Legal Updates

Commercial Law – Bribery Act - Coming into Force April 2011

The Bribery Act 2010 (“the Act”), which received royal assent on 8 April 2010, is expected to come into force in April 2011 and creates a number of new offences of which business owners and individuals within business need to be aware. 

The offences can be summarised as (i) paying and receiving bribes; (ii) bribing foreign officials; and (iii) failure to prevent bribery on behalf of a commercial organisation.

Bribery is broadly defined as promising or giving financial payment or advantage to an individual to induce that individual to perform ‘improperly’ a ‘relevant function or activity’.  It would similarly be an offence to receive a bribe in those circumstances.  Improper performance of the relevant function or activity must result in a breach of good faith, impartiality or the individual’s position of trust.   The ‘relevant function or activity’ can be a public function, but could also be activities relating to business or employment.  Individuals found guilty of giving or receiving bribes could face imprisonment for up to 10 years.

Section 7 of the Act creates a ‘corporate offence’ under which a company will be guilty under the Act if a third party providing services for and on behalf of the company bribes another individual with a view to obtaining and/or retaining business for the company.  Such offence can be committed in the UK or take place abroad, and the company can still be liable in both instances.  Corporate bribery could result in criminal sanctions for directors of a company of up to 10 years’ imprisonment, and unlimited fines for the company itself.

The wrath of the Act could be felt by organisations that do not implement adequate anti-corruption procedures prior to the Act coming into force. 

Having adequate procedures in place to try and prevent bribery is a defence under the Act.  However, what constitutes ‘adequate procedures’ will be a question of fact for the courts to decide in due course.

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© RT COOPERS, 2011. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances.