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23 July 2013 0 Comments
Posted in Corporate & Commercial, Opinion

The Bribery Act – The first convictions

Author headshot image Posted by , Partner

On 1 July 2011 the Bribery Act 2010 (the Act) came into force. The Act is a significant piece of legislation which no company doing business in the United Kingdom can afford to ignore.

The practical effect of the Act is that it obliges any business operating in the United Kingdom to review its policies and business procedures to ensure that it is not dragged into costly and potentially damaging bribery proceedings.  The Act applies to businesses which are incorporated in the UK and businesses incorporated overseas with activity on the English market. The Act carry strict sanctions such as fines which can be unlimited.

The Act sets out 4 offences as follows:

  1. bribing another person;
  2. being bribed;
  3. bribing a foreign public official; and
  4. a corporate offence of failing to prevent bribery (“The Corporate Offence”).

Since the Act came into force it has been subject of intense discussion how the courts would interpret issues such as the “Corporate Offence”, “adequate measures” and the “territorial effect” of the Act.

Even though the courts have not delivered any rulings on the above, the courts have had the opportunity to look at matters involving the Act. I will set out below a short summary of the rulings which the courts have delivered until now.

  1. Mr Patel – the court clerk

Mr Munir Patel was a court clerk at Redbridge Magistrate’s Court.  Mr Patel had for approximately a year accepted £500 from various traffic offenders in return for not adding the details of their traffic offences to the court’s records.  Mr Patel was caught by a journalist who filmed Mr. Patel’s dealings after the journalist had received tip of Mr Patel’s activities

Mr Patel was sentenced to 6 years imprisonment in November 2011. This was reduced to 4 years on appeal.

  1. Mr Mushtaq –  the driving examinee

The second to be convicted under the Act is a Mr Mawia Mushtaq. He was  successfully prosecuted under the Act for offering (as opposed to receiving a bribe).  He had failed a driving test before an Oldham Council licensing officer. Passing the test was necessary for Mr Mushtaq to obtain a taxi licence. Mr Mushtaq offered £200 which was later increased to £300 if the result of the test was changed to a pass.  The officer refused the bribe and the matter was reported to the police.

In December 2012 Mr Mushtaq was sentenced to 2 months imprisonment, suspended for 12 months but subject to a curfew order.

  1. Mr Li – the university student

The third person to be convicted under the Act was a Mr Yang Li.  Mr Li was a masters student at the University of Bath. Mr Li had handed in an essay which he was awarded a 37% mark for. The pass mark was 40%.  Mr. Li offered £5,000 in cash to the professor in exchange for the professor increasing the mark to a pass mark. However, the professor refused the money. During the discussion between Mr. Li and the professor, Mr Li dropped an imitation firearm on the floor.

Mr Li was in April 2013 jailed for 12 months (both for the attempted bribery and for possession of an imitation firearm). In addition, Mr Li was ordered to pay £4,800 in costs.

Conclusion

Even though the courts did not shed any light over issues such as the Corporate Offence etc, it is possible to make some conclusions about the courts attitude to bribery.

First, when presented with cases, where bribery has occurred, the courts shows no hesitation in applying the Act.

Secondly, it seems that, following a successful prosecution under the Act, a custodial sentence is likely to be inevitable.  A plea in mitigation is likely to focus on obtaining a suspended sentence.

Thirdly, the cases reinforce that there is no de minimis requirement under the Act.

It remains to be seen how the courts will interpret issues such as the “Corporate Offence”, “adequate measures” and the “territorial effect” of the Act. Some have voiced surprise that we have not already seen plenty of cases from the corporate world. This is hardly surprising as matters involving bribery relating to the commercial world are very difficult to investigate.

It would be wrong to assume that the apparent lack of cases under the Act is a sign that the authorities do not take this area serious. In fact, according to press reports the first matters involving the Act are beginning to filter through the system.

In addition, there are many prominent companies which currently are facing investigations in various jurisdictions concerning issues relating to bribery and corruption allegations. Most notably, GlaxoSmithKline have had to address certain issues involving corruption in China as it appears that executives from GlaxoSmithKline have acted outside of GlaxoSmithKline’s processes and controls breaching Chinese law.

Therefore, companies and businesses with activity in the United Kingdom would be well advised to make sure that they have an anti-bribery policy and implemented adequate measures designed to prevent bribery, as such a policy and such measures could prevent the companies or the businesses from being met with any of the above mentioned sanctions.

If you have any comments on this blog please contact Claus Andersen, Partner for  Corporate and Commercial on 020 7583 2222 or cka@royds.com

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