The lawsuits that follow an investigation
Several kinds of private litigation tend to trail a government inquiry. Whistleblowers can file suits on the government's behalf under the False Claims Act, and those cases are filed under seal while the government decides whether to join. Public companies can face shareholder suits after disclosing an investigation, along with demands that the board look into its own conduct. Customers, competitors, and business partners may bring claims based on the same conduct the government is examining. Each case moves on its own schedule, and courts do not always pause one to wait for another. A whistleblower case can stay sealed for a long time, so a company may learn of it only after the government's inquiry is well advanced.
When one case can hurt another
Positions taken in one proceeding can be used in the others. Documents produced to the government may later be sought by private plaintiffs, and privilege can be lost if materials are shared too broadly. An individual who invokes the Fifth Amendment in a civil deposition is protected from self-incrimination, but in civil cases the other side can sometimes ask the factfinder to draw a negative inference from the silence. Admissions in a settlement with the government can become evidence in private litigation. For these reasons, the same facts usually call for a coordinated team with a single view of the whole picture.
Coordinating from the start
Early on, we map each proceeding that exists or is likely, including its deadlines, its parties, and the insurance that may respond. Directors and officers policies often cover defense costs in investigations and related suits, but notice requirements and exclusions vary. We consider whether a civil case should be stayed while the investigation continues and how discovery requests should be answered in the meantime. We also look at what disclosures a company has made or must make. For individuals, we check whether their interests differ from the company's and whether indemnification or advancement of legal fees is available.
