Cautious approach should be taken to new legislation
Lawyers are advising companies to take a “cautious approach” to the Bribery Act following the issuing of guidance last week by the Ministry of Justice on how companies can put “adequate procedures” in place to avoid prosecution.
The 2010 Act, due to come into force on 1 July 2011, creates a new offence of failure by a commercial organisation to prevent persons associated with it from bribing others on its behalf.
The guidance sets out some simple steps that can be taken to resolve bribery risks, and advises senior management to become personally involved in addressing these. As before, corporate hospitality will be allowed and “facilitation payments” will be unlawful.
Mathew Rutter, partner at Beachcroft, says it is important to bear in mind that “the wording of the Act itself is unchanged, and this guidance does not create a safe harbour”.
Sam Eastwood, partner at Norton Rose LLP, says: “The guidance may have limited weight in the English courts—the guidance does not have the force of law and can be revised by the secretary of state at any time.
“The ultimate effect of the Act will depend on how it is interpreted by prosecutors and, ultimately, the courts, and there remains a risk that they will take a stricter line on some issues like ‘associated persons’ or the territorial scope of the Act.”
Ed Crosse, partner at Osborne Clarke, says that for the majority of ethical businesses, adopting a common sense, proportionate and risk based approach should address their obligations. “However, if companies operating in high risk sectors or jurisdictions fail to protect themselves by properly assessing the risks presented by their business, they will be seriously exposed under the new regime.”
Last week, the director of public prosecutions and the director of the Serious Fraud Office also jointly issued guidance for prosecutors on how to decide whether to bring a prosecution.
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