The Law Commission has published its final Report on reforming the laws against bribery. The aim of the Report is to set out a clear new direction for the regulation of the laws against bribery, by sweeping away the old patchwork approach of common law and statutory offences, and replacing them with legislation which deals with the two core issues of giving and taking bribes. The Report is the latest in a long list of attempts at reforming the laws on bribery, which has been a hot topic in the past few years.

The basic problem with the current law on bribery is that it is convoluted, outdated and inconsistent. The Report specifies four significant problems with the current law:

  • The fragmentation between the common law and statute;
  • There is a distinction between public and private sector bribery;
  • There are inconsistencies in the terminology and scope of the offences; and
  • The 'grey area' when an offence is committed abroad.

The 'grey area' is likely to be of most concern to corporate entities, given that much business is conducted on a global scale.

The Law Commission's Recommendations

There are four significant changes recommended.

1. The repeal of the common law offence.

2. The creation of two general bribery offences, which would be committed by the payer and the receiver of a bribe. Both offences can relate to past as well as to present conduct undertaken in connection with activities or functions of a public nature, or in connection with a trade, professional, employment or business activity, or an activity on behalf of a body of persons.

i. Giving bribes.

The basic element entails the giving, offering or promising of a financial or other advantage.

ii. Taking bribes.

The basic element is the requesting, agreeing to receive, or accepting such an advantage.

3. The creation of two further new offences:

  • the bribing of foreign public officials; and
  • the negligent failure of a public body to prevent bribery by an employee or agent.

4. The extension of the law of bribery to cover foreign nationals who live and/or do business in the UK.

Richard Alderman, the new director of the SFO, wants to encourage self-reporting by parties who think that they have discovered an irregularity which may relate to bribery and/or corruption.

Two general points

In addition to the four recommendations of the Law Commission above, it is also important to bear in mind the following:  

i) Secondary liability under the Proceeds of Crime Act 2002

A person will be liable for a money laundering offence if they acquire property which they know or suspect to be the proceeds of a crime. Therefore, if an individual or corporation commits a corruption offence (the crime), with the result that they benefit from the bribe 'paying-off', then they will be liable for any benefit they receive.

ii) Liability for incorrect accounting procedures

An attempt to hide corruption in the accounting records of (for example) a corporation can lead to liability under the Companies Act. This liability is secondary to the "corruption liability".