The days of corporate hospitality and bestowing gifts may soon be over, as new government legislation looms large. 

The Bribery Act, due to come into force in this year (on a date yet to be decided) will affect businesses of all sizes, across all sectors.  The Act is the UK’s first major attempt to make bribery and corruption a civil, and potentially a criminal, offence.

The Act will apply to any company carrying out business in the UK, and can lead to charges of misconduct in a wide range of circumstances - from hospitality days such as golfing or horseracing, through to gifts like chocolates and champagne.  If these are offered as inducements then there is the possibility that they will fall within the offences contained within the Act.

There are three offences: general bribery; bribery of foreign public officials; failure of commercial organisations to prevent bribery. The only defence is if one can show that there are clearly defined and adequate procedures in place to prevent bribery.

Businesses should already be starting to prepare for this new anti-corruption legislation, and those businesses which continue to offer incentives should be assessing the procedures they have in place.  Hefty fines, and in the most extreme cases imprisonment, are all within the court’s power in the event that a business falls foul of the Act.

It is not just employers and directors who need to be aware of this legislation.  Employees, agents and anyone associated with the business need to realise that any breach of the Act by them can result in the business being held responsible for failing to prevent bribery.

In practical terms, the Act is likely to require most change by SMEs. Smaller businesses rely more heavily on networking to build relationships, which leads to the type of scenario where corporate bribery is commonly found.  Furthermore, it is common for large companies already to have in place the requisite policies and procedures, especially if they have dealt with businesses in the US where bribery legislation has been in place for some time. 

The government has said that it will publish substantial guidance: on the provisions of the Act; on implementing adequate procedures to prevent bribery; guidance for the prosecutors themselves.  It is hoped that issues with wide ranging application (such as those in relation to corporate entertainment) will specifically be addressed in the guidance, as many businesses rely heavily on the benefit of events such as fundraising dinners and charitable functions. However, the provision of such guidance is proving to be a slow process, and the current draft guidance does not offer much reassurance, as it cites general principles and case studies rather than definite lists of things which do and do not fall within the Act. 

Notwithstanding the inadequacy of this, what is clear is that all businesses will be subject to the Act, no matter how big or small. They need to start putting in place clear procedures and policies to prevent bribery, as well as training their staff and all those associated with them on what is involved. 

We at Hughes Paddison can advise your business on the policy it needs to put in place in readiness for when this far reaching change comes into effect.  Contact commercial lawyer Doug Armstrong who will be happy to advise and assist businesses to make sure in advance they are compliant.