and the Industry

Any form of regulation is likely to be based on similar regulation with similar set up costs. These costs willbe expected to be met from the registration/licence fees imposed.

If there are 10,000 PIs then the income using the fee introduced for licensing of a manned guard of £350will be £3.5 million. For manned guards the licence fee is for a period of three years. That equates to just lessthan £1.2 million per year.

If I am correct then using the figure of 5,000. PIs the income will be £1.75 million equating to £600,000approx. With 100,000+ manned guards the Security Industry Authority (SIA) failed to break even in its firstyears of operation.

If competence is a requirement then that will require some form of training to be met by the PI or hisemployers. I have earlier referenced the fifteen core competencies suggested by Skills for Security. The goingrate currently in the Security Industry for a training day is £350. If it was possible to do five subjects a daythat is a three day training period at a cost of £1,050. That does not include travelling or accommodation. Amore realistic timetable for the training to have any value and to allow for assessment of what has been learnedis likely to be nearer three subjects a day. The cost to the PI in this instance will be five days @ £350 = £1750.That would put the cost to the PI to in excess of £2,000. These costings do not take into account the cost ofContinuous Professional Development which in my view can only be met by attending courses/seminars. It iswell known in PI circles that PIs are reluctant to go to school especially to revisit investigative processes thatthey have been providing for over 20+ years. Even more so where it may be a subject in which they have nointerest or plans to provide as a service. Those retired police officers and agents who only from time to timeprovide investigation are in my view unlikely to wish to incur these costs which as the manned guardingindustry experienced are not necessarily able to be offset to the client. Result less PIs to be regulated; lessincome to the regulatory body.



Conclusion

Unless a realistic fee is charged the public purse will have to meet the deficit to protect them from a harmwhich in my view is protected by the DPA and HRA and is considerably less than it was 20 to 30 years ago.If the public purse is not to be the loser then a more realistic fee of in the region of £1,000 would seem to bethe option. With training costs this is likely to decimate the business reducing the volume to be regulated.

January 2012

Written evidence submitted by Bisio Training [PI09]

The regulation of private investigators has not been introduced since the establishment of the Private SecurityIndustry Act 2001 for the main perceived reasons that it is simply too difficult and expensive. A few years agowhen engaged in a scoping exercise with Edexcel awarding body to create a professional investigator standardqualification being sought by the SIA, my company was led to believe that a minimum of 10,000 operativesthroughout the UK would need training/testing to meet the basic standards desired. This was a conservativeestimate and could easily be doubled if it included financial investigators, investigative journalists etc. Thelogistics of providing training and assessment of training needs, followed by the attendance at examinationcentres to achieve the award, leading to a licence seemed beyond the capability of such a loosely organisedindustry. However, my training company has addressed this and are currently accredited by EDI awarding bodyfor the training to meet the Level 3 Professional Investigators Award, which has been approved by the SIA asmeeting the standard for potential licensing. Bisio Training Ltd recently launched an online e-learning modulartraining programme for professional investigators and in December 2011 all nine of our first candidatessuccessfully completed the programme and online examination gaining the Level 3 Award. Incidentally, wecurrently have an overseas learner registered on the programme demonstrating the flexibility of online training.

The case for statutory regulation appears to have been made by various well- reported incidents in the mediaover several years, the Guardian (Nick Davies) has been very informative on such cases, including someallegations stretching back to the 1980’s surrounding the murder of a private investigator in London. I was aserving CID officer in Bath at the time and heard gossip from Metropolitan detectives I met in those days thatcaused me to be concerned about the private security industry. When setting up my investigative trainingcompany with my partners ten years ago I was quite adamant that we would only train public authorityinvestigators or those regulated by the FSA etc. We studiously avoided training the unregulated privateinvestigator sector. The incorporation of the European Convention on Human Rights into domestic law via theHuman Rights Act 1998 had a massive effect on police investigators and during my secondment to the NationalCrime Faculty in 1998 I was instrumental in designing training for senior investigating officers in major crimethat was compatible with guaranteed human rights and freedoms. I was therefore aware when I retired fromthe police service in 2001 of the importance that all investigative training should incorporate human rightsissues particularly those of Article 6 and Article 8 to ensure the fairness and admissibility of evidence gatheredduring an investigation. I was not satisfied that an unregulated private investigator would grasp this ethos andthe potential for abuses would still continue without statutory regulation.

Compulsory licensing of private/professional investigators is essential in order to have meaningful regulationof such an industry. Without the sanction of removing an operative’s individual licence (not an organisationallicence) there would be no effective deterrent and transparent remedy to those affected by any wrongdoing.The more professional investigators should welcome this to appear more credible and ethical to their clients/potential clients. Competency criteria as provided for by the EDI Level 3 Professional Investigators Award andendorsed by the Security Industry Authority is also essential to raise or consolidate the standard of investigatorscurrently operating and to provide a benchmark for those entering the industry. Again, I feel that investigatorsshould welcome this to provide the credibility mentioned above.

The likely cost of regulation to Government and the industry is arguable, depending on the means beingtaken. As described above my training company is offering a very accessible means of preparation for the EDIexamination, saving candidates costs of travel, hotel and abstraction from work by simply logging on to anearby computer at their convenience. We currently offer our package, including the Level 3 examination at apolice headquarters rented classroom under strict conditions for £399 plus VAT per person. We feel this is verycost effective to investigators, whether working alone or for a large organisation. The fee payable for thesubsequent licence should cover the realistic costs of administration by the regulatory body, which could behoused with other similar regulatory bodies, eg the DVLA or Passport Offices where issues of identity wouldbe more easily monitored.

January 2012



Written evidence submitted by Cerberus Investigations Limited [PI10]

Cerberus Investigations Limited (hereafter Cerberus) submits in the following memorandum thatinvestigators and investigative agencies are diverse in the quality, capability and moral rectitude of their work.

Some investigators may be unaware of, or choose to ignore, such basic human rights as privacy and suchbasic obligations as being sure of the party instructing them; they may be correspondingly ignorant oflegislation protecting these rights (such as the Data Protection Act) or enforcing these responsibilities (such asthe Bribery and Corruption Act 2010).

However, other investigators are bound by high standards and observe the law, operating on the best ofinformation rather than from the depths of ignorance or callousness.

Any regulation or legislation will always be observed by right–minded investigators conducting honest work.

It is for this reason that Cerberus submits that the Home Affairs Committee appreciates as best it can that,for all the publicity surrounding the subject for all the wrong reasons, not all investigators are corrupt; indeed,some provide a useful and helpful service.

It also submits that the different sorts of services provided by investigators, and the diverse range of clients,are also recognised. This is partly so that knee-jerk reactive regulations designed to curb shoddy practices suchas unauthorised access to (usually famous) individuals’ personal mobile records by investigators at the requestof the popular press, do not negatively impact on honourable businesses such as Cerberus.

Submitter

This submission is made by Mr. Duncan Mee, owner and Director of Cerberus, whose experience as acorporate investigator amounts to nearly 30 years.

Mr. Mee’s background is in the protection of intellectual property rights (hereafter IPRs). He has worked forand alongside IPR owners and attorneys in his time as an investigator.

Factual Information

Cerberus provides information to enable IPR owners to protect their rights.

IPRs are most commonly infringed by counterfeiters but also by others, for example by people “passing off”goods or services as those of the real IPR owner (ie brand) or by the unauthorised sale or supply of goods intrading areas the IPR holder has exclusive rights to (such as within the EU for instance). In all cases theseinfringements deceive the public to a greater or lesser degree depending upon the quality and pricing of therouge goods and services and are likely to leave the consumer with an inferior product/service and with noconsumer protection from the genuine brand.

Cerberus assists the growth and development of IPRs especially through so–called “verification of use”work, where a trade mark’s nature and extent of use—including date(s) of first use and the exact goods andservices to which they apply—have to be accurately ascertained (often to see if the mark is vulnerable tocancellation proceedings through non–use for five years). Such enquiries must be carried out without alertingthe other party for them to have any value, since otherwise the other party will protect itself by making somesmall use.

Cerberus is instructed by IP lawyers, both from law firms and from within large brand owners that havetheir own in–house legal teams. Instructions are also taken from Trade Mark Attorney firms and sometimesfrom the smaller IPR owning brands directly. Cerberus hardly ever undertakes work from individuals and doesnot, for instance, assist with divorce or other non-corporate work.

Cerberus is aimed at professionals with full knowledge of the laws in whatever jurisdictions apply. Ittherefore provides a corporate investigation service, rather than being aimed at individuals for “privateinvestigation” work.

Cerberus works for many of the largest law firms here in the United Kingdom and abroad, and through themor similar IP professionals, assists some of the largest brand owners in the world.

At present there is nothing in law to distinguish companies such as Cerberus from corrupt lone operatives.The excellent reputation that Cerberus holds has been gained from full compliance with all data gatheringtechniques and regulations over many years by the two owners of the business (including from before theyestablished this company seven years ago) with some clients of over 25 years standing. The company employseight people, none of whom are ex–police or from a security background.

The present industry organisations, such as the Association of British Investigators (ABI), are of littlerelevance to what Cerberus does. The ABI is run by ex–police and seems to be mostly for ex–police engagedin the activities of private rather than corporate investigation. Such individuals or companies offer servicessuch as process serving and surveillance for individuals. Most of these are single operatives.



Cerberus undertakes its investigations in order to supply high quality and scrupulous information towell–informed clients. Many of the results are required to be presented before courts, and all results must anddo conform to legal standards.

Cerberus has used discreet pretext approaches and undercover investigation in order to ascertain the supplychain and ultimate source of counterfeit goods, so that trading standards officers and police have been able toconduct raids to apprehend criminals making money from selling inferior, counterfeit or unauthorised goods toan unsuspecting public.

Cerberus has used trap purchase techniques and undercover techniques to lead to the repatriation of stolengoods, working alongside local law enforcement agencies as well as the owners themselves.

Cerberus undertakes monitoring of online or other auctions in order to help protect the IPRs of companieswhose huge research and development costs contribute to the economy and whose hard work and inventivenessis threatened by criminal imitation of their endeavours. It assists in the removal of these infringing listings.

Cerberus makes use of covert enquiries to elicit the intentions of cybersquatters who infringe the IPRs ofbrand owners or, where possible, to secure a price more reasonable than could be secured if the brand ownerapproached the cybersquatter directly, for example, to gain rapid ownership of domain names bearing theirbrand names.

Cerberus was involved in the 2009 film Erasing David, which highlighted to the general public the securityrisks of leaving information with agencies which could be obtained by unscrupulous parties under pretence, orleaving un–shredded documentation in bins.

The discreet pretext approaches employed by Cerberus are necessary to procure the information needed bythe lawyers to protect the IPRs.

January 2012

Written evidence submitted by Steve Bishop [PI11]

When Molly Meacher was the Chairperson of the SIA she envisaged the Security Industry becoming part ofthe police family. A properly trained, regulated and licensed professional investigator would be of immensevalue to the police because if they could be relied upon to obtain evidence fairly, evidence that would withstandscrutiny under s78 PACE, then they could be used to undertake investigations on behalf of the police. Thereis, in my personal opinion, a huge amount of work carried out by the police which could be hived off toprofessional investigators. Their files of properly obtained, properly presented evidence could then be handedto the police for arresting, interviewing and charging of the suspect. A great deal of police time is taken upintelligence gathering, carrying out surveillance, taking statements and preparing files, all of which could beachieved by licensed and regulated but non warranted investigators. Indeed, more than 66% of the investigatorsworking in the Major Investigation Team in which I am a manager are non warranted officers. We have, sinceworkforce modernisation over two years ago, investigated over 30 murders balancing enquiries accordinglybetween warranted and non warranted officers. Indeed, on occasions we have contracted in investigators fromthe private company G4S to carry out enquiries on major incidents. Although these are all ex police officerswho have been through vetting again since their retirement, they are essentially professional PrivateInvestigators. We are one of only a handful of forces that have opted for this approach to major crimeinvestigation but other forces still use warranted officers to carry out functions capable of being carried out bynon warranted officers. The police are stretched to the limit and with further cuts looming that is unlikely toimprove in the near future. Would it not fit in with David Cameron’s philosophy if more work could beundertaken by professional private investigators, going therefore from a public service to a private service. Theonly caveat would be of course that the investigators should be properly trained, vetted and regulated. My onlyother recommendation would be to give these investigators some sort of limited access to certain police recordswhich could be achieved through a Central SPOC. This would alleviate the need for investigators to evenconsider obtaining some of the most basic details unlawfully.

January 2012

Written evidence submitted by Bishop International [PI13]

Executive Summary

As chief executive of a corporate investigations business that has operated from London for more than 20years, I am, in principle, in favour of licensing private investigators.

However, some of the requirements set out by the Home Office in its response to the Partial RegulatoryImpact Assessment in 2007 were, in my opinion, misguided and mismatched to the realities of the sector. Theill-conceived nature of the legislation and the resulting difficulties of implementation may have stalledlicensing.



The legislation and suggested regulation do not take into account the range of constituents in the industry,their very different clients, services, levels of organisation and variety of backgrounds. It suffers from a one-size-fits-all approach. There are three main areas which require amendment if the legislation is to work to thebenefit of the public, the sector and the regulator.

The first area of concern is the requirement to license anyone working to obtain information “about theactivities of a particular person.” The requirement threatens the use of specialists employed on a freelancebasis and, therefore, should be reconsidered. The second area of concern is the requirement for a publicregister of investigators. It threatens the safety of investigators, particularly those working on issues related toorganised crime.

The third area of concern is the assertion that a “competency requirement” would protect the public frompossible harm, a claim which I believe to be unfounded and which would impose an unreasonable andunproductive burden upon investigation businesses.

MemorandumRationale for Regulation

In 2007 the Home Office maintained that “the only current mitigation against the potential harm caused byunethical individuals or companies” is being reported to the police or to the Information Commissioner. It wenton to say that “neither prevents an individual from operating within either sector to begin with.” The implicationis that “unethical” people should be prevented from entering the sector. That is no more possible than it wouldbe for any other sector. What is possible is to prevent people with criminal records from entering the sector.

The Home Office recognised that “the full scale of any potential harm caused by individuals or companiesoperating unlawfully or unethically within the private investigation or precognition sector is not known” andthat “there is no ready source of quantitative information.” The recent phone hacking scandals have givencause for concern. However, to the best of my knowledge, only four people who have styled themselves asprivate investigators have figured in the inquiries to date and only one has been arrested. While others maycome to notice whose behaviour would be deemed unacceptable, they are unlikely to represent a significantproportion of the sector. It does not seem rational to create an expensive regulatory burden for an entire sectorbecause of the ill-considered or illegal activities of a handful of people.

In the one table of statistics presented by the Home Office in 2007 which recorded confirmed or suspectedbreaches of Data Protection laws, the figures were unimpressive: 23 investigators under investigation, fourconsidered for prosecution, six considered for cautions and six for undertakings and seven actively beinginvestigated. As of 2007, formal action taken against investigators since the 1998 Data Protection Act included14 prosecutions, one caution and four undertakings. To put that into context, the Security Industry Authorityestimated that there may be as many as 10,000 investigators in the UK. The numbers of suspected andconfirmed breaches do not seem to justify the full weight of a complex regulatory system.

In 2007 the Home Office pointed out that there is not “a uniform or consistent approach by employers forvetting (either in terms of competence or probity) private investigators.” If it became possible for investigationcompanies to learn whether a prospective UK employee or contractor has a criminal record, it would answer,as far as possible, the question of probity. The issue of competency is dealt with below.

The Licensing Requirement

The broad scope of the Home Office licensing requirements for the private investigation sector does not takeinto consideration aspects of investigations at the corporate level. The stated requirement is for anyone to belicensed if they are obtaining information “about the activities” of a particular person. That, however, conflictswith the requirements within the corporate world for effective due diligence. Corporate investigation companiesinevitably need to go outside the traditional investigative world to employ people with esoteric knowledge.

Such inquiries often relate to a significant transaction in the City of London. In such circumstances, weemploy people on a freelance basis who have an intimate understanding of a business sector or community.Investigations that require socioeconomic or other technical knowledge may require the expertise of anacademic. Such people are not investigators by vocation. They are consultants taking on a one-off assignment.Investigative work is not the substance of their livelihood. They will not have any interest in being licensed asinvestigators and there should not be any requirement for them to do so.

This is not a negligible issue. If the sector is unable to employ such people on a freelance basis our corporateclients, including listed companies, financial institutions and law firms, will lose the ability to learn what theyneed to know, either in advance of a transaction or when trying to recover from a civil or criminal loss. Itwould be a crippling blow to an otherwise well-used and highly effective service that accomplishes what theSecurity Industry Authority says it wants to achieve—“protection of the public.”

I would suggest that such people employed on a freelance basis should be considered to be conducting anactivity which is “incidental” to their normal work and therefore exempt from the licensing requirement.Furthermore, investigation company directors should be licensed to decide who may qualify for exempt statuson the grounds of carrying out an activity which is “incidental” to their day-to-day activities.



License Register and Identification

There should not be a public register of licensed investigators. Nor, as the Home Office suggested, shouldthere be a requirement for the license to be carried and produced on request.

It appears that the Home Office was uninformed about the nature of investigations, particularly those carriedout in connection with organised crime. For purposes of such investigations it is often necessary to pose assomething other than an investigator.

If, in those circumstances, someone was found to be carrying such identification they could be in danger oflosing life or limb. The suggestion illustrates a gross ignorance of the nature of investigative work.

The Competency Requirement

I have a strong objection to the implementation of competency criteria as outlined by the Home Office. Thespecific requirements as defined in the Security Industry Authority’s October 2006 document “PrivateInvestigator Best Practice” are so rudimentary and wide-ranging as to be practically meaningless. It is a list ofmany administrative tasks, general observations about the need to understand relevant law, advice on how tointerview people and gather evidence, how to carry out surveillance and suggested standards of behaviour.

Given that, by the SIA’s own admission, the vast majority of people who enter the investigative trade comefrom related areas of work (police, customs, intelligence and security services, military security or intelligence,journalism, the law, etc), it seems senseless to have people who have spent years in such endeavours “taught”those skills by people who may have no more—and possibly less—competence than they have. It is moregalling that they would have to pay for such instruction and assessment.

Individuals tend to find their own place in the market. A career in police surveillance does not necessarilyqualify someone to understand an international fraud. Conversely, a career in the Crown Prosecution Servicedoes not qualify someone to understand the practicalities of surveillance. However, both career paths mayenable an individual to work productively as an investigator. The range of activities is so wide as to make anysingle competency course impossible as well as unnecessary.

The Home Office asserted in 2007 that to impose licensing without competency requirements “would noteffectively address the risk posed to the public,” when in fact the only risks identified in its public documentswere the 14 prosecutions for breaches of the Data Protection Act. If each of those offences had been committedby a separate investigator—taking into consideration the SIA’s estimate of 10,000 investigators in the UK—the percentage of offenders in the licensed population would be .0014%. That hardly justifies the impositionof a competency regime and its associated costs.

The suggestion that licensing without competency requirements would not address “the harm” of unlawfulor unethical practices by “rogue elements” within the sector is nonsense. It implies that the converse is true, iethat competency requirements would “greatly reduce the likelihood of harm through unlawful behaviour.”There is no evidence whatsoever for that assertion. People with criminal intentions do not generally object topaying for a course if it gives them the legitimacy to carry on illegal practices.

A reasonable argument can be made for testing an understanding of the law as it applies to investigations.The Highway Code is a good example of how to educate people in order to test their knowledge of relevantlaw. There is no reason why a similar system cannot be adopted to test investigators on their knowledge oflaw relevant to their work. From the regulator’s view it would be cheaper to administer and from the licensee’spoint of view cheaper and easier to use.

New entrants to the investigations trade who do not come from a relevant background should be required tofind an apprenticeship with an investigation company. Their first year of employment should require aprovisional license (which would amount to a criminal record check) and, with the endorsement of theiremployer, they should be entitled to apply for a full license one year from the start of their apprenticeship.

The Home Office Preferred Alternative

The assertion by the Home Office in 2007 that the SIA concluded that its “research” had “demonstratedsupport for a formal training route” is belied by the fact that its conclusion was based at least partly onresponses from “a range of education and training bodies.” It is hardly surprising that education and trainingbodies would welcome the prospect of a whole new sector for training.

As the Home Office pointed out at the time, “it will not be possible to assure 100% compliance withlicensing, and there will always be elements of unlawful or unethical practices.” That statement isincontrovertible. What is not true is the assertion that “competency requirements reduce that risk.” This is thecrux of the issue. Competency bears no relation whatever to honesty or ethical behaviour. Harold Shipman, thedoctor who murdered at least 250 of his patients was—until caught—regarded as a highly “competent” medicalpractitioner. Albert Einstein, who failed a high school examination, and might therefore have been thought ofas academically incompetent, became one of the greatest physicists of the 20th century and wrote extensivelyon the ethical responsibilities of science. Competency has nothing to do with how people behave. Cost andImpact of Options.



In 2007 the Home Office estimated that the “typical learning route” for a company employing teninvestigators would cost £9,000, which would be in addition to the licensing fees. That would be followed byon-going “refresher training.” Including loss of earnings, the costs for a 10-person company was estimated as£11,450 initially with periodic additional costs of £7,390. The figures would be likely to be considerablyhigher today.

If one accepts that competency requirements have no benefit, ie they will not have any significant impact on“harm” to the public, analysis of the proposed costs becomes irrelevant. No fees, no matter how great or howsmall, will protect the public or other interested parties from illegal or unethical behaviour. Since that is thestated purpose of the “competency requirement,” imposing such costs on investigators and investigationcompanies is an unreasonable burden.

The absurdity of the competency requirement becomes even more obvious when one considers the HomeOffice’s observations about “European Issues.” If an investigator from another EU country were to come tothe UK to carry out an investigation he or she could legally do so “without being subject to any prior check.”In other words, a resident of another EU country could arrive in the UK to carry out an investigation withoutany criminal record check and with no consideration given to the “harm” that person might cause, while peoplewho have established track records in the UK would be required to meet so-called competency requirementsat considerable cost.

Competition Assessment

The Home Office’s 2007 assessment of the investigation market missed an important point. It is not simplya question of whether the UK sector will suffer because of the proposed regulations. The bigger issue iswhether corporations, financial institutions and law firms that depend upon UK companies to undertakeinvestigative work will find that they cannot get the service they need.

During the last 25 years the UK has built a sophisticated corporate investigations sector that servicescompanies around the world. There may be as many as 20 companies in the UK that undertake investigationsat a corporate level. It is likely that the sector is worth more than £100 million to the nation’s income. If theregulatory framework in the UK becomes too onerous or cumbersome, the business will migrate to moreamenable jurisdictions.

The Home Office’s assertion in 2007 that “it is not believed that regulation will significantly limit the abilityof suppliers to compete” is true enough within the UK market. However, the real competition is for the £100million worth of business in the international corporate market. It is that business which will suffer if theproposed regulatory scheme is not reconsidered. Moreover, the ability of the business and legal community tomake best use of a highly specialised service would be severely hampered.

Conclusion

A licensing regime for investigators under the aegis of the Security Industry Authority would make senseproviding it operates in a relatively simple and economic manner. It should include a criminal record checkthat would eliminate known criminals from the investigation trade. It should also include a written test notunlike that for a driver’s license to ensure that investigators are aware of applicable law. The costs associatedwith such a regime would be acceptable to most people in the sector and would, in so far as it is reasonablypossible, protect the public from harm.

January 2012

Written evidence submitted by The Association of Certified Fraud Examiners [PI17]

The Association of Certified Fraud Examiners is a professional body that represents some 60,000 membersworldwide. In the United Kingdom the UK Chapter represents some 950 members of which approximately50% are fully qualified Certified Fraud Examiners. The primary role of a Fraud Examiner is to investigatefraud and corruption. Many also play an important role in Fraud and Corruption Risk Management in itprevention and detection. As an investigator a fraud examiner has to be competent in gathering evidence in allits forms—documentary, forensics, etc, interviewing witnesses, taking statements, writing reports and givingevidence in court. They have to be knowledgeable in, and apply the law relating to, Data Protection and HumanRights, and depending on the type of investigation, knowledgeable in Employment Law, Financial Regulations,Anti-money Laundering, Bribery Act and other relevant legislation.

To qualify as a Certified Fraud Examiner a member has to study and demonstrate competency throughexamination. To maintain their status members are required to undertake at least 20 hours qualifying ContinuedProfessional Development every year. The ACFE is the only investigative sector professional body in the UKwhich currently has this require to demonstrate professional competency. Our members also have to be of goodstanding and comply with a strict code of conduct.

Our membership ranges from individual who are in private practice who would otherwise be classified as“Private Investigators”, to investigators working for large corporate consultancies such as Ernst Young and



Price Waterhouse. We also have members who work in fraud investigation and counter fraud in the publicsector and for internal audit departments of large corporations. While some of our members will have a lawenforcement background, many, because of the financial nature of fraud and corruption, have qualifications inaccountancy and auditing. We also have members who are legally qualified. Whatever their background, theACFE accreditation as a Certified Fraud Examiner demonstrates their competency in conducting professionalinvestigations and in risk managing all aspects of fraud and corruption.

Previous attempts to license investigators appears to have focused on those that would be classified as PrivateInvestigators and Enquiry Agents who carrying out general investigations or making enquiries on behalf ofprivate clients or the legal profession. It appears that those investigators who were employed by other entitieswould not be covered while accountants, lawyers, and journalist, even when carrying out investigative activitywould be exempt from licensing.

The ACFE view is that all investigative activity should be regulated and licensed to ensure that there are noloopholes through which rogue investigators can operate and that professional standards in investigation areacknowledged and maintained. As such we feel that this would mean that all our members would be affectedby any such regulation.

We are aware that there is a proposed competency aspect to licensing and that this is being set at NVQLevel 3. The ACFE agree that this should be the minimum standard in the UK, but want any licensing authorityto recognise that those with other equivalent or higher qualifications are acceptable as being adequatelycompetent without further need for study or examination as is the case which other regulatory bodies. This isespecially important not just in terms of the ACFE Certification but also for those that have already taken stepsto demonstrate their professional standards in investigations at higher leves such as Edexcel’s Certificate inProfessional Investigative Procedure at Level 7, and Post-graduate Diplomas and Masters in Fraud Managementavailable from the likes of Universities of Teeside and Portsmouth. At the same time, we feel that a qualificationin accountancy or law is not sufficient in itself to demonstrate competency in professional investigativeprocedures and that should not be exempt from regulation should they want undertake investigative activity.

This begs the question of defining “investigative activity”. We believe that this should include the basicelements of gathering evidence or intelligence in documentary, forensic form or through observational(surveillance) activity; interviewing of witnesses and taking statements; submission of investigation reports;and giving evidence as a professional witness in a court of law.

We would differentiate investigations undertaken by for journalistic purposes where the information is notused, or proposed to be used, as legal evidence and should not be covered by proposed regulations.

In Summary

The ACFE supports the regulation and licensing of “investigative active” regardless of the status of personundertaking it.

We support a minimum level of competency which is demonstrated by study and examination, but wouldexpect the regulating authority to recognise existing qualifications that are equivalent to or high than thosebeing proposed, without further cost or examination to the licensee.

We also believe that “Investigatory Activity” should be licensed as opposed to simply “Private Investigators”.

Addendum

Following the Seminar on 14 May 2012, I would like to make the following observations.

The Seminar very much concentrated on the issue of breaches of privacy or personal information. Somewhatbiasedly, in my opinion, the Committee had presentations that presented the view that these breaches were by“Private Investigators”. While the perpetrators may refer to themselves as PIs as far of the profession isconcerned the brokering of illegal personal information does not form any part of the role of a professionalinvestigator. It is for this reason that the ACFE and other professional bodies wholeheartedly support theregulation of investigatory activity so as to ensure that there is a differentiation of those that work professionalwithin the law and those that do not. To this end I would suggest that “Private Investigator” become a protectedtitle, as in the case of Social Worker, so that nobody can use such terminology to describe themselves withoutbeing subject to regulation.

I also felt listening to the presentations that matter of the brokering of personal information is actually aseparate issue from the regulation of investigators which should be focused on the core functions that identifya professional investigator—as set out above.

I felt listening to Richard Thomas that his strategy for targeting the market for personal information wasflawed. Firstly you cannot control or regulate demand that creates a market. This is a fundamental commercialprinciple of a free-market environment whether that demand is legal or not.

Secondly, he targeted “private investigators” that were in fact the brokers, or the man-in-the-middle. Abroker does not create demand; he fulfills the demands of the market by acting as the go between with thesupplier. In that respect, Richard Thomas failed to grasp the dynamics of the market for personal data.



Thirdly, any risk manager will tell you that the best way to tackle this is issue is at source ie the supplier ofthe personal information. Such a strategy can be seen in the Bribery Act where there is corporate liability forany company whose employees, agents, etc. breach it. There is also a specific requirement, in order to providea defence, to have adequate procedures in place to prevent bribery and corruption. If the if the ICO adopts asimilar strategy, maybe by tighter regulation of information controllers and processors, I believe this would befar more effective in stopping the illegal trade in personal data than wasting time on rogue PIs andinformation brokers.

As such I implore the Committee to not be distracted by the issues raised by both the InformationCommissioner and the media hype surrounding the Levenson Enquiry in relation to breaches of privacy andpersonal data, but to concentrate on the positive functions that a professional investigator engages in to helpfight crime—especially fraud, and administer justice through the law or other regulation.

May 2012

Written evidence submitted by The Ravenstone Group [PI18]

Background

The Ravenstone Group is the largest independent provider of insurance claims investigation services in theUK. The Ravenstone Group have been in business for 20 years and employ over 100 admin support staff andover 400 field operatives. The Ravenstone Group is a Service Provider. The Ravenstone Group obtain evidencefor insurers, or defendant solicitor’s, acting on their behalf, to assist them in defending claims made againstthem by either their Policyholder or Third party claimants. The Ravenstone Group also analyse insuranceclaims data to search for fraudulent activity and assist in detection one off frauds and large scale fraud rings.For example, last year one fraud ring detected saved the insurer over £5 million.

The Ravenstone Group is highly regulated, constantly monitored and regularly audited by our clients to theirspecific exacting requirements to ensure that we not only operate within the legislative requirements but alsoto their own customer service demands. In order to meet such client requirements The Ravenstone Groupprimarily select staff with a Police or FSA background. All staff and all part-time and all subcontract operativesare CRB checked both at initial employment and annually thereafter and undergo a 12 month probationaryperiod before being accepted. Additionally, staff will be trained in each client’s specific requirements. All fieldbased staff go through an initial two month training and one to one mentoring programme. Only following 12months of satisfaction operation, including exams and protracted tests, are staff permitted to operate alone.

All of the Ravenstone Group’s clients are either FSA regulated Insurers, SRA regulated defence Solicitorsor FSA regulated Banks. The Ravenstone Group does NOT undertake investigations for private individuals orClaimant Solicitors.

Additionally:

— The Ravenstone Group holds 1S0 9001 2000, and has done so continuously for 20 years andhas held IS0 17799 for seven years. Consequently, our practices and procedures and datasecurity are also regularly externally audited by independent auditors as well as by our clients.

— The evidence The Ravenstone Group gather is done so in accordance with Civil Courtprocedures and in some cases to criminal standards so it can be, and regularly is, presented inboth Civil and Criminal Court without challenge.

— The Ravenstone Group are represented on several trade bodies relevant to our field operationincluding IFIG, IFED and Protect.

— The Ravenstone Group work closely with MIB and the Police, HMRC and Court agencies.

Recommendations

The Ravenstone Group support developments that would ensure all investigation services and activities aremonitored and audited. The Ravenstone Group appreciate the magnitude of the resources to implement such adesire as investigation services are populated by a diverse array of operations ranging from “one-man soletraders” selling services to the public, to those like The Ravenstone Group whose activities are alreadymonitored, regulated and audited by their clients.

The Ravenstone Group suggest that the Select Committee consider the implementation of licensing,regulatory controls, monitoring and auditing of all those investigation firms that provide any part of theirservices that are not covered by documented procedures that are audited by their clients. Operations whoseclients are registered businesses (Ltd Companies, LLP’s PLC etc) and those clients regulate, monitor and auditthe investigation activities to documented procedures we suggest be required to register this status. Allinvestigation services would therefore be either licensed investigators (LI’s) or registered (RI’s).

The Ravenstone Group suggest that the LI group could be regulated by the Association of BritishInvestigators whilst the registration of the RI’s be overseen by the FSA, ABI (Association of British Insurers)or a new body which representation from each of these authorities. To assist this exercise The Ravenstone



Group is prepared to help advise, design and implement the regulations, training and auditing procedures basedon our current working practices and, if necessary, bring together a trade association to administer this.

The Ravenstone Group request the opportunity to orally present our suggestions and opinions to thecommittee.

May 2012

Written evidence submitted by GPW [PI 19]

Proposed Regulation of the “Investigations Industry”

At the recent invitation of the Clerk to the Committee I respectfully submit the following comments forconsideration in your review of a possible regulatory framework for what is loosely dubbed the“Investigations Industry”.

By way of background, I am the Chief Executive of GPW + Co Ltd (www.gpwltd.com), a UK incorporatedBusiness Intelligence and Investigations Consultancy headquartered in London with a small office in Dubai.

Before joining GPW in 2004 I had been Regional Managing Director of Kroll in Asia, based in Hong Kong,prior to which I had been that company’s Regional Managing Director for all of Europe, based in London. Mythree co-shareholders and the original founders of this company had all been senior Kroll executives until2004, and our senior partner, Patrick Grayson, founded the original Kroll office in London in 1986.

We enjoy a profitable turnover of approaching £11 million per annum and currently employ 47 full timestaff in London on salaries of between £25,000 and £150,000. We employ no former police officers and ourstaff is comprised almost of exclusively multilingual, top level graduates for whose recruitment we competeagainst Government, financial institutions, management consultancies, accountancy and law firms and othertop-tier professional service providers.

Although I was closely involved in discussions with the Home Office and the SIA leading up to 2007 I havenot been so during the most recent round of discussions between your Committee and those of our peer-groupfirms whom you have met. I hope therefore you will forgive me if some of what follows is based more on thegeneral thinking that prevailed up to 2007—and with which I was familiar—rather than reflecting the nuancesof any more recent thinking by the Government or by your Committee.

We are not averse to fair regulation.

In common with other leading firms in the sector we are not averse to a regulatory framework within whichwe should operate, so long as it is proportionate, appropriate and equally applicable to all those against whowe compete commercially or who carry out the same activities.

Under the former proposed licencing regime it was suggested that accounting firms be exempt from thelicencing requirements that would apply to us. We compete daily against such firms and each of the “Big 4”has a department that provides precisely the same services that we offer. For evidence of this fact one needlook no further than the published contractual awards of the European Bank for Reconstruction andDevelopment (EBRD)—one of our own largest clients—where we sit alongside accounting firms on the Bank’spanel of approved consultants conducting “Integrity Investigations”.

The departments of the accounting firms providing services that compete with us are not exclusively staffedby accountants nor solely by members of any recognised professional body. For us to operate under a regulatoryobligation that was not imposed upon those against whom we compete on identical matters would be unfair.

Further, the recent and highly publicised arrest of Howard Hill, a corporate investigative partner who wasnot an accountant at the accountancy firm PKF, demonstrates that an “umbrella” professional licence, such asa firm’s membership of the ACEAW, will not necessarily provide the regulatory oversight or constraints sought.

Very little of what we do can or should be described as “investigation” in the context that we understandthe Committee to mean.

Our use of the term “investigation” primarily relates to the due diligence investigations required by ourclients into their partners, counterparties, agents and acquisitions in order for these clients to discharge theirown regulatory obligations under FCPA, UK Bribery Act, Anti-Money Laundering and other compliance drivenrequirements. The work requires detailed collation and analysis of legal, commercial, media and other materialboth directly accessible from the public domain and also expressed as opinions of informed individuals whoseindependent views we seek on behalf of our clients. This work is conducted on a global basis, in full andproper compliance with the laws that prevail in the country of interest and, arguably, beyond the competentoversight of a UK licencing framework even if these actions were deemed to be required to be licenced.

It would be disproportionate to require every employee of our firm to be individually licenced to undertakeinvestigative activities.

Of the 42 fee earning staff that we have, perhaps one of them spends up to 20% of his time directing—notdoing—activities that fall within the range of actions that might be described as the activities of a private



investigator. The remainder conduct work that on a daily basis is being carried out by organisations as diverseas head-hunters, property search agents, market researchers, academic and political research groups, bond ratingagencies, corporate financiers and pollsters.

We would propose either that individuals within a firm who undertook licensable activities (however defined)be individually and specifically licenced, irrespective of the primary commercial activity of that firm, or thatfirms wishing any of their employees to conduct any of the licensable activities be licensed as a firm, again,irrespective of the primary sector within which that firm operated.

To require every individual employee of some (but not all) firms that conduct work of the type that that wecarry out would be both unfair on us and disproportionate in its reach.

Any licensing regime should recognise the spectrum of activities caught under its proposed remit.

The activities of firms such as GPW, Kroll, Control Risks, TRAG and their peers are quite different fromthe work conducted by enquiry agents, private detectives, pre-cognition agents, and skip tracers. We providemeasured due diligence in support of regulatory requirements and we provide litigation support for top legalfirms. This is not to say that we are superior to the first group I describe, but just that our work is of a differenttype and it is not likely that our clients or the public at large will be best served or protected by a “one-size-fits-all” licensing regime.

At the request of your Clerk and in recognition of the substantial workload faced by the Committee I havekept this submission as short as seemed reasonable, but my fellow directors and I remain available at any timeto meet the Committee or to answer any additional questions that you or your members may have.

May 2012

Supplementary written evidence submitted by The Surveillance Group [PI20]

Further to my attendance at the Private Investigator Licensing Seminar on 14 May, I would like to raise anumber of additional points.

Prior to the above I had just returned from a fact finding trip to the USA where I work with one of thatcountry’s largest suppliers of manned surveillance. In the USA it is necessary for Private Investigators to holda licence for each state they work within and these licences entail the passing of various competency criteriatogether with a written exam and training.

A summary of the requirements for the States of Florida, Georgia and Minnesota are shown below by wayof example which I hope the Committee find of interest:

Florida

— To conduct business in Florida must have a physical Florida business address.

— Each agency and branch office is required to have at least one licensed manager (licensed managermust be a Class “C” Licensee).

Class “C” requirements:

— At least 18 years of age.

— Must be a citizen or legal resident alien of the United States or have been granted authority towork in this country by the Department of Homeland Security, U.S. Citizenship andImmigration Services (USCIS).

— Must provide current RESIDENCE address. A PO Box is not considered a residence.

— Must pass an examination covering the provisions of Chapter 493, F.S., prior to submitting theapplication to our Division.

— Two year of LAWFULLY GAINED, VERIFIABLE, FULL-TIME Experience in one, or acombination of more than one, of the following categories Please note that no more than oneyear of college coursework/training from Category 2 can be applied toward the two-yearrequirement.

— Private Investigative work or related fields of work that provide equivalent experience or training.

— College course work related to criminal justice, criminology, or law enforcement administration, forsuccessful completion of any law-enforcement-related training received from any federal, state,county, or municipal agency.

— Employment as a Class “CC” intern. Internships is computed on a full-time, 40-hour workweekbasis. Overtime hours worked beyond 40-hour workweek cannot be used to reduce the two-yearrequirement.



Georgia— Fingerprints must be completed at an approved location in Georgia.

— A 70 hour training course must be completed.

— Once applicant (License Holder) has completed application and has been approved by Board, he/shemust then take an exam.

— Upon passing the exam, you may then submit application for Agency License.

Minnesota— Qualified Representative: Individual involved in the day to day management and supervision of the

licensed activity in a partnership or corporation. The Qualified Representative must meet allqualification standards as dictated by statue. (Must be 18 years of age, record free of felonyconvictions, Proof of Financial Responsibility at the time of application, be of good character,honesty and integrity).

— Minnesota Manager: This position is required when the license application (either partnership orcorporation) is based outside MN and plans a business location within MN to regularly conductbusiness. The candidate must meet the same experience qualifications as the QualifiedRepresentative. (Must be 18 years of age, record free of felony convictions, Proof of FinancialResponsibility at the time of application, be of good character, honesty and integrity).

— Once application is received by the Board and all documents are fully complete, they will notify youof date to appear before board in MN.

I am not proposing that licensing be undertaken on a county or regional basis but I do feel that the UKshould follow the US model. In addition I feel strongly that the UK should have either a specific new entityformed to administer to the licensing that is formed from a collective of Industry leaders and Governmentstakeholders, or indeed that an existing government department should oversee it such as the MOJ.

I am opposed to the ABI or any existing Association being given the role of licensing body since I note thatthe ABI have already created a training course in response....what is important to note is that this in responseto the work of the Committee and not something that they thought to do pre-licensing to enhance the credibilityand reputation of the industry. As one of the largest Investigatory/surveillance companies within the UK Iwould not want my staff having to undergo training which is inferior to that which they have already receivedsince they already have to pass an internationally accredited BTEC Level 4 Diploma in Advanced Surveillanceas a criteria for employment. We only work for multinational corporations, financial institutions and the PublicSector and the Contracts and frameworks that we have in place to govern our use are far more circumspectthat any licensing criteria that is likely to be introduced.

To that end I would respectfully request that future licensing is either controlled by the MOJ or anotherother government department or that an Independent Body be set up that contains key stakeholders from theIndustry, its clients and the public sector, that does not have links to existing Associations or Trade Bodies.

May 2012

Written evidence submitted by GMB [PI24]

We note with interest that the Home Affairs Committee is currently taking evidence in relation to theconduct and lack of regulation of private investigators, particularly focussing on the conduct of ex and currentpolice officers.

GMB is currently running a campaign on issues surrounding the work of the Consulting Association whoran and maintained a construction industry blacklist, which provided information to large constructioncompanies including Carillion and others about individual workers who had been placed on the list. A hugedatabase was seized last year by the Information Commissioners office which showed files dating back to theearly 1990’s, detailing in particular, when workers raised health and safety concerns on sites. There is clearevidence in the files that once the worker was “blacklisted”, they found it impossible to obtain work on thesites of the subscribing companies in the future.

There has been considerable media interest in the issues around the blacklist, and GMB is running acampaign for all those who believe they were blacklisted, to force the ICO to disclose their files. It is troublingthat the ICO is only disclosing if individuals are on the blacklist, if they write and ask, rather than activelyseeking to advise individuals that they were blacklisted. Given that the ICO has all of the National Insurancenumbers of those on the list, it is difficult to understand why, as in the phone hacking cases, the regulator isfailing to pro-actively contact those who are affected.

However aside from that, and we suspect of considerable interest to your committee, is the fact that in theevidence we have seen, it is quite clear that confidential information from Police files has been leaked to theConsulting Association. There are notes regarding presence at demonstrations, and if individuals have beenquestioned by the Police even if they have not been charged. In an early case at the employment tribunalregarding the blacklist, the judge accepted expert evidence that the only way this information could have come



onto the files was by it being leaked by the Police. Given the fact that Mr Ian Kerr, who ran the ConsultingAssociation, had very close relationships with the Police through a previous incarnation—the EconomicLeague, there are a number of important and unanswered questions as to how and why he came into possessionof this information.

Quite aside from details of workers, the blacklist also contains the names of academics, politicians andcouncillors who were perceived to be “troublemakers” within the construction industry. Once again none ofthese individuals have been notified that their details are contained in nearly 3,500 files now held by the ICO.

We would respectfully suggest that this is an area which would be of considerable interest to the committee,highlighting a murky and porous border between the police and private investigators maintaining a secret anddiscriminatory database. Given the lack of further action by the ICO, it remains an open question, how andwhy the Police involved were passing on this information to a private sector investigatory organisation.

It is now clear that thousands of people have been affected by this illegal discrimination, many of whom arestill unaware they were targeted. We would urge the committee to call evidence in this area.

May 2012

Written evidence submitted by ARLINGTONS SHARMAS solicitors [PI25]

I thank you for your letter dated 29 May and for the transcript of the hearing on 22 May 2012. I have readcarefully the full contents of your letter and the transcript and wish to inform you that I did not deal with RISCManagement Ltd and any matters relating to them would have been dealt with by Mr B B Gohil.

May 2012

Written evidence submitted by Speechly Bircham [PI27a]

Thank you for your letter of 29 May 2012 addressed to Michael Lingens, our Managing Partner.

He has asked me to reply on the firm’s behalf because I am the firm’s Director of Risk and Compliance.You have asked for a reply by midday on Friday 1 May, which I am treating as meaning 1 June.

I am grateful for the transcript, have noted Mr Schwarz’s comments and appreciate the opportunity given tous to respond to them. I hope that you understand that I am in some difficulty in providing a complete responsewith supporting documents. The files this firm retains are covered by professional privilege, they areconfidential to Mr James Ibori and it is a mandatory outcome of the Solicitors Regulation Authority Code ofConduct that the affairs of clients are kept confidential unless disclosure is required or permitted by law or theclient, in this case Mr Ibori, consents.

Nevertheless it seems plain that the Committee is in possession of legally privileged material supplied to itby Mr Schwarz, acting for Mr Bhadresh Gohil, a former partner in the law firm Arlington Sharmas. I understandthat Mr Gohil is serving a term of imprisonment for “laundering” Mr Ibori’s money and that he has been struckoff as a solicitor. Be that as it may, since that material is self-evidently in the public domain, I think it is fairto make some observations on it by reference to background facts which are similarly in the public domain.

Brief History

Bhadresh Gohil approached Mr Ian Timlin, then of this firm, in June 2006 on the basis of a personalrecommendation. Mr Timlin was introduced to Mr Gohil’s client, Mr Ibori, by Mr Gohil in July 2006. As aresult Mr Ibori instructed this firm to represent him. This was on the strict understanding that Mr Gohil wascopied in on all communications of whatsoever nature with Mr Ibori. It could not be said that Mr Gohil wasMr Timlin’s direct “report” in terms of a chain of command. However, Mr Gohil had acted as Mr Ibori’ssolicitor for a number of years, was his “most trusted adviser” and was to be copied in on any and everycommunication Mr Timlin had with his client. Being a solicitor himself, this meant and continues to mean thatthose communications are both privileged and confidential.

During the course of the relationship, Mr Timlin sent this firm’s invoices to Mr Ibori for settlement, copyingthem to Mr Gohil and in the earlier stages of the matter (before Mr Ibori was subjected to a restraint orderobtained by the Metropolitan Police) those invoices were paid from the client account of Arlington Sharmas.It is evident, therefore, that Mr Gohil was personally and intricately involved in the legal affairs of Mr Ibori.

The Instruction of RISC Management Limited (RISC)

Prior to his instruction by Mr Ibori, Mr Timlin had not ever had any involvement with RISC, or its thenprincipals Mr Knuckey and Mr Hunter. Mr Timlin and Mr Gohil met Messrs Knuckey and Hunter at RISC’soffices in Cavendish Place on 7 November 2006 and agreed that RISC should be retained by Mr Ibori.



Mr Schwarz characterises Mr Gohil’s relationship with RISC as one where Mr Gohil was “working closely”with them. Whilst literally true that creates the wrong impression. Mr Gohil was in overall charge of Mr Ibori’slegal representation in England and both Mr Timlin and RISC reported to him as well as Mr Ibori on whatsteps they were taking. On some occasions RISC reported to Mr Gohil quite separately and independently ofMr Timlin. This can be seen from the invoice entries themselves—for example the detailed entry for 5September 2007 reports:

“[CK] Advising Arlington Sharmas Solicitors re: letter received from OS Mark RADFORD re: ERINand then providing advice and guidance re: Section 72 PoCA 2002 re: mounting claim for seriousdefault on behalf of ERIN”.

As you can see, there is no mention of either Mr Timlin (who is referenced in other parts of the invoicedetail as “IT”) or this firm in this part of the narrative. Similarly, in November and December 2007 there areseveral invoice entries relating exclusively to “BG” (meaning Mr Gohil), who this firm was not representingand where again the reference “IT” does not appear:

On 13 November 2007 CK is “Reviewing further material related to the Appeal and reviewing andreporting on correspondence received from Police re: BG.” On 21 November CK is “engaged intelephone calls with BG of Arlington’s re: earlier Police search of premises”. On 22 November CKis “engaged at Arlington’s reviewing ERIN and IBORI client files on behalf of BG and providingadvice and guidance thereafter”.

On 23 November CK is “Engaged in telephone calls with BG of Arlington’s re: earlier Police searchof premises and his position re: PoCA”. On 5 December KH is “Attending Arlington SharmasSolcitors (sic) and discussing current PoCA investigation into firm and providing appropriateadvice.” Lastly on the 6 December CK is “Reviewing all material concerning search of ArlingtonSharmas Solicitors by Police and giving advice to BG and Solicitors instructed to represent the firm”.

My overall observation on Mr Schwarz’s evidence is, therefore, that his client Mr Gohil was Mr Ibori’sprimary solicitor and trusted adviser and he was at least as involved, and evidently more so, than Mr Timlinand certainly this firm in the retention and instruction of RISC and the receipt of their advice and findings.

The RISC Invoices and “Corrupt Payments” of £20,000

Mr Schwarz alleges that RISC made corrupt payments to police officers of approximately £20,000 and relieson the invoices submitted by RISC to this firm to support that contention. He also complains that the policehave delayed investigating the matter.

In 2008 the Metropolitan Police served a production order on this firm demanding, amongst other things,that this firm disclose its invoices and those of RISC. The order was fully complied with but none of theinvoices had the accompanying narratives attached (because they contained privileged information). The Policetherefore could not see beyond the fact that whilst RISC was charging an overall sum for disbursements of£19,929.69, they could not determine what that money was for.

Some of the “disbursement narrative” now in the public domain does not really assist Mr Schwarz in seekingto raise a presumption that approximately £20,000 reached individual police officers. For example, there aretwo entries dated 15 January 2007 where, cumulatively, £550 is disbursed by Knuckey and Hunter in travellingto Paris by Eurostar. Similarly on 28 August 2007 there are a series of entries (totalling £869.41) which reportsa disbursement incurred by Mr Knuckey when he flew into London from Malaga via Paris to attend a meetingwith Mr Gohil. Many other disbursements were self evidently correctly incurred.

The sole connection I have been able to make between the invoice narrative and a meeting with theMetropolitan Police is in the two RISC invoice entries of 10 September 2007 which culminate in the entry on11 September. Separately, these say:

“[CK] Meeting with confidential source and engaged in obtaining information relevant toinstruction”; “[CK] Incidental expenditure incurred with above source in restaurant and publichouse thereafter whilst obtaining information”; and “[CK] Meeting with BG at Arlington SharmasSolicitors to discuss information received the previous evening. Includes conference (sic) calls withIT and client”.

These entries, especially the last, indicate to me (and Mr Timlin has confirmed) that Mr Timlin’s involvementwas distinctly secondary to that of Mr Gohil. If it should transpire (and that is a very significant assumption)that there is something improper about the disbursement of £5,000 recorded beneath these entries, then MrGohil was as well placed as Mr Timlin to have asked what the payment was for, unless, of course, he alreadyknew that information. Mr Timlin says he did not know what the payment was for and I believe him. Whetheror not it was an improper payment is something only the Police will be able to determine, since neither myself,nor Mr Timlin, nor anyone else in this firm can say what RISC’s purchase ledger may reveal. What I canobserve, though, is that the RISC invoice details greater contact between Mr Gohil and RISC on 10 September2007 than it does with Mr Timlin.



I am conscious that there is one further invoice from RISC to this firm which contains a significant figurefor disbursements. That is the invoice dated 29 February 2008 and it includes substantial, but unparticularised,disbursements of £11,735.23. Unlike the earlier invoices there is no narrative attached, so Mr Timlin explicitlyqueried this with RISC. No response was received to his enquiry, the invoice remained on the file and was notsent to the firm’s Finance Department to be recorded as an unbilled disbursement on its purchase ledger. Thebill was therefore not included in a Speechly Bircham invoice to Mr Ibori and was never paid by him or us.

In summary it is categorically denied that either Mr Timlin or this firm knew of any payments being madeby RISC to police officers.

Disclosure of Mr Gohil’s Case to the Police

In his evidence to the Committee Mr Schwarz suggested that RISC had explained the basis of Mr Gohil’sdefence to the police and that those details had reached RISC via Mr Timlin and this firm. This allegation issimply untrue as a matter of fact; however it is also illogical. Mr Timlin was retained to represent Mr Ibori’sinterests and to demonstrate to the prosecution that because there were no proceeds of any crime (because nocrime had been committed) there was no preceding offence upon which a charge of money laundering couldbe brought. That defence, if successful, would also exonerate Mr Gohil. The interest of both individuals wasperfectly aligned—Mr Ibori could have no possible interest in helping the Police prosecute Mr Gohil.

Conclusion

I hope the above gives the Committee at least some of the information it seeks in connection with thismatter. I am concerned that the Committee is being given an incorrect impression of events by Mr Schwarzand I am equally concerned that it is finding itself drawn into an investigation of an individual case which isitself the subject of a police investigation. This firm has throughout indicated to the Police its willingness tocooperate with their enquiries. The Police have recently sought our help and have been grateful to receive it.

The Committee’s interest is in investigating the need for regulation within the private investigation industry.I tend to agree with the overall view that some form of regulation of private investigators is both necessaryand desirable and I look forward to reading the Committee’s conclusions on this issue once reached.

June 2012

Written evidence submitted by Speechly Bircham [PI27b]

Thank you for your letter of 1 June 2012, which reached me on Friday 8 June.

The response to your first question has two elements to it. The HASC’s initial invitation was sent to thisfirm within an e-mail timed at 11:05am on 5 April 2012. It was addressed to [email protected] witha copy to one Sophia Headland in the firm’s marketing department. The invitation itself was expressed in verygeneral terms inviting someone (which could have been anyone) from the firm to attend the HASC to answerquestions about private investigators. As you will note from what I say below, the firm does not use privateinvestigators very often and it was considered that there would be any number of other firms who would bemuch better placed to assist the HASC.

What is striking (with the benefit of hindsight) is that within a few hours of the HASC’s email of 5 April,Mr Schwarz of Bindmans also e-mailed the firm, at 3.44pm. By contrast, his e-mail was sent to a long list ofthe firm’s partners and employees, including partners in Corporate Finance, Property Litigation, Employment,Insolvency, Real Estate as well as generically “Reception” and “Recruitment”. As such it came to myattention quickly.

Mr Schwarz’s email was aggressive and demanding, which sometimes happens when a lawyer asks forsomething to which he is plainly not entitled. Complying with those demands (and those contained in a letterwhich had preceded it) would have put both myself and this firm, amongst other things, in breach of Outcome(4.1) of the 2011 Code of Conduct. Mr Schwarz either knew or certainly ought to have known that.

You have quite correctly brought your past relationship with Bindmans to the attention of the HASC, but inthe circumstances it would have been inappropriate for me (or anyone else from my firm) indirectly to renderMr Schwarz the assistance he sought by giving evidence to the HASC where there was a real risk that theIbori case might be touched upon. It would be wholly improper for the HASC to be used in this way, as youcan appreciate.

In summary, therefore, the HASC’s request was politely declined because (i) the firm did not feel particularlywell placed to assist it with private investigators generally and (ii) the firm did not wish to see the HASC beingused to investigate a specific case in which the police were already involved.



I now turn to the second part of your letter and reply to your numbered points using the same numberingas you:

1. There is a small element of crossover in the work private investigators undertake, as comparedwith lawyers. The internet is, of course, open to anyone to use. The Land Registry is nowpublic, as is Companies House and the Register of County Court judgments. The principal useof private investigators is, from my experience and from this firm’s own records, to serveimportant documents on individuals who often do not particularly wish to receive them.Sometimes lawyers undertake this work in-house but often it is best left to experts particularlywhere the intended recipient of a document may be considered to have a disposition towardsphysical violence if upset.

2. I can confirm that by far the greater majority of this firm’s use of private investigators over thelast three years has been to conduct credit checks (mainly against the tenants of propertycompanies we represent) or to serve documents. Only two cases have involved an expense inexcess of £2,000. In the context of a 90 partner firm, therefore, the use of investigators isfairly infrequent.

3. Most private investigators are engaged on the basis of personal recommendations by othermembers of the firm who have used them successfully. As has already been outlined to theHASC by others in evidence, a number of private investigation firms are staffed by formerpolice officers. In my experience a number of them are also former court bailiffs. They areusually very well aware of what is legally permissible or impermissible by virtue of theirexperience. There are no real “checks” one can make into “probity”—unlike solicitors who havean SRA disciplinary record which is open to the public, private investigators are unregulated.

4. As indicated in my earlier letter, I tend to agree with the overall view that some form ofregulation of private investigators is both necessary and desirable. The critical component ofsuch regulation would be a proper “Code of Conduct” and a means of enforcing it in relationto those who break it. Interestingly perhaps, the Code of Conduct for Solicitors, one of themost highly regulated professions in England and Wales, contains no guidance on the use ofprivate investigators but it could easily be integrated with a Code for Private Investigators toensure that both sides were in no doubt as to what is (or is not) permissible in any given setof circumstances.

I trust this information is of further assistance to you.

June 2012

Written evidence submitted by Jane Furniss, the IPCC [PI28]

I am writing to you following evidence given to your Committee yesterday by Mr Mike Schwarz in relationto allegations of police corruption.

The IPCC is aware of these allegations and they are currently the subject of a supervised investigation. Itmay be helpful if I provide some further background for you, In August 2011, the Metropolitan Police Service(MPS) were sent an anonymous letter which outlined allegations of police corruption, namely that illegalpayments had been made by a firm of private investigators to MPS officers. A copy of this letter was also sentto the IPCC. On receipt of the letter, our Deputy Chair and Commissioner with responsibility for the MPS,tasked an IPCC senior investigator with making some preliminary enquiries. We were satisfied with theoutcome of these enquiries and left the matter with the MPS to refer as appropriate.

On 14 October 2011, the MPS formally referred the allegations of corruption to the IPCC. On the same daywe decided to supervise the investigation. This mode of investigation was considered appropriate for a numberof reasons but most notably because the allegations involved members of the public (over whom we have nopowers) as well as police officers. This is a complex case which remains ongoing and you will appreciate thatthere are limitations as to the detail I can offer in writing. We have provided robust supervision of thisinvestigation throughout and updates have been provided and sought from the MPS on a regular basis. Allsupervised investigations are kept under review and the level of IPCC involvement can be re-determined atany stage based on information and evidence available to us. We remain confident that supervision is the rightlevel of oversight but will continue to keep this under review as the investigation progresses.

I hope this is helpful. Please do not hesitate to get in touch if you require any further information.

May 2012



Written evidence submitted by Mr Bhadresh Gohil [PI29]

Introduction

This submission is intended to provide the Home Affairs Select Committee with salient information and firsthand experience of how I have been “affected” by the work of a private detective agency. For the avoidanceof doubt, I am not seeking for an investigation into my case, but an examination by The Committee of someof the documents/activity that will help focus The Home Affairs Committees attention to areas of concern,which demonstrate the critical and urgent need for proper regulation. At the same time the purpose of thesesubmissions are to identify a range of issues, which have recently appeared in the media that appear to be thesubject of police investigations surrounding the activities of a private detective agency. RISC ManagementLimited of 3rd Floor, 7–8 Conduit Street, London, W1S 2XF. It may be that some of these issues may be moresuitable for the Leveson Inquiry to consider, as there is clearly an overlap. More specifically, submissionscover the:

1. Proper role of a Private Detective Agency.

2. Relationship between Private Detective Agencies and Police Officers.

3. Issue of Legal Confidentiality and Legally Privileged Material.

4. Dissemination of Legally Privileged Material.

5. Use of Private Detective Agencies as Informants.

I would kindly ask that The Home Affairs Select Committee consider my particular case in detail as itidentifies the specific areas mentioned above which will be of considerable concern and will help to identifywhere a regulatory framework is required. The case will portray numerous examples of illegality and unethicalconduct but fundamentally demonstrate a wide-scale abuse of process and power. There is very little recoursefor remedy and accountability.

Summary Background

I was formally a Solicitor and Partner in a Central London based law practice—Arlingtons Sharmas Solicitorsof 6 Arlington Street, London, SW1A 1RE. I was the head of the Commercial department and the anti-moneylaundering officer for the firm. I was however recently convicted by a jury for the Crown Court on charges ofMoney Laundering on behalf of a former client, James Ibori. It was alleged that I had failed to carry out therequired due diligence on funds received by my firm. The former client’s funds which came from banks werealleged to have been tainted although it has never been proven and that the funds were actually proceeds ofcrime. The case against me was based on “inferences”. No criminality of predicate crime was presented. Thefunds received by the firm were utilised for routine payments and process by way of several transparenttransactions all fully documented. For my part I believe that I had conducted the required due diligence inaccordance with the prescribed statutory requirements. The Law firm ASS, whose senior partner is VijaySharma, married to Baroness Usha Prashar CBE, a member of the Chilcot Committee, appointed the privatedetective agency—RISC Management Limited, to review the firm’s files and, in particular, those of JamesIbori, and its compliance issues. It was Vijay Sharma who principally handled the funds in question, as he wasin control of the firm’s banking and finances throughout the period. Vijay Sharma was also the key prosecutionwitness and would have been able to confirm that the firm had complied with the compliance requirements andprocedures. However, surprisingly, Vijay Sharma at the last minute was withdrawn as a key witness on thebasis that he would not be a witness of truth. These actions were clearly deliberate and questionable.

My professional body, the Solicitors Regulatory Authority cleared my actions, however, a jury found meguilty. I gave no evidence, as my highly experienced legal team believed that I had no case to answer.

Factual Circumstances

It was during this Solicitor-client relationship which commenced in 2005 and lasted until June 2007 that Iwas affected by “a Private Detective Agency”—RISC Management Limited. My former client was James Ibori,the former Governor of Delta State, Nigeria. My firm was instructed to undertake several routine transactions.The client, Ibori was however, unknown to me, under investigation by the British Police. City lawyers, SpeechlyBircham were appointed by Ibori to represent his interests and to deal with the UK investigations. SpeechlyBircham in turn appointed the Private Detective Agency—RISC Management Limited to assist and to providelitigation support. RISC Management and its Directors became pivotal within the Ibori defence team,participating in virtually all aspects of the defence case from routine daily conference calls to reviewingdocumentation and participating in meetings with QC’s and other legal representatives. They were privy tothe entire defence case, plans, documentation and strategy. Whatever they were participating in was clearlylegally privileged.

Over the past few months, it is apparent from media exposes that RISC Management Limited has been thesubject of an IPCC supervised Directorate of Professional Standards anti-corruption inquiry. According toarticles which first appeared in the London Evening Standard on 31 October 2011. Senior journalist Tom



Harper reported that the £20,000 of bribes had been paid by RISC Management Limited to officers in theMetropolitan Police and in particular officers in this case. Soon thereafter, other details of the Private DetectiveAgency’s misconduct started appearing. These included:

1. Telephone/Email interceptions.

2. Localised bugging/debugging.

3. Record tracing.

4. Bank account details.

5. Security protection.

6. Tax files being obtained.

7. DVLA records being obtained.

8. Police National records and details.

9. More importantly, any other confidential information which could be useful to people.

I was stunned by these revelations and the gravity of the misconduct and was unaware of these matters andwill now drill The Home Affairs Select Committee attention to the various articles that have since appearedwhich set out these issues in greater detail. These articles seem to highlight very serious issues surroundingRISC Management Limited and their Directors, Keith Hunter and Cliff Knuckey. I have attached some of theseand fully accept that they may not be entirely accurate but they do go in considerable detail in many cases, forexample: The interception of communication (Phone Hacking) by RISC of Assistant Commissioner CressidaDick and the former Minister for Africa, Lord Malloch-Brown.

Can I suggest that if possible, The Home Affairs Select Committee obtain details of the original complaintsmade to the Deputy Assistant Commissioner Sue Akers and the former Commissioner of Police—Sir PaulStephenson in order to obtain a clear position on the allegations/complaints. At the same time same time theIPCC are supervising an investigation by the Directorate of Professional Standards into these allegations andmay be possible to obtain specific details around RISC Management Limited’s misconduct. The media reportsuggests that the magnitude is considerable. It seems to extend to a number of other cases handled by RISCManagement Limited. The company has been described as a “nest of corruption”.

Specific Matters

Dealing specifically with the issues that have affected me are summarised as follows:

1. I have seen a number of invoices issued by RISC Management to Speechly Bircham between2007 and 2008. These invoices show a number of cash payments being made to confidentialsources who are believed to be case detectives. Case information appears to have beenexchanged. I was never aware of this activity. I openly shared much of my clients and personalinformation with RISC Management Limited’s Directors I believed were giving litigationsupport to the defence team.

2. At the same time, I had appointed RISC Management Limited to undertake a detailed reviewof the Arlingtons Sharmas Solicitors files to ensure that the work undertaken were compliantwith the Money Laundering requirements. RISC Management Limited undertook a detailedreview of these files and documents. The RISC Management fee notes can confirm the workthat had been undertaken and the work and a statement of Cliff Knuckey (attached). The CliffKnuckey statement confirms that he saw there was nothing wrong with what I had done andprovided a clearance note but by now he had full access to the Arlingtons Sharmas Solicitorsfiles and information. And having had so, he appears to have passed much of the informationback to the case officers, which was unknown to me.

3. I was not aware that confidential client’s information or my personal information was beingdiscussed with the case officers. The Private Detective Agency were acting as informantswithout any regard to the fact that they were integral to the defence and this would have beenknown to the case officers. It is now clear that sensitive case information and material that wasthe subject of Legal Professional Privilege was repeatedly disseminated. There was a wholesalebreach of the sanctity of the Solicitor-client relationship. The recent revelations raise immediateconcerns of the confidentiality of the material between myself in my capacity of a Solicitor,and the RISC Directors who were privy to sensitive information. It raises the very fundamentalconfidential issues about the limit of acceptable and appropriate relationships, the sanctity oflegal—lawyer client relationship and the integrity of the criminal justice system. I believe thatthe unauthorised disclosure of defence material has now prejudiced my case which was builtentirely of the evidence of the Police Officers in the case. I say this because the case againstme was based on inferences and in the absence of any predicate crime.

The inappropriate relationships between Private Detective Agency’s and officers cannot be in the interest ofjustice. In fact, my case demonstrates how such relationships can create a breach of trust at best or at worst,an absolute failure of justice as I believe it is what I experienced. As legal professionals are bound by thesacrosanct duties of confidentiality and the Private Detective Agencies are able to share the inner most detailswith Police Officers. This collusion can not be accepted and has to be regulated.



This will not be the first time RISC Management Limited and its Directors have come under scrutiny. In2006, Michael Gillard, a well known and respected journalist working with The Times published an article inwhich RISC Management Limited were accused to be trading in confidential Police and Home Officeinformation. In that matter, Hunter was named as having bribed an officer who at the time was working in theMetropolitan Police’s Extradition Unit, DS Gary Flood. In that article, under the heading “Detectives accusedof taking bribes from Russian Exiles”, there were strong grounds to suspect he had abused his position as aPolice Officer to receive £20,000 in bribes from Russian Exiles. The Exiles were in fact all clients of RISCManagement Limited.

As the matter is subject to a live IPCC investigation, it would be prudent to keep the matter away from thepublic domain for the time being to insure that the integrity of the investigation is not compromised.

Summary

This case highlights numerous public and private concerns regarding the activities of Private DetectiveAgencies. The investigators in this particular case did breach all acceptable bounds of ethics. The currentinvestigation by the IPCC together with the Met’s Directorate Professional Standards continues. Theinvestigations seem to surround the allegations of bribery, corruption… As the Home Affairs Select Committeecan see, the activities of this agency are considerable and clearly underlined the necessity in need of regulation.

January 2012

Printed in the United Kingdom by The Stationery Office Limited07/2012 021296 19585

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