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Miller Samuel Hill Brown Solicitors Blog

From time to time we will post news articles and announcements relating to the firm and to various legal issues that may be of interest to you.

Successful Conviction Under The Bribery Act Provides Warning For Companies

Recent news headlines have surrounded the political consultancy firm, Cambridge Analytica, regarding its alleged influencing of the 2016 Presidential elections and the Brexit referendum through Facebook user data. It has also been suggested that bribery may have been used to smear opponent politicians. Cambridge Analytica have denied these allegations and have issued a statement advising that the news story has grossly misrepresented the conversations it has with client, confirming that they comply with the guidance laid out in the Bribery Act 2010.

With such allegations of bribery, there may well be consequences for Cambridge Analytica. The provisions within the Bribery Act 2010 set out the various offences which commercial organisations should be aware of. Under section 1 of the Act,  the offence of bribery is defined as the giving or offering of a financial or other benefit to an individual with the purpose of influencing that person to act in an improper way.

The Bribery Act also created a new offence in section 7 - the failure of a commercial organisation to prevent bribery. Under section 7, commercial organisations will be guilty of an offence if a person associated with the organisation bribes another person for the purpose of obtaining business for the commercial organisation. In essence, a company can be guilty of an offence if it doesn’t have sufficient measures in place to ensure that staff or other related individuals don’t commit the offence of bribery. If the organisation in question can prove that it had adequate measures in place to prevent bribery from taking place then they will have a valid defence under section 7.

The first successful prosecution of a company under section 7 of the Bribery Act was reported in the recent case of R v Skansen Interiors Limited and provides some guidance on the application of this new offence. The company in question, Skansen Interiors Limited, were a relatively small company of around 30 employees. The company was convicted following the conduct of its former managing director who made bribes to win contracts for the company. After discovering the bribery that was taking place, it self-reported the illegal conduct to the authorities and prevented the largest bribe from taking place. Despite the precautions taken, Skansen Interiors were convicted under section 7 for failing to prevent bribery.

By the time the case came before the courts, Skansen Interiors Limited appeared to be no longer trading. Therefore the court could not impose a financial penalty and the only sentence that was appropriate was an absolute discharge.

What is surprising about this case is that Skansen Interiors had taken active steps to try and prevent bribery by having anti-bribery policies in place, reporting the conduct etc. however the court ruled that this simply was insufficient to meet the standards of the Bribery Act. 

This case serves as a warning to companies, both large and small, that the Bribery Act should be seriously considered by business owners. When the Bribery Act was introduced, the government issued guidance on what measures companies should be taking to ensure compliance with the act. The guidance makes a number of recommendations including: implementing bribery prevention policies and procedures that are proportionate to the bribery risks faced by the organisation, ensuring risk assessments are carried out regularly to assess the internal and external risks, training employees on the threats posed by bribery and the regular monitoring and review of anti-bribery procedures.

This case sends a clear message that companies will need to have robust anti-bribery measures in place in case they are ever required to avail themselves of the defence under section 7.

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