Public Law

This question kept on running through my mind last night in Glasgow at our seminar on the impact of the new Bribery Act.

Until now, if you wanted to prosecute a company for corruption you really had to pin the charge at or near board level for it to stick. Prosecutors found that very difficult. But they’ll find it much easier now. When the new Act comes into force in April 2011 it brings with it a new crime. Now, if a person “associated” with a company gives a bribe, the company is presumed guilty unless it can show it had adequate procedures in place to prevent bribery.

An associated person is not just an employee or agent, it can be “anyone who performs services for or on behalf of” a company. This is a startling extension of criminal liability: if someone you do business with is guilty of bribery so might you be, unless of course you have these “adequate procedures” in place.

Well what does “adequate procedures” mean? The UK Government is not pinning its colours to the mast at this stage. In their draft guidance which is after all about adequate procedures they “do no propose any particular procedures”.

The overall scope and reach of the Act has led to calls for greater clarity, but the Ministry of Justice has said “the exercise of prosecutorial discretion provides the degree of flexibility required to ensure the just and fair operation” of the law. The same point was put more pithily by the Labour Government which took the Act through parliament. On the subject of corporate hospitality a Minister explained “it is sufficient to rely on the prosecutors to differentiate between [what is] legitimate and illegitimate”.

For those of you confused, frustrated, or concerned by the impact of the Bribery Act, we’ll be providing useful tips on the new corporate crime, acceptable corporate hospitality and other key issues in Edinburgh, on 11 November.

Paul Marshall

Partner at Brodies LLP
Paul leads Brodies’ Corporate Crime and Investigations team. He has more than a decade of experience conducting and managing internal investigations for clients who suspect that something has gone wrong within their business. He advises and support clients facing investigation by the police and specialist regulators
Paul Marshall