The Bribery Act 2010: When is an advantage a disadvantage?

Failure to have in place anti-corruption policies and procedures will expose businesses to a potential automatic liability for bribes paid on their behalf. Such liability will be criminal, rather than civil.

The consequences, aside from damaged reputation from adverse publicity, may be an unlimited fine and confiscation of all the income related to the business achieved through the bribe. There is also the prospect of a maximum of 10 years imprisonment.

The new Act replaces law that was fragmented and old, dating back to before the First World War. The new offences take effect in April 2011.

Whilst the Act brings into focus the criminal aspect and the consequences, Directors will be aware that they can still be exposed to a civil liability for knowingly being involved in wrongdoing or indeed adopting a Nelsonian approach.

For such, management activity and process will be relevant to how one can resolve such issues and deal with their consequences.


General offences have been created covering the offering, promising or giving of an advantage and the requesting, agreeing to receive or accepting of an advantage.

A commercial organisation faces an offence of failure to prevent a bribe being paid for or on its behalf – subject to defences of adequate procedures.

Corporate hospitality has been, and continues to be, the oil to the wheels of many business sectors. Whilst the level and type of activity varies depending on the state of the economy, it is always there in one form or another. The Government recognised that it is an accepted part of modern business and they do not seek to penalise for legitimate commercial purposes, but make clear that lavish hospitality can be used as a bribe to secure advantages. As such, the offences are designed to penalise those who overstep the mark.

The Director of the SFO said that most routine and inexpensive hospitality would be unlikely to lead to a reasonable expectation of improper conduct.

The test is what a reasonable person would expect in relation to the performance of the type of function or activity. The question of advantage is to be determined by the Court as a matter of common sense.

What is expected of a person performing a function or activity is what a reasonable person in the UK would expect of a person performing that function or activity.

The recipient of the advantage may commit an offence even if they only agree to receive it. It is not simply the giving of the advantage that falls foul of the new Act.

The concern of the Government was to prevent bribery from destroying the integrity, accountability and honesty that underpins ethical standards in public life and the business community. The review of the legislation has deliberately criminalised bribery.

It enables UK markets to be seen to take seriously corruption, with a view to reducing bribery worldwide.

It is essential that management of businesses communicate to their people the principles of the legislation as well as the impact and potential impact.

The focus may well be aimed at the presence of UK PLC on the global stage.

However, UK businesses now find themselves needing to take a robust look at their systems and to determine whether changes need to be made, to ensure best practice is in place well before the spring of 2011 is upon us. Hopefully, this will help prevent an advantage becoming a serious disadvantage.

For more detail, please contact  Simon Thomas of the Professional Indemnity Group.