Cobbetts column: Bribery Act 2010 – Finally, the guidance we’ve all been waiting for!

Cobbetts column: Bribery Act 2010 – Finally, the guidance we’ve all been waiting for!

Emma roe, cobbetts    

By Emma Roe, commercial lawyer at Cobbetts LLP

THE Ministry of Justice published their much anticipated revised guidance on the Bribery Act 2010 on 30 March 2011. When I use the phrase ‘much anticipated’, I’m not talking of a new Matt Damon film or Harry Potter instalment, but a piece of statutory guidance which is hardly likely to make for bed-time reading for most people. However, those of us who have been advising our clients on compliance with this rather unyielding piece of legislation have been keen for some practical clarification.

Draft guidance was published at the end of 2010, but the UK business community, including prominent organisations such as the CBI, made it clear to Ken Clarke that this simply wasn’t helpful enough in understanding how the potentially wide net of the Act was going to be cast.

Whilst businesses might have hoped for the summer months to get their houses in order before the offences come into force, Mr Clarke was as good as his previous promise of a three month window for organisations to get to grips with the Act in light of the revised guidance. The controversial legislation, which has been sitting on our statute books since the wash-up ahead of the May 2010 General Election, will finally come into force on 1 July 2011.

So, any businesses which have been putting off considering whether the Act has any impact on them have no more excuses – it’s time to check their exposure and get compliant in order to avoid unnecessary risk beyond 1 July. To be fair, the added focus on proportionality as the watchword of this new guidance hopefully gives SMEs some degree of comfort as to the cost and time required in the process.

The stick in the Act was always focused on the new ‘corporate offence’ which is committed by a commercial organisation failing to prevent bribery taking place by a person associated with it. However, the carrot to this is the defence available if that commercial organisation can demonstrate it had ‘adequate procedures’ in place to prevent the bribery taking place. Despite a bit of re-ordering, the guidance continues to focus on six key principles which should form the basis of approach of any organisation, large or small, to applying its own ‘adequate procedures’. Although moved to principle 3 from its original number 1 slot, the sensible start point for any organisation must still be the conduct of a documented and informed risk assessment exercise. This seems the only sensible route to considering how much action is required for a proportionate response to the issue of bribery in light of factors such as the industry sector and areas of interaction with foreign markets.

Whilst the revised guidance raises hopes by starting to suggest some practical examples, those hopes are dashed somewhat by the lack of black and white answers – if anyone had been thinking that’s what we would get from this. So, although this new guidance does seem to shed a little more light on the Serious Fraud Office’s likely targets and gives some reassurance as the attitude to corporate hospitality, it remains a question of context as to whether a seemingly innocent invitation or offer will pose a risk.

Emma Roe
Commercial lawyer
0845 404 1741