This is the first of a series of articles on the House of Lords Select Committee’s recent report, entitled “The Bribery Act 2010: post-legislative scrutiny”, in which members of BCLP’s White Collar team review the report. Here we take a high level look at the fact that although the Act is highly commended, the Committee has highlighted flaws that remain in the UK’s ABC framework which must be addressed to enable the Act to have maximum impact.
The authors of this article have always praised the structure and purpose of the Bribery Act 2010. It is refreshing that after years of criminal offences and provisions being tucked away in obscure pieces of legislation, the titles of which appeared to bear little relationship to their subject matter, first the Fraud Act 2006 and then the Bribery Act 2010 actually dealt with what they said they dealt with. So how is the Bribery Act actually working?
The House of Lords Select Committee on the Bribery Act 2010 has lauded the Bribery Act 2010 (the “Act”) as a world-leading piece of legislation, collating adulation from across the industry: “the gold standard for bribery legislation”; “a lodestar for other countries”; “the high-water mark”; “a precious asset for the UK”. Yet in spite of such praise, successful prosecutions have been few and far between. Between 2011 and 2017, only 28 defendants were found guilty under sections 1 and 2. If the plaudits are correct, we are still some way from seeing the fruit the Act promises to bear.
The proof is in the pudding
In order to be able to comment conclusively on the success of the Act, a broader tranche of cases is required. The Committee laid out the following reasons to explain the small number of successful prosecutions so far.
1. Investigations are slow. Solicitors have complained that SFO bribery investigations can take up to five or six years to reach a conclusion. Ian Pigden-Bennet, formerly CEO of Skansen, told the committee that it took 21 months after self-reporting for the company to be informed it might have contravened section 7 of the Act.
2. Little cooperation has existed between the various bodies that deal with ABC issues. Reporting to the Committee, the OEDC criticised the lack of coordination between investigators and prosecutors. Communication between English & Welsh and Scottish authorities was also marked out as below standard.
3. Section 10 is rigid. As it stands, only the DPP or the Director of the SFO may issue proceedings for an offence under the Act in England & Wales. Conversely, under section 1(7) of the Prosecution of Offences Act 1985, any Crown Prosecutor can give consent to a prosecution on behalf of the DPP. Particularly with regard to low-level cases of bribery, the current system is thought to result in a backlog.
4. Few national police forces have received training on the Act. Low levels of awareness among the primary law enforcement body in the country greatly reduce the chances of detection. The Committee pointed out that a lack of familiarity with the Act may also lead to a tendency to employ alterative legislation less suited to the task.
A change in the winds
Nonetheless, with such problems now officially identified and the relevant parties facing pressure to change, we can reasonably expect to see a rise in successful prosecutions under the Act. Some initiatives addressing these problems are already under way. For example, the Home Office is assessing ways to improve cooperation between the various parties involved in uprooting bribery and corruption, having pledged in 2017 to launch a new, centralised reporting mechanism in the United Kingdom Anti-Corruption Strategy 2017-2022, Year 1 Update (December 2018). Similarly, the launch of National Economic Crime Centre in 2018, which has been tasked with coordinating the national response to economic crime, shows that clear and purposeful steps are being taken to create a more robust, harmonised ABC framework.
The Committee, however, has recommended that further changes are needed. Marked out for their part in the slow nature of investigations, each of the SFO, the CPS and the police now face increased pressure to ensure their ABC policies and procedures are especially efficient. Indeed, the Committee has called on the Director of the SFO and the Director of Public Prosecutions to publish plans outlining how they will speed up bribery investigations and improve communication with companies placed under investigation. The Government also faces pressure from the Committee to ensure that every UK police force is properly educated on the Act and equipped to tackle ABC issues as and when they arise.
As to section 10 of the Act, the Committee has called for subsections (3) to (10) to be repealed and to be replaced by provision enabling the relevant directors to delegate the power to commence proceedings as they see fit. An appropriate spread of authority should result in the detection of a greater number of acts of bribery and corruption, particularly among lower level crimes.
Finally, the Committee has highlighted the importance of the Government’s Anti-Corruption Champion, rebuking the fact that the role is no longer occupied by a Government minister. The Report calls for the role of the Anti-Corruption Champion to be given to someone who holds the necessary influence to make a significant impact.
Other points to note
The Committee has urged the Government to expand the guidance issued under section 9 as to what constitutes an adequate defence to the “failure to prevent” offence, particularly with regard to SMEs. This should be encouraged: with companies more confident in their own procedures, self-reporting becomes a safer, less daunting prospect, resulting in more acts of bribery and corruption uncovered.
Self-reporting was also considered in the context of Deferred Prosecution Agreements. The Report observed that a distinction between companies who have self-reported and those who have not is crucial when assessing whether financial discounts to final settlements are to be granted. The Committee concluded that in this context, appropriate discounts are necessary in order to achieve the ultimate purpose of DPAs – to increase the detection of economic crime.
It is not without reason that the Bribery Act 2010 has received such high praise. As the Committee state, it has created “clear and all-embracing offences” and has significant international reach. However, as is highlighted above, some tweaks in the legislation itself and a focus on enforcement strategy are required in order to see the Act realise its potential. If the results of the Committee’s analysis are properly implemented, we can expect to see a steady increase in the detection and accelerated prosecution of bribery and corruption.