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Parliament introduces tough new bribery legislation

7.07.2010

On 8 April 2010 Parliament passed tough new Bribery legislation that could leave construction and other firms open to bribery charges.

The legislation, which will be introduced in stages over the summer and autumn, provides a modern and comprehensive scheme of bribery offences to allow the Courts to deal more effectively with bribery in the UK and abroad.

The Act replaces old and fragmented legislation and creates:

One example of a possible breach could be corporate hospitality of the wrong kind.  If, for example, most of your hospitality is directed towards one person, with the intention of inducing that person to perform a relevant function or activity improperly, or to reward him for doing so, then you may be in breach.

Construction firms, and all other commercial organisations, will have a defence if they can show that ‘adequate procedures’ were in place to prevent bribery, but the legislation does not provide any definition of what would constitute ‘adequate procedures’.  The Act will be accompanied by further detailed guidance, expected to be published in the autumn.

The practical consequences for all commercial organisations, including construction firms, are that they must prohibit bribery in any form, either direct or indirect, and commit to implementing systems to counter bribery.  This must be the culture of the organisation.

Firms should put in place staff training and ensure that written procedures are available to staff and contracted consultants.  Firms should also consider amending contracts of employment to provide for termination in breach of compliance with the internal anti-corruption and bribery procedures.  Consideration should also be made for including clauses in the organisation’s commercial contracts that replicate the clauses prohibiting bribery commonly used in public sector contracts.  It is also recommend that appropriate checks are carried out during the processing of payments and prepare a plan to deal with any allegations of bribery.

The Act carries tough penalties including imprisonment and unlimited fines.

For more information on the Bribery Act please contact David Brown at Gullands by email:  [email protected]

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