The Bribery Act 2010 (“the Act”) is due to come into force in April 2011. The UK’s current law in respect of bribery is a mixture of common law and statutory provisions and the new Act aims to reform and strengthen the existing legal position. This will have far reaching implications for the construction industry. The Act creates statutory offences of Promising or offering a bribe (section 1), Requesting, agreeing to receive or accepting a bribe (section 2) Bribing a foreign public official (section 6) A corporate offence of "failure to prevent bribery" by persons associated with a business (sections 7).

Who is caught?

Individuals associated with a company (i.e. persons who perform services for or on behalf of the company) are capable of being found guilty in respect of offences 1, 2 and 3. The capacity in which they perform the services does not matter. Employees, agents and subsidiaries are expressly stated to be potentially included. A significant change in the law from a company’s perspective is that a company could be found guilty for failing to prevent bribery without active involvement or awareness of the relevant activity. A defence is available where the company can demonstrate that it has adequate procedures in place to prevent bribery. Construction companies need to ensure that each employee/agent is aware of this new legislation and has appropriate procedures in place. A consultation recently took place with the aim of producing guidelines narrating what will constitute “adequate procedures”. It is envisaged that the actual guidelines will be published by January 2011. Overall, it will be the courts who will decide whether a company has “adequate procedures” in place and the onus will be on the company to prove such procedures exist.

What is considered to be “a bribe”?

A “bribe” is defined by reference to the offences under section 1 and section 6 of the Act. Notably, the offences are broadly defined and extend to both financial and other types of advantage. The promise or suggestion of a bribe is included as well as the act of actually giving a bribe. Bribes offered to persons performing functions in private businesses are caught, as well as public sector officials.

Are there implications for non-UK companies?

The Act applies to both UK and foreign companies who operate in the UK, even if an offence takes place in a third country and are unrelated to UK operations. Having a UK presence (subsidiary, office or operations) is enough to create the necessary jurisdiction. In practice, the criminal act can occur outside the UK, and the persons or companies in the UK can be found to be liable.

Penalties?

The Act will increase the maximum jail term for bribery by an individual from 7 years to 10 years. A company convicted of the section 7 offence under the Act (described above) is liable on conviction to an unlimited fine. However, no guidance has been produced to the courts on how to set fines. A company’s prosecution for a section 7 offence could also lead to the organisation being debarred from public contracts. The Act will have considerable implications for companies carrying out business in the UK and significant pressure is being applied on companies even before the Act comes into force with the need to ensure that they have appropriate anti-corruption procedures in place. Companies have already expressed concerns that they will be subject to a far stricter regime than that of their overseas competitors with opinions being voiced that this is perhaps the toughest legislation on the subject matter to be seen in any jurisdiction.