News & Insights

Thumbs up for the Bribery Act

Recent scrutiny by the House of Lords concludes that the Bribery Act 2010 is broadly working well.

It is almost a decade since the Bribery Act 2010 became law. In the early days after its introduction much commentary focused on how it was relevant to companies doing business in developing countries where bribes were more commonplace, and how it might stifle corporate entertaining.

Yet in the intervening years there seems to have been an insidious creep of bribery and corruption within many parts of our society – or the spotlight has been shone on such activity with increasing success.

Reports of corruption now appear quite frequently in the media, most recently the US college admissions scandal.

So among these rather depressing reports it is heartening to read that the House of Lords has recently published a report concluding that the Bribery Act 2010 is actually working rather well in the UK.

In particular the House of Lords found that the introduction of the corporate offence of failure to prevent bribery has had a positive impact in helping to ensure that those responsible for running businesses take account of the need to operate ethically.

By way of a reminder, section 7 of the Bribery Act requires a commercial organisation to prevent conduct amounting to bribery within it and also gives it responsibility for non-compliance “associated” parties. This is not an absolute obligation – there is a defence to section 7 if the organisation has in place “adequate procedures” to prevent bribery.

To date there has only been a few convictions under section 7 (the first being Sweett Group Plc in December 2015) and the first attempted defence based on “adequate procedures” came in March 2018 (Skansen Interiors Ltd). However it seems that House of Lords’ view of the Act’s success is based more on it being a prevention rather than a cure.

It is certainly the case that over the years we have seen Bribery Act compliance clauses become a regular feature of commercial contracts, ensuring that the responsibility for compliance is shared through the supply chain, along with an increase in enquiries from clients about anti-bribery policies. However it is also fair to say that anti-bribery policies by themselves are unlikely to be enough to demonstrate that adequate procedures have been put in place – as the well-publicised case involving Rolls Royce illustrated.

The Ministry of Justice has published guidance on the Act which is very well worth a read – it outlines six principles which should be embraced and makes it clear that an anti-bribery policy is only one of several steps which need to be taken:

However the House of Lords did comment on a number of areas where the Act has been less successful, including:

  • The Ministry of Justice guidance may not be as helpful for SMEs as it is for larger corporates.
  • For companies considering exporting, the guidance could give more clarity around hospitality.
  • The SFO’s investigations are sometimes conducted too slowly (although the report does not make any recommendations for improvements).

Nonetheless the report is a timely reminder to organisations large and small that bribery and corruption are serious matters and deserve board-level attention. If you would like to know more about these rules and how to ensure effective compliance within your organisation, please contact Bill Dixon or Cathrine Ripley.