UK Bribery Act 2010: Future trends
July 25, 2016
By Victoria Murphy and Oliver Brooks
Since our last blog was published, there has been further development in respect of enforcement of the Bribery Act 2010 (UKBA) with the second deferred prosecution agreement (DPA) being approved. Before we look to the future, we briefly reflect on this development.
The new DPA: a sign of things to come?
There are limitations on our knowledge of the most recent DPA. Due to ongoing proceedings which deal with underlying offences, the company cannot currently be named. A redacted judgment was released on 11 July 2016 anonymising the company, referring to it as ‘XYZ Limited’ (XYZ).
We do know that the DPA concerns payments of £17.24 million relating to 28 implicated contracts. These offences were committed by intermediary agents within a particular jurisdiction offering to or placing bribes with those in a position to influence/control contracts. Interestingly, the implicated contracts include both post July 2011 offences under the UKBA and pre-July 2011 offences of conspiracy to bribe contrary to s. 1 of the Criminal Law Act 1977.
XYZ admitted that prior to 2012 it did not have adequate procedures in place. In a somewhat ironic twist to the tale, it was only when XYZ sought to redress those gaps that the bribes were uncovered. It would appear that XYZ was offered a DPA as a result of immediately self-reporting to the Serious Fraud Office (SFO) and working with them throughout the process. The full impact of this case will become clearer when the embargo on reporting the facts is lifted, at which point we will comment further.
The future of the UKBA
So what can we see in our crystal ball?
- More ‘section 7’ type offences? At the Anti-Corruption Summit: London 2016 in May, the then Prime Minister announced an intention to introduce further ‘Section 7 offences’ which would see corporates liable for the failure to prevent money laundering and fraud. With the failure to prevent the facilitation of tax evasion offence soon to hit the statute books, it is likely that we will see increased legislation focussed upon changing corporate behaviour modelled upon the UKBA. Further details can be found here.
- Will we ever see a contested case? One also has to wonder whether in today’s world of good corporate behaviour we are ever likely to see a trial for Section 7 UKBA offences. Given that two out of three cases to date have been dealt with by DPAs and the third was a guilty plea, it would appear that the SFO is unlikely to be instructing trial Counsel imminently.
- Early cooperation = softer approach? In the first DPA (see here), the penalties were based on the revenues earned on the contracts blighted by bribery. In XYZ, the starting point was the gross profits earned under such contracts. This favourable treatment is perhaps because of the immediate action that they took on discovering bribery (i.e. retaining a law firm to undertake an independent investigation and even making two further self-reports) or perhaps because of commentary following the first DPA suggesting that more financial leniency should be shown in DPAs. As a result, the future is likely to see more companies working with the SFO to ensure that they any breaches of UKBA are dealt with as favourably as possible.
Our final post in this series will address the most frequently asked questions in relation to the UKBA. There is still time to submit any questions that you might have via the text box below or by contacting one of the team.