Criminology Research Council grant ; (13/81)
Over the past 25 years Special investigations, or 'Inspections' as they were originally called, have been used extensively in the enforcement of company law. The procedure has been used increasingly and in some jurisdictions this increase has resulted, even in a period of cut-backs and public spending austerity, to an unprecedented committal of resources. Despite the frequency of the use and the prominence which the procedure has gained, little attention has been paid to the provisions by commentators of company law. In addition, little factual material is available on the incidence of the appointment of inspectors and the consequences of their investigations.
From earlier research it was apparent that the objectives attributed to the Special investigation procedure and the expectations of the procedure held by inspectors, commentators and politicians were not consistent with the historical philosophy underlying the provisions. But specifically the actual use of the procedure and the result of investigations did not always fit comfortably with either the currently attributed or historical objectives and philosophies. In short, the machinery was not always being used for the purpose for which it was designed and not surprisingly the safeguards built into it often fell short of the desirable standard when measured against the actual use or purpose.
With this background the object of the study then was to collect, by the use of an attitudinal survey, data on what the commercial community perceived to be the purpose of the procedure; when it should be used and how effective it was. Secondly, it sought to compare and contrast those views with the historical philosophies behind the provisions and the actual use made of the procedure.
Respondents saw the procedure's underlying purposes as being first the protection of shareholders, secondly, the discovery of fraud and misfeasance and the protection of parties whose interest are most directly aligned to the companies' fortunes. There was general support for the provisions despite the fact that it was believed that the use of the procedure is sometimes abused and that only one purpose - the discovery or fraud and misfeasance - was being fulfilled by the actual use of the procedure.
Respondents also were less faint of heart than most commentators when considering the impact of the appointment of an inspector.
The conclusion that can be drawn from the study is that the actual use of the procedure varies considerably from historic objectives and philosophies but the commercial community, that is those most likely to be affected in some way by or involved in a Special Investigation, although sceptical as to the utility served in the past by the procedure, support its continued existence. There is general confidence in the use made of the procedure and in the inspectors appointed but what is lacking is a decisiveness in the making of appointments and publication of reports. Respondents appear to be prepared to suffer the inconveniences, the possible ,spin-off' and via the State to pay the monetary costs of such investigations provided that there is greater accountability through timely publication of reports and the outcome of the investigations. State involvement in the affairs of 'private bubbles', far from being opposed, is supported, and responses indicated that a more adventurous approach by Ministers would be tolerated.