· 2 min read · Features

Bribery Act, two years on, what was all the fuss about?

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Almost two years ago, the Bribery Act 2010 came into force. Before the legislation was passed, there was understandable concern among employers that many actions of their employees would fall foul of the offences listed in the Act. However, the reality is that accepting or providing corporate hospitality has not led to a wave of prosecutions for employers and employees as had been feared. Here, I remind employers of the main provisions that you need to be aware of and where the potential pitfalls lie.

Background

Previous legislation covering bribery and anti-corruption was fragmented and outdated and arose primarily from case law and the Prevention of Corruption Acts 1889 to 1916. The Bribery Act updates and brings together much of the previously fragmented law and creates four bribery offences:

• The offering, promising or giving of an advantage;

• Requesting, agreeing to receive or accepting of an advantage;

• Bribery of a foreign public official; and

• The new offence of failure by a commercial organisation to prevent a bribe being paid for or on its behalf (referred to as 'corporate bribery')

Corporate offence

It is this new offence of corporate bribery that had employers running to their lawyers. The Act states that a company is committing an offence if an employee, worker or consultant who performs services on behalf of the company bribes another person with the intention to obtain an advantage in the conduct of the company's business. Even scarier for many businesses is that the offence can be committed by acts done both in the United Kingdom and overseas.

However, companies do have a defence to corporate bribery. A company accused of corporate bribery can rely on the fact that it had in place adequate procedures that were supposed to prevent the offence.

The Ministry of Justice says policies simply need to be proportionate to the potential risk they incur of committing the offence. The procedures put in place should be designed to both mitigate identified risks and prevent deliberate unethical conduct on the part of employees, workers and consultants. Senior management is encouraged to actively involve itself in the prevention of anti-bribery and the employer is advised to introduce (or update) a whole host of policies covering hospitality, marketing and promotion, governance with other organisations and disciplinary procedures for breaching bribery policies.

This offence of corporate bribery carries with it implications for both the company and its directors. Both could be subject to criminal sanctions and fines.

What effect has the Act had on employers?

The first prosecution was made under the Act in October 2011. A former Magistrates' court clerk was convicted of accepting a bribe of £500 in exchange for not recording a road traffic offence.

However, to date, there do not appear to have been any successful prosecutions for the corporate offence. The Serious Fraud Office has indicated that the Act is not designed to punish or prevent hospitality and promotional expenditure that is reasonable, proportionate and made in good faith as this remains an established and important part of doing business. This common-sense approach is to be welcomed, particularly as prosecutions for taking clients to sporting events or even just a casual drink would fly in the face of the coalition Government's anthem that Britain is 'open for business'.

Conclusion

There was much scaremongering in relation to the introduction of the Bribery Act 2010, and particularly the new corporate offence for employers. However, the lack of prosecutions for the new offence shows that perhaps the real value of the new corporate offence is the deterrent effect. Nevertheless, employers would be wise to continue to review their policies against all aspects of the Ministry of Justice's guidance on what constitute 'adequate procedures'.

Peter Byrne is director at HR legal service

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