Bribery and corruption: complacency is not an option

16 October 2013

The Bribery Act 2010, introduced in July 2011, makes it an offence to bribe another person, receive a bribe or to bribe a foreign public official.

Background

The Bribery Act 2010, introduced in July 2011, makes it an offence to bribe another person, receive a bribe or to bribe a foreign public official.

An offence is committed if it occurs in the UK or would constitute an offence had it been carried out in the UK and the person has a close connection with the UK. A person has a close connection with the UK if they are a British citizen or passport holder, resident of the UK, a body corporate under the law of the UK or a Scottish partnership.

The Bribery Act also states that it is an offence for a commercial organisation not to prevent bribery. An offence occurs if the person associated with the organisation bribes another person with the intention of obtaining or retaining business or business advantage for the organisation. That offence can be committed in the UK and overseas.

Individuals face up to ten years in prison and companies risk unlimited fines if they are convicted of breaching the Act.

There is a defence available to an organisation if the organisation has adequate procedures in place designed to prevent bribery. Guidance issued by the Ministry of Justice suggests that adequate procedures include the provision of appropriate policies and procedures (which are implemented), leadership from the top and regular risk assessments.

Why should you be concerned?

Criminal prosecution

It appears we are now entering a new era of enforcement. With the establishment of the National Crime Agency (NCA), the Home Office has gone on record to confirm that "we intend to produce new systems for reporting corruption and the NCA will lead and co-ordinate work to investigate corruption in the UK".

Can we expect to see more prosecutions? Probably.

This summer the Serious Fraud Office (SFO) brought its first charges against individuals accused of violating the UK Bribery Act. While there is still an absence of any corporate prosecutions under the Bribery Act, the SFO has indicated that it has two live investigations of companies suspected to have breached the Act.

Criminal prosecution is not the only concern. Leaving aside the reputational damage, where does this leave you when dealing with your employees?

Whistleblowing claims

The nature of these practices clearly raises the spectre of the whistleblower - that individual who, for whatever reason, is prepared to report perceived wrongdoing.

Whistleblowers have special protection - there is no requirement for qualifying service in the event that the employee is dismissed, compensation is unlimited and remedies are also available for detriment suffered short of dismissal.

On the matter of unlimited compensation be aware that the employment tribunals have recently awarded over £3.8 million in compensation to just four claimants.

Amendments to the whistleblowing legislation introduced in relation to protected disclosures made after 25 June 2013 have removed the requirement of good faith. This may encourage employees to blow the whistle, particularly if there is a financial or other incentive attached to doing so.

Since 25 June 2013, the focus is on the message rather than the messenger. The 'less than altruistic' motives of a whistleblower are no longer a bar to protection.

Whistleblowers also now have protection from ill treatment by work colleagues with employers being fixed with vicarious liability for the actions of staff/officers who may seek to "punish" or "victimise" the whistleblower.

Not only could the organisation be liable but also the individual who commits the victimisation could be held to account by an employment tribunal with damages awarded against all involved.

In addition to the above, further strengthening of whistleblower protection is under active consideration. In particular, the government is considering the suggestion that whistleblowers should be incentivised to blow the whistle, including financial incentives as in the US.

These changes, with more to come, increase the potential for greater reporting in this area. Complacency is not an option.


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