The Bribery Act 2010 - What do you need to do?

Mairead McErlean at Geoffrey Leaver Solicitors looks at what steps businesses should look at taking in the coming months to prepare for the Bribery Act coming into force in April 2011.

It has been announced that The Bribery Act 2010 will come into force in April 2011. If there was any doubt about whether a brown paper envelope was still a tool of any trade, this Act banishes that doubt.

Under the Bribery Act, a person (P) is guilty of an offence where they offer, promise or give a financial advantage to another person in two cases:

• Case one, where P intends the advantage to bring about an improper performance of a relevant function or an activity by another person or to reward such improper performance.

• Case two, where P knows or believes that the acceptance of the advantage offered, promised or given, in itself constitutes the improper performance of a relevant function or activity.

"Financial or other advantage" is not defined.

Businesses have expressed concern because where a person such as an employee is guilty of an offence under the Act with the intention of obtaining or retaining business or a business advantage for his or her employer the business itself can also be found liable. The offence can be committed in the UK or overseas.

It is a defence if it can show that it had in place adequate procedures designed to prevent bribery.

This has led some to question how the more subtle inducements or tokens of appreciation to clients may be viewed? Could that dinner for your client and his wife at a Michelin starred restaurant be a bribe? Or what about the 3 day trip to New York for a one hour meeting, complete with first class flights, 5 star hotel and tickets for a Broadway show? When will the line between marketing cross into bribery?

The Government plans to launch a consultation in September on guidance to be provided to commercial organisations about procedures which can put in place to reduce the risk of either the corporate entity or associated individuals from committing the offences introduced by the Act. It is proposed that the results of this consultation will be published early in 2011 to allow businesses an adequate period of time to familiarise themselves with the procedures before the legislation comes in to force.

What should businesses do?

Businesses will need to ensure that they have a policy and procedure in place which should make it clear what is acceptable marketing activity and what exceeds that and as such may be interpreted as a bribe. Adequate procedures are likely to vary between organisations. They will be dependent on the size of the organisation and the business that organisation is engaged in, but they will apply to every business, no matter how small.

Organisations will need to be able to demonstrate that they both have a procedure in place and that every person at every level of the organisation is aware of it and complies with it. Businesses should therefore look at updating their employee handbooks with such a procedure.

If you would like to discuss the issues raised in this article or if you would like to discuss reviewing your staff handbook please contact Mairead McErlean or Stuart Snelson respectively by email or telephone 01908 692769.