First Convictions under the Bribery Act 2010
2nd March, 2015
The serious Fraud Office has now secured its first convictions under the Bribery Act 2010 since the Act came into force in July 2011.
What has happened?
In December 2014 three company directors were found guilty and sentenced to a combined 28 year custodial sentence in relation to £23m biofuel fraud.
They were also disqualified from acting as directors for a combined total of 40 years, with confiscation proceedings and compensation orders being brought against each of them.
Whilst the fraud related to a number of offences, of particular relevance was the fact that the offences also related to ‘giving bribes’ as referred to in section 1 of the 2010 Act, and also ‘receiving bribes’ as referred to in section 2 of the 2010.
What does this mean for businesses?
Since the Act came into force in 2011 there has been a misconceived perception by some organisations and individuals that the Serious Fraud Office will not take a ‘hard line’ in prosecuting bribery offences.
This case demonstrates that the SFO does take the new legislation very seriously, and that the SFO does have the appetite to prosecute bribery offences.
It is also recognised that as more offences come to light there will be an increase in the number of prosecutions by the SFO and other agencies.
What does the Bribery Act say?
The 2010 Act creates a number of bribery offences including the offence of ‘failure of commercial organisations to prevent bribery’.
In circumstances where a person/employee/agent/contractor commits an offence of bribery by intending to obtain or retain business for the organisation, or obtain an advantage in the conduct of business, the organisation itself is also liable for prosecution.
As this offence is one of strict liability it is irrelevant that the organisation itself was not at fault, and it is also irrelevant that the organisation had no knowledge of the offending behaviour. It is also irrelevant if the offence is carried out abroad.
What do companies need to do in light of this case?
This case demonstrates the importance of ensuring that organisations have ‘adequate procedures’ in place from the outset.
In circumstances where Bribery Act offences are committed by persons associated with the organisation, and ‘adequate procedures’ can be demonstrated together with an anti-bribery policy in place, there will be a much greater chance of organisations avoiding prosecution.
How can I find out more about this issue?
For further advice please contact Stephen Graham in Ward Hadaway’s regulatory team.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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