The Bribery Act 2010 - An Overview and update
THE BRIBERY ACT 2010 - AN OVERVIEW & UPDATE
Written September 2014 by:
Peter Doyle QC - 25 Bedford Row - Called 1975 - Silk 2002
A Criminal defence practitioner highly proficient in defending Serious Crime, Complex Fraud & Confiscation proceedings. Peter Doyle QC has a phenomenal eye for detail and is unrivalled in his thorough preparation of cases. He is recommended as a leading Silk in Fraud in the Legal 500 2013 and Chambers & Partners 2014.
- The Act came into force on 1 July 2011 in respect of offending occurring wholly on or after that date and applies throughout the UK as well as having extra-territorial reach.
- The SFO is the lead agency for investigating and prosecuting cases of overseas corruption. The CPS prosecutes offences investigated by the police committed within the UK as well as overseas. Before any prosecution can be instituted it will require either the personal consent of the DPP or the Director of the SFO; the usual delegated consent regime does not apply. (s.10).
- Although the Act in creating four offences covers all forms of bribery two of the offences are business related. This reflects the Act’s focus on bribery occurring within the commercial sector and the Government’s drive, consistent with its numerous Convention obligations, to combat the culture of bribery identified in certain sectors and markets and to promote high ethical standards in worldwide business dealings.
- Individual acts in a non-commercial context are covered. Thus, for example, match fixing (giving “bungs” to a referee), attempts to influence officials for personal gain (to obtain approval for a house extension), to secure a non- competitive advantage over others ( obtaining entrance for a child to an over-subscribed school) or for a poor learner driver to pay an examiner to obtain licence approval, would all be caught by the Act. In whatever context the offending occurs there is no requirement to prove dishonesty.
- Two general offences of bribery are introduced; (a) where a person bribes by offering, promising or giving a financial or other advantage, whether directly or through a third party, where that advantage is intended to induce or be a reward for improper performance of a relevant function or activity (“active bribery” s.1) and (b) where a person requests, agrees or receives a financial or other advantage knowing or believing that what is being offered, promised or given, itself constitutes the improper performance of a relevant function or activity (“passive bribery” s.2).
- The Act makes no attempt at definition of “financial or other advantage”. It will be for the tribunal to give “advantage” its natural meaning and in that regard to apply common sense.
- The language of the Act is wide enough to include cases where an offer, promise or request can be inferred from conduct. This means that the offending does not have to be results based; it is the conduct that matters and it is immaterial that it fails to achieve its intended outcome. Only in those cases where it is alleged that an advantage was given or received is it necessary to prove a concluded transaction.
- S.4 introduces the concept of “improper performance”; central to the general bribery offences as well as those cases where a commercial organsiation fails to prevent bribery given that such offending is predicated on the basis that a bribery offence has in fact been committed.
- "Improper performance” involves the breach of an expectation of “good faith”, “impartiality” or “trust” in respect of the activity or function in question as judged by the standards of what a reasonable person in the UK would expect. (s.3(3)-(5) and s.5(1)).
- The Act does not outlaw hospitality and promotional expenditure, which is reasonable, proportionate and made in good faith. It is recognised that such arrangements are a feature of ordinary business dealings. However, the more lavish the hospitality or expenditure and thus the less representative of reasonable standards in the circumstances, the more likely an inference may be drawn that it is intended to encourage or reward improper performance or to influence conduct to one’s advantage. Clearly where the expenditure does not relate to a legitimate business activity and or is concealed, the greater the likelihood of the adverse inference being drawn by the prosecuting authorities and charges being brought.
- Section 6 makes it an offence to bribe a foreign public official as defined. It is necessary to prove an intention to obtain or retain business or an advantage in the conduct of business.
- It is an offence if a commercial organisation fails to prevent bribery by a person associated with it. (s.7). The jurisdiction is very wide. If the commercial organisation is incorporated or formed within the UK or it carries out its business or part of its business in the UK, courts in the UK will have jurisdiction irrespective of where in the world the acts or omissions forming part of the offence may have been committed. (s.12 the “close connection” provision).
- Whether a person is “associated” (s.8) with the commercial organisation is determined by reference to what is in fact done (without regard to the bribery alleged) taking into account all relevant circumstances and not just the nature of the relationship. It is what is done that matters not the capacity in which it is done. The associate may be an employee of the commercial organisation, in which case, unless the contrary is proved, there is a presumption that the conduct in question is on behalf of that organisation, or be an agent or a subsidiary.
- The Secretary of State is obliged to publish guidance about procedures that relevant commercial organsiations can put in place to avoid s.6 offending. (See “Guidance about commercial organisations preventing bribery(Section 9 of the Bribery Act 2010” published by the Ministry of Justice).
- The offences for individuals each attract a maximum term of 10 years’ imprisonment and an unlimited fine with an unlimited fine for corporations. (s.11) Prosecutions can be brought against senior officers of a body corporate where an offence has been committed by that corporate body with their consent or connivance (s.14).
- It is a defence if a relevant commercial organsisation can prove on a balance of probability that it had adequate procedures in place to prevent persons associated with it from bribing. (s7(2)) This defence is likely to be highly relevant to the prosecution authorities in considering whether there is a realistic prospect of conviction; particularly in a case where the actions of an employee or agent are or may be willfully contrary to robust corporate contractual requirements, instructions or guidance. The Ministry of Justice (as required by the Act) has issued “Guidance about commercial organsisations preventing bribery (Section 9 of the Bribery Act 2010)”.
- So what prosecutions have been brought? Have any convictions been secured? Introduced by the last Government the Act was either seen by its critics as a brake on competition or by its supporters as a boost to the UK’s poor performance in combating international corruption.
- However, to date no company has been prosecuted and it was only on the 14 August 2013 that the SFO charged three individuals under the Act in connection with the promotion and sale of bio-fuel investments. Yet these charges are but part of wider allegations; central focus being on an alleged conspiracy to defraud by false representation and to furnish false information. It is unlikely that this case will provide any insight into the approach of the SFO to the ambit of a commercial organisation’s liability for third parties or “the adequate procedures” defence.
- However, it is clear that other SFO prosecutions may be in the pipeline. The new Director has made it clear that he will not be rushed in identifying appropriate cases and that the “right” cases will be prosecuted. He has already announced two further investigations into companies under the Act.
- The first successful prosecution of an individual took place in November 2011. Munir Patel, a court clerk at Redbridge Magistrates’ Court, pleaded guilty to receiving payments in return for giving people advice on how to avoid traffic prosecutions. However, it is noteworthy that it was he who sought out his “clients” rather than being approached by them. He abused his position of trust for reward. The result was that he was not only prosecuted for an offence under the Act but was also charged with misconduct in public office. He received a three year sentence under the Act and six years’ concurrent for misconduct. It is likely therefore that where an official in a position of trust initiates bribery that a misconduct offence will be charged and take center stage.
- Given that the Act only relates to conduct after July 2011 and investigations of serious cases of suspected corruption by the SFO will require substantial commitment of both time and resources, it is premature to pre-judge the value of this legislation in combating corruption in the commercial sector. Equally it is far too early to gain any useful insight into the approach by prosecutors to bribery cases; particularly those with an international reach or which may engage the statutory defence. Advising clients will for the present be unassisted by precedent.
Expert Fraud & Corruption Solicitor:
Majad J Habib: Director - Stuart Miller Solicitors
The expert Fraud Solicitors at Stuart Miller Solicitors are proficient with Fraud & Corruption legislation, knowledgeable in creating the best strategy & able to analyse huge volumes of evidence to find the grain of detail required to achieve success for you. Having Specialist Fraud & Corruption Lawyers on your side is vital to achieve the best result and ensure fairness in the proceedings. Challenging Corruption allegations successfully is not a stroll in the park by any means, thus ensuring your Bribery & Corruption Solicitors are leading experts will maximise your chances of success and avoiding the seizure of your assets.
This document is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of its content.