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Simon Ellis

Hill Dickinson

Commercial Litigation Solicitor

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Legal Insight: The implications of the SFO’s latest Bribery Act guidance


Since becoming director of the UK’s Serious Fraud Office, David Green has not wasted time. 

The honeymoon period that, under the previous director allowed for self-reporting in relation to corruption and bribery, is over.
As one commentator put it: “There will be no more chats with the SFO over coffee and biscuits.” But what does this situation mean for employers? If they face a bigger risk of prosecution, will they need to change their bribery compliance procedures? And what is the Bribery Act 2010 all about anyway?
Essentials of the Bribery Act 2010
The Act:
  • Makes it a criminal offence to give or offer a bribe, or to request, offer to receive or accept a bribe, whether in the UK or abroad (the measures cover bribery of a foreign public official and make it illegal to offer a facilitation payment – basically a bribe to “grease” palms when making a decision, application or so forth)
  • Makes it an offence for a director, manager or officer of a business to allow or turn a blind eye to bribery within the organisation
  • Introduces a “corporate offence” of failure to prevent bribery by persons working on behalf of a commercial organisation.
Employers do have a defence against prosecution if they can show that they have “adequate procedures” in place to prevent bribery, however.
What constitutes an “adequate procedures” defence?
The government has indicated that it expects “commercial organisations” to take a proportionate approach in implementing procedures to tackle the bribery risks that they are likely to encounter.
“Adequate procedures” should include a detailed consideration of potential risk areas and the creation of policies and practices tailored to fields of particular risk in order to reduce the likelihood of bribery taking place.
The board should also evaluate and approve any anti-bribery protocols that are developed and ensure that such policies and practices, including staff training on bribery risks and the organisation’s anti-bribery policy or procedures, are implemented properly.
What are the potential penalties for failing to comply with the Act?
The penalties for breach of the Bribery Act are potentially very severe. There is no upper limit on the level of fines that can be imposed. An individual convicted of an offence faces a prison sentence of up to 10 years.
In addition, profits may be recovered under proceeds of crime legislation in those situations where business has been obtained illegally.
If a staff member is proved to have committed a bribery offence with the consent or connivance of a director, manager or other similar person, that individual (as well as the business) is likewise guilty of the offence and liable to be prosecuted and fined or jailed accordingly.
What the SFO’s revised statements of policy mean
Although the SFO website now includes three revised statements of policy on facilitation payments, business expenditure and self-reporting, the substantive law has not changed. The guidance covers:
  • Facilitation payments (for example, where a government official in the UK or overseas is given money to perform, or speed up the performance of, an existing duty)
  • Bona fide hospitality or promotional/other legitimate business expenditure, which it recognises as an established and important part of doing business, but not if it is a disguised bribe
  • Self-reporting of offences, which is still encouraged. However, leniency is not guaranteed and the proceeds of crime legislation as well as civil recovery claims remain risks, even if there is no prosecution.
What must HR directors do to conform to anti-bribery legislation?
HR professionals have a key role to play in:
  • Obtaining the approval (or working with others who can obtain it) of the Board to introduce anti-bribery policies and procedures
  • Ensuring that anti-bribery policies and procedures are filtered down to staff, agencies, consultants and other workers in the organisation
  • Drafting or amending relevant documentation. This point is considered in more detail below.
HR directors should also consider the following issues and questions:
  • Although penalties are available in law for corrupt practices, an employer must also clearly set out sanctions for unethical and corrupt behaviour in its disciplinary procedures. Do your procedures currently do this?
  • Do you need to amend your recruitment procedures to make them transparent and as free as possible from the risk of a claim that “X” got his job through a corrupt action such as a payment to a manager?
  • As awareness grows of “corporate ethics” as an area of possible risk, so the emphasis grows on including questions about ethical decision-making and judgment in the recruitment process, which many companies are increasingly doing. But while some ethical questions such as “Would you take a bribe in this situation?” are clear-cut, others have no easy answer. Because they warrant difficult decisions, however, they can be helpful in giving you an idea about the candidate’s honesty.
  • Are you planning to add an anti-bribery policy to the organisation’s employee handbook and intranet, which will be brought to the attention of staff and highlighted in your “new starter” induction process?
  • Are your record retention procedures adequate? Record retention is an important aspect of Bribery Act 2010 compliance. For example, an employer may be asked by the courts to demonstrate that it has implemented and enforced “adequate procedures”. In doing so, it must be able to show, for instance, that all employees received anti-bribery training at their induction this year, which includes providing names, the date on which the training took place and the results of any examinations/tests.
  • Have you considered providing staff training using e-learning and/or a presentation to ensure that personnel are aware of the firm’s anti-bribery-policy? Some companies require middle and senior managers to sign an annual specific undertaking to abide by these laws and policies, with bonuses and performance-related pay being contingent upon such compliance.
  • Do you require a whistleblowing policy (or should you create one) that makes specific reference to bribery?
  • Have you considered adding bribery training/compliance to your criteria for appraisals?
  • Are your managers properly trained in spotting and dealing with bribery issues relating to their staff and department? Do they know what to do if a problem is discovered? How quickly should they report it? Who makes the decision to report an incident and to whom?
These questions may raise difficult issues, but HR should at least understand and decide upon the approach to be taken as the ramifications for individuals and the business of failing to do so are serious.
What should an HR director do if bribery is suspected/reported?
If not already in place, introduce a notification policy to ensure that a director or senior manager is informed of any issues so that they can make a preliminary evaluation of the seriousness of the matter.
If the matter is found to be serious, appoint external solicitors to carry out an investigation. This approach has two benefits:
  1. If regulatory authorities become involved, an employer’s willingness to engage outside solicitors will assist in convincing them that the reasonable precautions principle is being given priority
  2. Allegations of bribery are often linked with competition law questions. The European Court of Justice has determined that legal professional privilege does not apply to in-house counsel in competition law cases.
Concluding checklist
  • Ensure that board level support for introducing and enforcing anti-bribery polices is obtained
  • Undertake a rigorous bribery risk assessment or audit
  • Review existing procedures and written policies and update them if necessary
  • Train staff in anti-bribery procedures
  • Monitor procedures and policies and be prepared to adapt to changing circumstances or bribery threats
  • Have a strategy in place for investigating/taking advice on/reporting issues should they arise.

Simon Ellis is a solicitor in law firm Hill Dickinson‘s commercial litigation team.

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Simon Ellis

Commercial Litigation Solicitor

Read more from Simon Ellis

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