Bribery Act 2010
MAY 2010
The Bribery Act 2010 (“the Act”) has created a new, comprehensive regime of bribery offences. The Act overhauls and consolidates the confusing and outdated old common law and statutory offences dating back to 1889 and creates four offences; namely the general offences of paying and receiving bribes, the bribery of foreign officials and the new corporate offence of failing to prevent bribery.
The new corporate offence of failing to prevent bribery is likely to be of utmost concern to companies and partnerships. If a company is found guilty of this offence, it will potentially be liable to an unlimited fine.
The offence is committed by a company or partnership where a person associated with that company or partnership bribes another person in order to obtain or retain either business or a business advantage for the company or partnership.
The definition of an “associated person” is very broad. It covers employees, agents, intermediaries and introducers. It has been suggested that a subsidiary may even be regarded as associated with its corporate shareholders. It does not matter whether the company exercised control over the associated person: the performance of a single transaction on behalf of a company will be enough to trigger a company’s liability.
The offence is a strict liability offence, which means that there is no requirement for the prosecution to prove that the company made the bribe in bad faith or was negligent. It need only prove that the bribe was made. However, the company may have a defence if it can show that it had adequate procedures in place designed to prevent bribery. Currently, there is no guidance as to what “adequate procedures” actually means and we will have to wait for guidance from the courts in interpreting this. The Government has also indicated that it will issue guidance in October 2010.
In addition, a senior officer of a company may face personal criminal liability if he consents to or connives in the commission of a bribery offence. Senior officers include directors, managers and company secretaries. If a senior officer is convicted of this offence, he may be liable to imprisonment for a maximum of ten years and/or a fine. A director convicted of a bribery offence could also face up to 15 years disqualification from holding a directorship.
Although we have not yet seen how the bribery offences will be dealt with by the courts, the Act potentially has far reaching implications for companies, partnerships and their senior officers. The new Act places a high burden on companies and partnerships to ensure that they have adequate procedures in place to prevent bribery and it is therefore an ideal time for companies to review their current anti-corruption policies. Companies will need to take a pro-active approach and ensure that they take a number of steps not only to minimise their liability, but also to protect their employees, directors and senior officers from personal criminal prosecution.
If you would like any further information about the issues raised in the article please contact Lucy Bloom or any other member of Goodman Derrick LLPs corporate department on 0207 404 0606.
This guide is for general information and interest only and should not be relied upon as providing specific legal advice.
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