The Bribery Act 2010 ("the Act") came into force on 1 July 2011.
In this article, to celebrate its 10 year anniversary, we have provided a summary of the Act and the offences, as well as some practical tips for businesses seeking to ensure they don't fall foul of its requirements.
Section 7 of the Act – namely the corporate offence of "failure of a commercial organisation to prevent bribery" – concerns businesses most. That offence can be successfully defended if a business can demonstrate that it has in place "adequate procedures" which are designed to prevent bribery from occurring.
Despite the Act being in force for a decade, there is little case law to guide us on what constitutes "adequate procedures". A case did touch on the subject in 2018 (R v Skansen Interiors Limited). Skansen involved a relatively small refurbishment company and the payment of bribes to win a contract. Skansen was charged under section 7 and put forward a defence that it had in place adequate procedures to prevent bribery. It argued that its procedures, which were limited, were proportionate for a small company which only operated in the UK. This defence was rejected and Skansen was found guilty (albeit an absolute discharge was ordered as it had no assets at that time).
Adequate anti-bribery and corruption procedures are therefore required for all companies of any size and even if they only operate within the UK.
Deferred Prosecution Agreements (DPAs), introduced in 2014, may have played a limited part in reducing the number of cases where an organisation's procedures to combat bribery have been inadequate. Under a DPA, a prosecutor charges a business with a criminal offence but, assuming the business co-operates in the proceedings, that charge is automatically suspended if the DPA is approved by a judge. The agreement allows a prosecution to be suspended for a defined period provided the organisation meets certain specified conditions (including paying a penalty or compensation). The DPA therefore allows the business to make amends without conviction and is a means of avoiding lengthy and costly trials.
Although the courts may have been quiet, it would clearly be unwise for organisations to take any comfort from that given the potential consequences that can arise from an organisation being involved in actual or suspected bribery. Organisations are therefore strongly advised to ensure they have in place adequate procedures to avoid action being taken which could result in prosecution or a DPA.
Summary of the Act
Section 1 - General bribery offence.
Section 6 - Bribery of a foreign public official.
Section 7 - Corporate offence. Defence available if "adequate procedures" in place designed to prevent bribery from occurring.
Section 12 - Extra-territorial application of the Act.
Section 14 - Liability of a senior officer.
Penalties - Individual - up to 10 years in prison and unlimited fine. Commercial organisation - unlimited fine.
The Ministry of Justice has provided guidance as to what would comprise "adequate procedures". This includes ensuring that:
- the organisation's procedures to prevent bribery by persons associated with it are proportionate to the bribery risks it faces and to the nature, scale and complexity of the organisation's activities. Such procedures must be clear, practical, accessible, effectively implemented and enforced;
- top-level management of the organisation are committed to preventing bribery by persons associated with it. They should foster a culture within the organisation in which bribery is never accepted;
- the organisation assesses the nature and extent of its exposure to potential internal and external risks to bribery on its behalf by persons associated with it. The assessment ought to be periodic, informed and documented;
- the organisation applies due diligence procedures, taking a proportionate and risk based approach, in respect to persons who perform or will perform services on behalf of the organisation;
- the organisation seeks to ensure that its bribery prevention policies and procedures are embedded and understood throughout its organisation through internal and external communications, including training, that is proportionate to the risks it faces; and
- the organisation monitors and reviews procedures designed to prevent bribery by persons associated with it and makes improvements where necessary.
Practical tips to help prevent bribery
- Businesses should at the very least:
- Explicitly prohibit bribery in any form whether direct or indirect and by or for the organisation; and
- Commit to implementing systems to counter bribery.
- Businesses should also consider carrying out the following, if any or all of them may be necessary for the business concerned to be able to say they have measures in place proportionate to the bribery risk it faces:
- Prepare a statement of values and a code of conduct;
- Put in place detailed policies and procedures, including, for example, policies on gifts, hospitality, facilitation payments and vetting outside agents/advisers;
- Implement risk management procedures, for example, regular auditing of compliance;
- Implement and keep up to date with training and guidance for all employees and contractors/consultants;
- Ensure internal controls are put in place;
- Ensure the ABC policies and procedures are regularly reviewed;
- Put in place and notify staff of their whistleblowing procedures to promote reporting of any suspicions;
- Consider including standard ABC clauses in their commercial contracts;
- Carry out due diligence before entering into arrangements with other parties; and
- Ensure that appropriate checks are carried out during the processing of payments.
How can we help?
We have extensive experience in drafting and conducting risk assessments, drafting anti-bribery and corruption ("ABC") policies and providing training to staff/third parties on ABC issues.We also regularly provide advice on specific ABC concerns faced by businesses.
We would be happy to help with any queries or concerns you may have – please get in touch with Helen Davenport or Kate Robards.