What has been achieved since the introduction of The Bribery Act 2010 that was intended to tackle bribery in business?
The Bribery Act did not explode on to the legal scene. It took a year to come into force, prosecutions were slow to be brought and its impact on court records so far has been negligible.
As it was enacted exactly five years ago, it seems like an appropriate time to assess its importance – and may be sound a warning against complacency.
When it came into being in 2010, the Bribery Act was the subject of plenty of attention. Claims were made that it would be the scourge of corruption in business, it gained lots of column inches in the business and legal media and many business figures openly feared whether it would prompt a draconian crackdown on traditional practices such as hospitality. Passed at the very end of the last UK parliament, it came into force a year later, on 1 July 2011.
So what has happened since then? Well, the prosecutions have not been forthcoming. But on the plus side, there has not been the problems of UK companies behind hampered worldwide by the provisions of the Act. One fear was that UK companies bidding for work abroad would struggle to secure it if they were no longer able to indulge in bribery and corruption to seal a deal. The reality, at least as far as we know, is that this has not been the case. Fears of being at a disadvantage do not appear to have had any foundation.
It could be argued that this fear was not unjustified or irrational. The Act made it a criminal offence for any company with a UK connection to be involved in bribery anywhere in the world through the actions of its staff, agents, third parties or other representatives. The scope of the Act is wide, which perhaps accounts for the concerns of many at the time it passed into law.
So has this scope resulted in a large number of prosecutions? The answer is no. The Serious Fraud Office (SFO) secured its first convictions under the Act last December, when three people were found guilty of a £23 million fraud that involved business figures being bribed to approve false invoices. Yet, there have been no corporate prosecutions so far and no deferred prosecution agreements (DPAs) relating to the Bribery Act case. The SFO case is not the only prosecution but, so far at least, the Act has not been wielded in the kind of large-scale bribery scenario it was designed for.
Critics will argue that this indicates that the Act is ineffective. It is an obvious argument but one which does not look at the full picture. The Act could only be applied to conduct taking place from July 2011 onwards, so there was never going to be an immediate wave of cases coming to court. Add to this the fact that any Bribery Act prosecution requires investigation, evidence gathering and pre-trial negotiation and it was always unlikely that we would not be waiting long to see prosecutions.
But it would be wrong to deduce that the Bribery Act is limited in its effectiveness. Bribery is clearly on the agenda of the authorities; whether it be the SFO, National Crime Agency, the City of London Police, the Financial Conduct Authority or any other investigative body here or abroad. They work closer together than ever before, have better technology at their disposal, ever-improving links with their counterparts abroad, and can call on a range of more far-reaching legislation - such as the Bribery Act.
The Ministry of Justice has indicated that proportionate procedures, top-level commitment, risk assessment, due diligence, communication and training, monitoring and review are factors to be considered by companies and organisations looking to prevent prosecution under the Bribery Act. It may take a number of cases to see exactly what is expected when it comes to these factors. But what we do know is that the Bribery Act enables authorities the potential for gain prosecutions in instances involving evidence and events anywhere in the world.
The global reach of the Act effectively means that ignorance of bribery, negligence regarding it or the turning of a blind eye is not an adequate response – wherever in the world it is practised.
As a result of this, companies are now paying more attention to compliance. The prosecution count for the Birbery Act is, at present, low but we have already seen that not following the Act can lead to prosecution. Without looking into a crystal ball, it is fair to say that more prosecutions are likely to follow soon. To avoid being one of those, companies have to undergo a detailed assessment of just how exposed their staff or other representatives are to potential involvement in bribery. By doing this, they can recognise the need for, and devise, the best anti-bribery policies for their company. These policies cannot be mere paper exercises. They must be implemented and enforced with training, monitoring and reviews and acted on from the top down.
The Bribery Act 2010 has been with us a good length of time, now. It has not led to many prosecutions. But it would be a huge mistake to underestimate it – and an even bigger mistake not to take steps to avoid falling foul of it. There is plenty of anecdotal evidence out there that suggests bribery is still commonplace, albeit more so in some countries and business sectors than in others. Logic dictates that there will be more prosecutions under the Bribery Act 2010 as the authorities uncover more activity worthy of action. The first five years have only hinted at what is likely in the future.
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