News about Baroness Michelle Mone and the covid PPE scandal is everywhere at the moment. Her company is said to have provided substandard PPE to the UK government. Baroness Mone is now being investigated by the National Crime Agency on suspicion of bribery.
I can’t tell you much about Mone or her involvement with PPE Medipro; but I can tell you all about bribery. Maybe you think it’s not important to you, because you’re not a Baroness with ties to substandard PPE? But, if you own a business that competes for work with others then it is something you need to know about.
What is bribery?
The Bribery Act 2010 tells us that bribery is promising some advantage to another person. The purpose of the promise must be to induce or reward another person for improperly performing a function or activity. It does not matter whether the function is improperly performed by the person receiving the advantage or by someone else. It also does not matter whether the advantage is given through a third-party.
That’s all pretty abstract so let us break it down with an example. We’ll use the film The Shawshank Redemption for our plot. Part way through the film, Warden Samuel Norton sends prisoners outside the prison to work on construction projects. The Warden’s prisoners are essentially slave labour, so he can undercut local builders who are also bidding for projects. A business rival offers the Warden a homemade pie, but inside the pie box is a large amount of money. The purpose of the money-pie is to persuade Warden Norton not to bid on an upcoming project.
Is the money-pie bribery? The competitor is giving Warden Norton an advantage – in this case a financial advantage in the form of cash (and a pie). So, we have stage one ticked off. The purpose of the money-pie is to persuade the Warden not to bid on a particular project. It appears from the film that one of the Warden’s functions is to select which projects the prison will bid for. So, it seems that part two of the test is also ticked off. We can see then that in The Shawshank Redemption, the competitor does bribe Warden Norton.
The advantage given or promised need not be cash. You could offer services or event tickets, e.g. FA Cup final tickets or even preferential treatment in a tendering process.
You should attention to the words used by the Bribery Act 2010, particularly the words “offer” and “promise”. Those are words concerning themselves with potential, not results. Thus, if an offer or promise is made there is no need for the police to prove that it was fulfilled! So, if you were bidding for local council works and offered the decision maker tickets to the Paris Olympics, you would commit the offence even if you reneged later.
Bribery offences
Offering or demanding a bribe
You’ll not be surprised to hear that it is an offence to bribe somebody else. Thus, if Georgina offers John £50k for John to choose her company over a competitor, then Georgina commits a bribery offence. Perhaps less obviously, is that John also commits an offence if he accepts Georgina’s offer. Again, he commits the offence upon accepting the offer even if Georgina never makes the payment.
John would also commit an offence if he were to ask for a bribe in exchange for the improper performance. It is irrelevant whether John is the person who improperly performs the function or whether it is done by somebody else. For example, John works for Oxfordshire Council and is responsible for awarding road maintenance contracts. John is married to Martha. Georgina agrees that she will pay Martha £50k if John awards the road maintenance contract to Georgina’s company.
In that example, Georgina commits an offence under section 1(1) of the Bribery Act 2010 by offering the payment. Martha commits an offence under section 2(2) by agreeing to accept the bribe. Interestingly, it is less clear whether John commits an offence. For our example we can assume he must be party to the agreement or else how will Martha earn her money? So, he would likely also commit and offence under section 2(4).
Failing to prevent bribery
An offence is also committed by companies that fail to prevent their employees bribing others for the company’s benefit. Sarah is the CEO of Big Oil Ltd, which wants the right to drill for oil in the North Sea. She knows Lucy, who works at the North Sea Transition Authority. Lucy holds a lot of sway over the assigning of gas and oil licences. Sarah offers Lucy £100k annually to give information about competitors bids and to make sure Big Oil Ltd is always a preferred company. We already know that Sarah and Lucy both commit offences. Big Oil Ltd also commits an offence by failing to prevent Sarah bribing Lucy. If Big Oil Ltd has adequate procedures to prevent bribery, it will have a defence.
Director and owner liability
Business owners and senior officers of companies should also be aware that they can be personally liable in some circumstance. In our Big Oil Ltd example, if Sarah bribes Lucy with the consent or connivance of other directors then each of them is also guilty.
Facilitation payments and hospitality
The Bribery Act has nothing to say on the question of facilitation payment or hospitality. On the face of the Act, it is easy to see any sort of hospitality as bribery. We can look at material from the prosecuting authorities to see how they say they will treat different situations.
Facilitation payments
These are payments made to ensure that somebody fulfils the duty they are already bound to do. Sometimes known as payments to grease the wheels. The aim could be to ensure that the official actually does what they are supposed to do. Or that they do it more quickly.
It’s worth reminding ourselves that even if made abroad such payments may fall foul of British bribery laws. You should also note that where you are accused of bribing a foreign official, there is no requirement for the prosecution to prove you intend the official to act improperly as there is with normal bribery offences.
You will have a defence if you can show that the payment is required by written law in the jurisdiction where the facilitation payment is made. For example, in the US state of Alabama, Constables hold all the powers of a police officer. They can be hired by individuals or businesses for certain tasks, such as serving documents or providing security at events. Thus, it would be a defence for a British company to pay a US Constable a facilitation payment to have them perform a duty.
The Serious Fraud Office has said that although facilitation payments are typically illegal, they will not be concerned about them if they do not form part of a larger pattern of bribery or corruption. You can read the Joint Prosecution Guidance produced by the SFO and Crown Prosecution Service for detailed information on how they approach prosecutions.
Hospitality
As with facilitating payments, the Bribery Act does not make exceptions for hospitality. That means that hospitality given to people with the intention of influencing them towards your business runs the risk of falling foul of the bribery laws. However, the SFO has made clear that their interpretation of the Act is that, “hospitality or promotional expenditure which is reasonable, proportionate and made in good faith is an established and important part of doing business. The Act does not seek to penalise such activity.”
The Ministry of Justice has also said, “combating the risks of bribery is largely about common sense, not burdensome procedures. The core principle it sets out is proportionality. It also offers case study examples that help illuminate the application of the Act. Rest assured–no one wants to stop firms getting to know their clients by taking them to events like Wimbledon or the Grand Prix.”
If your hospitality is reasonable and proportionate then you’ll have no problems. If it is excessive and lavish then you may have problems.
Defending bribery charges
The key to defending bribery allegations lies in undermining key parts of the prosecution case. For example, my proving that a payment was not intended to influence a decision maker but was paid for a legitimate reason, such as to settle an unrelated debt.
You might also argue that experiences given to people are legitimate hospitality rather than a bribe.
The defence deployed will always be specific to your case, so if you want to know more then call us on 020 8242 4496.
Penalties for bribery
I don’t plan to go through the sentencing in detail for every offence, because clearly much will depend on the facts. Broadly speaking, individuals may be sent to prison for up to ten-years and given an unlimited fine. Companies can be sentenced to an unlimited fine and banned from government procurement exercise.. In addition, directors may be disqualified from acting as a director for up to fifteen-years.
As always, our team of experienced criminal defence solicitors are standing by to help if you find yourself accused of bribery or any other criminal offence. Call us on 020 8242 4496 or send us a message via our contact page.