On July 31, 2018, in response to a review of the Bribery Act 2010 (the “Bribery Act”) conducted by the UK Government, the Law Society, the City of London Law Society and the Fraud Lawyers Association published a joint response (the “Joint Response”) to the UK Government’s call for evidence on the enforcement and effectiveness of the legislation.[1]

As is common practice for significant UK legislation, a committee of the House of Lords was established in May 2018 to conduct a post-legislative review of the Bribery Act. To date, the committee has received 41 written submissions to its call for written evidence, which has now closed, and the committee is currently gathering oral evidence.

The Bribery Act prohibits both active bribery i.e., bribing another for the purpose of inducing or rewarding the improper performance of an activity or function,[2] and passive bribery i.e. the taking of a bribe.[3] Persons may also be found guilty of an offence under the Bribery Act if they bribe a foreign public official with the intention of influencing them and obtaining or retaining business or a business advantage.[4]

Of particular concern for commercial organizations is the offence under the Bribery Act of failure to prevent bribery.[5] A commercial organization will be liable for failing to prevent bribery by a person “associated” with it. For these purposes, an “associated person” encompasses any person performing services for or on behalf of the commercial organization in any capacity.[6] The liability under the failure to prevent offence is expansive, covering entities incorporated in the UK or incorporated overseas but carrying on business in the UK.[7] A commercial organization will not be liable under the failure to prevent offence if it can show, notwithstanding the failure to prevent the bribery, that it had “adequate procedures” in place to protect against bribery.

The Joint Response does not identify any significant need for amendments to the Bribery Act, but notes a number of areas of uncertainty regarding the legislation’s enforcement and suggests that further guidance from prosecutors is needed. Noteworthy observations made in the Joint Response include the following:

  • The relatively few prosecutions under the Bribery Act. The Joint Response observes that prosecutions under the Bribery Act are “still unusual”, noting that there have been 16 prosecutions relating to the offences of bribing another person or offences relating to being bribed, two prosecutions for failure to prevent bribery and, to date, no prosecutions for the bribery of foreign officials since the Bribery Act came into force in 2011.[8]
  • Limited guidance on the “adequate procedures” defense. Shortly after the implementation of the Bribery Act, the UK Ministry of Justice published Guidance for commercial organizations on the scope of the “adequate procedures” defense. In broad terms, the Guidance highlighted the need for commercial organizations to ensure communication, anti-bribery training and internal monitoring. However, beyond the Guidance, and given that there has only been one contested case (decided by a jury[9]) to date, guidance on compliance on the scope of the defense is very limited. The Joint Response noted that “it is important for businesses to understand that mere written procedures are not a panacea” and that an ongoing commitment to anti-bribery efforts is required.[10]
  • The utility of Deferred Prosecution Agreements (“DPAs”). The Joint Response notes that “there are some differences in how DPAs have been applied which call into question the consistency of the approach of prosecutors”.[11] For example, Rolls Royce did not self-report to the Serious Fraud Office (the “SFO”), but nevertheless was invited to enter into a DPA, due to what was described as “extraordinary” cooperation.[12] By contrast, in the recent case of Skansen Interiors, the Crown Prosecution Service prosecuted Skansen Interiors and chose not to enter into a DPA despite the fact that it had self-reported its misconduct.[13] Noting that Skansen was a small company (as compared with the companies that have concluded DPAs to date), the Joint Response suggests that “DPAs are likely to be more easily applied to larger businesses”.[14] The Joint Response suggests that the criteria applied by prosecutors to determine eligibility for a DPA are unclear, but suggests that larger, well-resourced companies may be more easily able to cooperate extensively with prosecutors. By way of example, it was noted that Rolls Royce estimated in their court hearings that they had spent over £123 million conducting investigations in relation to their DPA.[15]

The post-legislative review of the Bribery Act’s effectiveness is ongoing, and the committee will announce their assessment of the Bribery Act’s effectiveness in 2019.

[1] The Law Society, The City of London Law Society and The Fraud Lawyers Association, “House of Lords Committee on the Bribery Act: Responses to Call for Evidence”, July 31, 2018, http://www.lawsociety.org.uk/policy-campaigns/consultation-responses/bribery-act-evidence-submission/.

[2] Section 1, Bribery Act 2010.

[3] Section 2, Bribery Act 2010.

[4] Section 6, Bribery Act 2010.

[5] Section 7, Bribery Act 2010.

[6] Section 8, Bribery Act 2010.

[7] Section 12, Bribery Act 2010.

[8] Paragraph 2.1, Joint Response. See Serious Fraud Office, News Release, “Sweett Group PLC sentenced and ordered to pay £2.25 million after Bribery Act conviction”, February 19, 2016, https://www.sfo.gov.uk/2016/02/19/sweett-group-plc-sentenced-and-ordered-to-pay-2-3-million-after-bribery-act-conviction/.

[9] R v Skansen Interiors Ltd (2018) (unreported).

[10] Paragraph 4.12, Joint Response.

[11] Paragraph 7.7, Joint Response.

[12] Serious Fraud Office v Rolls-Royce Plc, Rolls-Royce Energy Systems Inc [2017] Lloyd’s Rep. F.C. 249.

[13] Paragraph 7.9, Joint Response.

[14] Paragraph 7.10, Joint Response.

[15] SFO v Rolls-Royce Plc, Rolls-Royce Energy Systems Inc at 39.