Distance Diligence: What happens to public records during Covid-19?
Note: I'd like to begin by saying that I hope you and your families are safe and well. These are extraordinarily challenging times. We are being called to care for our communities in ways that are new and difficult. Stay home, be kind, and be gentle with yourselves.
Public records are the foundation of good due diligence work around the world. Access has always varied from country to country, and even within countries, but as with so many other parts of our lives, Covid-19 is changing what is possible when it comes to research in government records and databases.
Ten days ago, I was wrapping up a due diligence project for a long-time client when I got a message from a local partner in West Africa who was supporting the project: They were unable to access documents from the relevant country's company registry because the government was implementing a trial lock-down to test their response to Covid-19.
A few days ago, as non-essential government functions began to shut down around the world, I reached out to colleagues via email and on LinkedIn to find out what they were seeing. Some of their responses:
From a firm that focuses on accessing non-digital court records in the US: "A lot of courts are currently closed. A few could still be open to the public but it is extremely hit or miss. A few of our researchers are able to use their contacts in the courts to get work done as some courts still have personnel working though we can’t go in."
From a Lexis Nexis representative: "My feeling is that if it’s a physical document that has to be processed, it won’t be processed presuming the jurisdiction is closed due to Covid-19 – nobody is there to process it, nobody is allowed to leave their homes to deliver it, etc. Meaning – no public record update in that jurisdiction. If it’s electronic documents, though, I imagine that info is being processed as expected (presuming clerks, etc., can work from home or are required to work as an essential employee)."
From Mexico: "Most legal records databases are not going to be updated for at least a couple of months." And, "Public Registry record offices are closing/closed in Mexico - a problem where the process of searching and retrieving registry records (corporate and real estate) is largely a manual process."
From Massachusetts: "Massachusetts Courts are pretty much shutdown except for emergency hearings. Although a clerk in a District Court was willing to conduct a search over the phone yesterday."
From Canada: "At this point, the only search that we’re unable to complete is for criminal matters through the courts in Ontario. Everything else remains available, though the situation is 'fluid' to say the least."
So, what to do?
My current operating assessment is that digital records prior to March are as reliable as ever (which is not to say comprehensive or perfect), but I do think that there will be significant delays in uploading information to digital resources like Lexis, online court systems, and company registries for the foreseeable future. In jurisdictions where fewer records are available electronically, I anticipate that on-site searches will be difficult or impossible in the near-term.
As a result of all this, I've started adding cautionary language to our proposals and reports (see example at right). I'm not a lawyer, and this is not legal advice, but my fellow investigators and researchers who rely on public records may want to consider doing the same.
I'm also doing extra work before accepting a project to confirm access to certain records, rather than relying on my prior experience in those jurisdictions, and to manage client expectations going in. In countries where I work with local partners, I'm making sure to let them know that I don't want them to put themselves or their families at risk by leaving home to access records.
Covid-19 will pass eventually. In the meantime, it's up to each of us to take care of each other, our local partners, and our clients while protecting our communities as best we can.
What are you seeing?
Let me know what you're seeing out there, and how you're adjusting. If you'd like to talk about due diligence and/or the cannabis industry, feel free to schedule a time with me for a call by clicking here.