The Bribery Act 2010 recently celebrated a significant milestone, having been in force for ten years. The legislation was considered pioneering, setting an international benchmark for compliance and drastically changing anti-bribery and corruption law in the UK, with its effects being felt on a global scale.
In this article, Claire Shaw analyses the Act ten years on and considers its success.
Bribery law before the Act
Before 2010, the UK’s bribery laws were a mix and match of statutory and common law offences, leading many (including the OECD’s working group on bribery in 2008) to believe that the laws were inadequate and unworkable. Conviction rates were notoriously low, despite the UK having signed up to the OECD’s Anti Bribery Convention.
The bulk of the Act was not new law, but clarified and simplified the existing law, as well as giving a particular focus to the bribery of foreign officials (previously the domain of the USA’s Foreign Corrupt Practices Act).
The exception to this was the introduction of a new Failure to Prevent Bribery, aimed at corporates and other commercial organisations. This was set out in section 7 and was controversial at the time for being a strict liability offence – not something usually associated with the criminal law until then.
Many businesses were alarmed during the pre-implementation Consultation phase at what might constitute behaviour which would be in breach of section 7. This was particularly so for organisations doing business internationally, where controlling the conduct of all “associated persons”, sometimes located in far-flung and high-risk jurisdictions, is always a challenge. This led to the Ministry of Justice’s Guidance being issued, which provided some high-level indications of what might constitute the defence of having Adequate Procedures.
Has the Act been a success?
Strange though it is to say, it is still relatively early days for the Bribery Act. Ten years of any law may seem like a long time, but generally, cases do not tend to come forward until six or seven years after implementation, simply because the conduct being questioned is usually several years old, and much will fall under the old law, even until fairly recently.
And if you are looking for conviction rates as a mark of the Act’s success, then the results for the Bribery Act are deceptive. Much of the success of the Act is in its early resolution of cases with corporate defendants, usually by the use of Deferred Prosecution Agreements (DPAs), which by definition do not result in a conviction at all.
However, the Act was always intended to do much more than just clarify the law and lead to more prosecutions – it was about a culture shift, and to some extent the Act has been successful in that aim.
It is arguable that the tolerance of wrongdoing has been increasingly unacceptable (thanks in part to the provisions of the Act and the intense publicity around its coming into force) and that the business practices that were “just the way you do business” twenty to thirty years ago are completely unacceptable to today’s younger C-suite executives and senior managers.
The Bribery Act – which goes further than the USA’s much-vaunted FCPA – sets the bar for international compliance and should be recognised as having contributed significantly to improvements in compliance awareness and ethical business practice.
Failing to Prevent Bribery and Deferred Prosecution Agreements
The really big success story when considering the Bribery Act, though, is the section 7 offence – Failure to Prevent Bribery – combined with the availability of DPAs as a means of resolution. DPAs were introduced in February 2014, by which time the conduct under investigation was starting to fall within the scope of the Bribery Act, and so a section 7 offence was an option for prosecutors.
The powerful mix of a section 7 strict liability offence together with a DPA to resolve the matter was the main driver to the SFO obtaining many £100 million by way of fines from corporate defendants.
Companies can now see that one provable instance of a bribe being paid could open them up to years of invasive and disruptive investigation by the authorities, coupled with a long and expensive potential trial process and a potentially crippling fine. C-suite executives and General Counsels have been required to apply their pragmatic and commercial skills in the context of the criminal justice system in order to resolve their issues, and there has been a commensurate willingness to accept liability, pay the fine, make some changes and move on.
Corporate defendants, whilst wanting to be properly represented and know the arguments they could take if they wanted to, are more likely to treat the criminal investigation process as they would a large piece of civil litigation, and just find the quickest and least painful way out.
The corollary of this, namely the lack of individuals being prosecuted for corruption for which a corporate has accepted responsibility, should not come as a surprise. Whilst companies can afford to forego a legal argument if to take another course will be cheaper and more effective, individuals under investigation and at risk of prosecution do not have the same luxury.
An individual, whose liberty, career, family life and entire future hinges on whether he/she is convicted, will fight with every legal argument open to them. And as is only right in a fair and open justice system, those arguments sometimes work.
If the quantity of convictions for individuals is the goal of the Bribery Act, then perhaps it has not achieved that, despite the laudable clarification and simplification of the law that it attained. But corruption cases have always been difficult to establish and this Act has not changed that. People rarely (but do in some cases!) write emails, notes or letters which establish or record a plan to bribe. It is usually powerful circumstantial evidence which will sway a jury, and that often takes time a long time to obtain.
Perhaps the lesson is that the SFO should be under less pressure to deal with cases swiftly but be fully accountable on the lawful and accurate process of its cases, focusing on the detail and the international co-operation – historically one of its greatest achievements – in obtaining the evidence to the standard demanded by juries.