Hiring a private investigator for a private investigation is an important transaction and one that needs to be undertaken with much care, as when hiring other professional service providers. Engaging the services of a private investigation firm involves several issues that must be clearly understood by the client. Proceeding with care and understanding the risks will make the process of hiring and working with private investigators a more effective and useful endeavor.
The laws, customs and practices in each jurisdiction may vary greatly when conducting a private investigation. For instance, it is actually unlawful to conduct a private investigation in China, Lebanon and many other nations. There is potential exposure to the private investigator for violation of the laws and potentially adverse spillover to the underlying client who orders the investigation. Private citizens must consider these issues when interviewing a private investigator business. In addition, the means and methods of conducting a private investigation vary greatly. If the investigator is not experienced and knowledgeable of the relevant issues, it may turn out that the information gathered by the private investigator may have limited or no value to the client once it is secured. For instance, where a private investigation company conducts an asset search and is able to obtain evidence of certain off shore bank accounts, this may be a great lead or usable as leverage by the client or their lawyer in private negotiations, but it is very likely that a judge or court magistrate in a pending lawsuit may bar the private investigator from introduction of such evidence.
Outlined below are four essentials items to consider when conducting a private investigation or hiring a private investigator:
1. Be sure the Private Investigator is Licensed
In most U.S. States and many countries throughout the world, the law requires that private investigators be licensed. The private investigator must register their organization with the Department of State or other governmental authority and usually must post a bond and demonstrate that they have the proper insurances. In addition to the requirements for bonding and insurance, it is typically required that the principal investigator for an investigation company, or the individual private investigator, if the investigator operates independently, pass a rigorous written test; that (s)he have a minimum number years of experience performing investigations and that the principals and investigators have a full background check, including criminal history, references, and prior employment. Verifying that a private investigator or private investigations company is properly licensed can usually be checked on the Internet or by phoning the appropriate governmental authority and should be done before the private investigation commences.
2. Be sure the Private Investigation Company or Private Investigator is established and reputable
In addition to licensure, it is important to verify the reputation, track record, integrity and history of the private investigation firm or private investigator. This can be done by requesting at least five to ten references of past clients of the private investigator or private investigation firm. When you talk to the references, find out how long ago they were a client and what fees the private investigation firm charged. Find out the best and worst things the past client has to say about the private investigation company and any particular private investigator they may have dealt with.
In addition to reference verification, check to see if the company is registered with Dun & Bradstreet or another business research firm. Verify that the private investigations company has been in business as long as it stated to you and also verify who the principals of the company are and the history of the private investigations company.
Finally, check with the Better Business Bureau to see if there are any complaints against the private investigator or investigations firm. Ask the private investigator or private investigations company about any past complaints or other adverse information. The private investigator should be willing answer the questions you pose.
3. Be sure to get a Letter of Engagement and Scope of Work
Any reputable private investigation firm should supply you with a proposed letter of engagement. This agreement should spell out the precise terms and conditions of the proposed assignment The agreement should cover, among other things, the hourly rate for each private investigator, an estimate of the total cost of the assignment, the time frame for securing the results, the names of the specific personnel assigned to work on the project, points of contact within the company, the list of objectives and the overall goals of the assignment.
In many jurisdictions, the communication between the client and the private investigator, or the private investigator and the client’s lawyer, may actually be protected by the attorney-client privilege if an attorney is involved in the matter. Some of the work secured during the private investigation may also be protected under the attorney work product doctrine. The letter of agreement should delineate whether or not the work is confidential and/or privileged.
Lastly, make sure the agreement covers refunds, invoicing and all other administrative issues.
The letter of engagement agreement should be both a road map as well as a safety valve for the client and the private investigation firm, and must be fully understood and agreed upon by all parties before the assignment commences. Of course, it is perfectly fine for the client or his attorney to review the agreement and suggest edits. The key is that the client is knowledgeable and comfortable before signing.
4. Be sure to understand the legal and practical risks of conducting a private investigation
Just as with any important undertaking, conducting a private investigation brings with it certain risks and issues that must be identified and understood by the potential client. Most of them are fairly straight forward and not of great concern. For instance, when hiring a private investigator, you must know the limitations of any private investigation firm in terms of the laws of the State and Federal government. The Fair Credit Reporting Act, the Financial Disclosure Act, the Trading with the Enemies Act, the Polygraph Act, anti-wire tapping laws and many state privacy laws may be implicated when conducting private investigations.
The private investigator should be familiar with these laws and rules and should be able to explain the significance of them as they relate to your particular case. For instance, there are several federal laws that bar tape recording conversations. You want to be sure that you are not hiring a private investigator to break the law as there could possibly be exposure to the end user client in terms of legal and reputational risk.
For further information on this and other related issues, you can email Robert Seiden at rseiden@fortressglobal.com.
Robert W. Seiden is the President of Fortress Global Investigations & Security, a well-established firm with offices throughout the world. Seiden is a former prosecutor, former litigator, licensed lawyer and private investigator, as well as a former technologist, who has personally conducted and/or overseen thousands of investigative and security assignments throughout the world.
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