In September, Scotland’s Civil Recovery Unit of the Crown Office and Procurator Fiscal Service (COPFS) announced an agreed civil settlement with Brand-Rex Limited, a Scottish cabling company that accepted responsibility for failing to prevent unlawful conduct by one of its independent installers in violation of the U.K. Bribery Act of 2010. The settlement, totaling £212,800, was the first for failure to prevent bribery by a third party. Following an investigation conducted by external counsel and forensic accountants, Brand-Rex’s counsel self-reported the bribery scheme to COPFS.
Notably, in its announcement, COPFS conceded that the Brand-Rex incentive scheme known as “Brand Breaks”—which provided varying degrees of rewards, such as travel and vacations to installers and distributors meeting or exceeding sales targets—was not itself unlawful. Rather, the unlawful conduct at issue in the settlement resulted from an independent installer of Brand-Rex products offering the travel tickets he received under Brand Breaks to an employee of one of his customers. The individual who ultimately received the tickets was in a position to influence decisions concerning cabling purchases, and employees of the company and related individuals used these tickets for vacations abroad in 2012 and 2013.
In announcing the settlement, Linda Hamilton, Head of the COPFS Civil Recovery Unit, noted that in cases where companies accept responsibility for their failure to prevent bribery and take steps to prevent reoccurrence, the UK Bribery Act permits prosecutors to settle those cases with a civil settlement, rather than criminal prosecution. The amount of the settlement was based on the third-party company's gross profit related to the misuse of the Brand Breaks program.