First conviction: s7 Bribery Act 2010
Under section 7 of the Bribery Act 2010 it an offence for corporate bodies to fail to prevent bribery by their employees, agents or associates. The corporate body may have a defence if it can demonstrate that it had adequate procedure in place to prevent bribery.
In December 2015, the Sweett Group plc (“Sweett”) was charged with an offence under section 7 of the Bribery Act. Sweett is a company in the business of providing professional services to the construction industry. It was accused of failing to prevent the bribing of an individual in relation to the securing of a contract for the provision of services relating to the building of a hotel in Abu Dhabi.
In February 2016 Sweett was sentenced to (i) a £1.4 million fine; (ii) £841,152 in confiscation (i.e. a sum representing the benefit received from the offence); and(iii) £95,031 in costs.
Of note in the proceedings were the following matters:
- Sweett did not have adequate procedures in place to prevent bribery and could not meet the requirements of the statutory defence to an allegation of failure to prevent bribery.
- It had failed to act on internal reports dating back to 2011 indicating that systems and controls for identifying bribery was not adequate.
- Sweett attempted to conceal the bribe.
- It did not cooperate with the Serious Fraud Office (“SFO”) in relation to the investigation of the allegations of bribery.
Where a corporate entity accused of bribery self-reports to the SFO, cooperates with it and meets other SFO conditions, this may result in the case being concluded by a Deferred Prosecution Agreement (“DPA”) rather than formal prosecution. A DPA allows a prosecution to be suspended for a defined period and enables a corporate body to make full reparation for criminal behaviour without incurring the time and costs wasted by a trial (by all parties involved) or the collateral damage of a conviction (for example sanctions or reputational damage that could put the company out of business, destroy jobs and the investments of third parties).
It would appear that a DPA was not available to Sweett given the conduct noted above. Whilst a DPA may limit reputational damage, it does not appear that entering into a DPA will lead to any reduction in any fine or financial reparation that is due.
The section 7 offence is controversial as it makes corporate bodies liable for failure to prevent bribery rather than being complicit in bribery. This first conviction makes it clear that the risk of liability is real and will be enforced. It is a reminder that having adequate procedures in place to prevent bribery is worthwhile and in an employer’s interests.
For further information on the issues raised in this article, please contact us on 020 7925 8080 or by email at email@example.com
+44 (0)20 7925 8080