Bribery Law Update

11 October 2013

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The Bribery Act 2010 (the “Act”) came into force on 1 July 2011, and was anticipated to cause significant changes in how businesses carried out their corporate hospitality. The main prosecutor in relation to offences under the Act was expected to be the Serious Fraud Office (the “SFO”), and considerable interest was generated regarding the offence under s7 of the Act, which dealt with the failure of a commercial organisation to prevent bribery committed by a person associated with the organisation. However, the Act has faced significant criticism in its short life, largely due to the very small number of convictions and the complete absence of a conviction under s7. Over two years on, there have been only 3 convictions under the Act, all against individuals, and all brought by the Crown Prosecution Service rather than the SFO.

The first conviction involved Munir Patel, a court clerk, who was convicted under section 2 of the Act for offering to remove a driving offence from the legal database in return for a payment by the defendant of the sum of £500. After further investigation, it was discovered that Patel had actually requested and accepted 53 similar bribes. He was sentenced to 6 years for misconduct in public office and 3 years’ imprisonment for bribery, to run concurrently. This was subsequently reduced to 4 years.

The second conviction concerned Mawia Mushtaq, a driving test examinee for a private hire taxi licence, who had previously failed the same test. On learning that he had once again failed the test, Mushtaq attempted to bribe the examiner by offering to pay him £200 or £300 for a pass. The bribe was refused and reported. Mushtaq was convicted under s1 of the Act and sentenced to 2 months imprisonment, suspended for 12 months, and a 2 month curfew order for the hours between 6pm and 6am.

The third and final conviction was against a university student, Yang Li, studying for a masters degree in the University of Bath. On being awarded a mark 3% short of a pass in his dissertation, Yang Li arranged a meeting with his tutor and presented him with £5000 in exchange for a pass mark. The tutor refused and as Yang Li left, an imitation firearm fell out of his pocket. In April 2013, Yang Li was convicted of bribery under s1 of the Act, and possession of an imitation firearm. He was sentenced to 12 months imprisonment and ordered to pay £4,880 costs.

While these convictions have shown the Act in action, they have not involved the SFO, or proven useful to those hoping for guidance on the s7 offence by commercial organisations. However, in August 2013, the SFO brought their first charges under the Act. Four men associated with Sustainable AgroEnergy plc were charged with a number of offences including conspiracy to commit fraud, and making and receiving financial advantages under Sections 1(1) and 2(1) of the Act (although the Bribery Act charges have only been brought against three of the four individuals). This was in connection with the promotion and selling of bio fuel investment products to UK investors. The trial commenced at Westminster Magistrates’ Court on 23rd September 2013. The men returned to court on 7th October 2013. The outcome of the SFO’s first charges under the Act is eagerly awaited.

Although these charges still do not show s7 of the Act in operation, they do mark a step forward for the SFO in bringing its first charges, and suggest that they may be more active in this regard in the future. David Green QC, Director of the SFO, stated at the Cambridge Symposium in September 2013 that the SFO currently has eight Bribery Act projects on their books. At this event, Green also suggested the possibility of extending s7 of the Act, so as to create a corporate offence where a company fails to prevent crimes of dishonesty or fraud by its servants or agents, which would be subject to a defence of adequate procedures.  This all suggests we may be seeing a lot more from the SFO in relation to the Act, and there may be significant steps taken with regard to the offence by commercial organisations. This should serve as a reminder to commercial organisations that any discrepancies in their procedures could very soon be in the spotlight, and now is the time to ensure they are in compliance with the Act.

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