Assessing the potential exposure

It is advisable to set up a specific working group to assess the potential exposure from the outset, so that mitigation strategies can be developed and implemented as soon as possible.

That team should consider the following areas of possible exposure:

  • regulatory exposure: actions that the regulator can take, such as imposing fines, pursuing criminal prosecutions, sanctioning directors or other officers of the company, and/or ordering the cessation of certain business practices
  • litigation exposure: in parallel to regulatory investigations, third parties are increasingly launching claims for compensation as a result of infringing conduct. For example, customers who have purchased products that have been subject to price-fixing are increasingly claiming compensation for the increased prices they may have paid by way of follow-on civil claims
  • reputational exposure: it is important to consider reputational risks from the outset of any investigation

The potential exposure in each of these areas will depend on a number of factors, including the nature of the alleged infringement; whether the investigation targets the company, specific employees or both; the regulator(s) conducting the investigation; the duration of any infringement; the geographic scope of the alleged infringement; and the impact of the infringement.