The Bribery Act 2010: Act Now!

by Philip Wild on April 18, 2013

The Bribery Act 2010 was due to come into force in April 2010, and is seen to be one of the strongest attacks in the fight against corruption the UK has seen for decades. Unfortunately, however the publication of the final version of the guidance on adequate procedures was delayed until 30 March 2011, postponing the date of implementation for the Act until 1 July 2011.

The Act is designed to tackle corruption in both the public and private sectors, replacing previous Acts regulating the area. Both companies and individuals will face a new set of risks that do not currently exist under UK jurisdiction. The Act has created four new separate offences relating to bribery; one of which makes receiving as well as giving a bribe, an offence; while another places strict liability on commercial organisations that fail to prevent an act of bribery.

This strict liability offence imposes liability without the usual prerequisite of ‘mens rea‘, meaning there is no requirement to prove corrupt intent. The implication of this is that businesses, whether small, medium or large, that are unable to show that they have taken positive steps to implement procedures in order to stop such acts could face unlimited fines, whether or not the owners actually knew what was going on.

Although the Act has been postponed until three months after the guidance is released, companies are being urged to update or put in place anti-corruption and bribery policies to ensure they will comply with these new laws, in time for when the Act comes into force.

Both companies and directors can be convicted of a criminal offence under this Act, with an individual facing up to ten years’ imprisonment and significant fines, and a company facing unlimited fines. A conviction could also result in significant reputational damage.

Philip Wild who is a partner in the Company and Commercial department at Kidd Rapinet’s London office says:”It would be a mistake for businesses to think they can just wait for the Bribery Act to come into force, and then put in place an anti-bribery policy. Compliance requires a culture to be established that such conduct is unacceptable, and that does not happen overnight. In any case, certain acts of bribery are illegal under the present law, so putting in place policies to prevent them makes good business sense, even before the new Act places focus on compliance.”

The only defence for a corporate body when being prosecuted under this Act is to show that ‘adequate procedures’ were in place in order to prevent these acts of bribery in connection with the business. Internal procedures and codes of conduct will therefore need to be addressed within enterprises, as these are the foundations of companies’ anti-corruption policies.

Standard contracts may need to be updated to include or tighten up clauses prohibiting bribery or corruption. This can address the risk of bribery being committed by third parties. Due diligence in managing business relationships, including risk assessment, may need to be carried out both before and during transactions.

All of this should be enforced and approved at the highest level, then implemented throughout each sector, with regular auditing and monitoring in place. This way, such policies and procedures will be communicated effectively and efficiently to staff. To prove ‘adequate procedures’ were in place (or hopefully to prevent an offence taking place in the first place), it will not be sufficient to hold a policy or include certain clauses in contracts. For businesses that are potentially exposed to such risks, a culture change may be required.

If you require assistance with developing your anti-corruption policies and adequate procedures, or would simply like us to review how your current policies will live up to scrutiny, call Philip Wild on 020 7024 8029.