Blog

9 March 2018

A Bribery Act prosecution “pour encourager les autres”

Categories: Blog, Bribery and corruption, Financial Crime,

cb-web__0016_peter-bowels_6776_final-jpg

Categories: Blog, Bribery and corruption, Financial Crime,

Categories: Blog, Bribery and corruption, Financial Crime,

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Categories: Blog, Bribery and corruption, Financial Crime,

Categories: Blog, Bribery and corruption, Financial Crime,

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Categories: Blog, Bribery and corruption, Financial Crime,

Categories: Blog, Bribery and corruption, Financial Crime,

Categories: Blog, Bribery and corruption, Financial Crime,

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Categories: Blog, Bribery and corruption, Financial Crime,

Categories: Blog, Bribery and corruption, Financial Crime,

Categories: Blog, Bribery and corruption, Financial Crime,

By Sangeeta Bedi

Categories: Blog, Bribery and corruption, Financial Crime,

Categories: Blog, Bribery and corruption, Financial Crime,

Categories: Blog, Bribery and corruption, Financial Crime,

Categories: Blog, Bribery and corruption, Financial Crime,

Categories: Blog, Bribery and corruption, Financial Crime,

Categories: Blog, Bribery and corruption, Financial Crime,

Categories: Blog, Bribery and corruption, Financial Crime,

Categories: Blog, Bribery and corruption, Financial Crime,

Categories: Blog, Bribery and corruption, Financial Crime,

Categories: Blog, Bribery and corruption, Financial Crime,

Categories: Blog, Bribery and corruption, Financial Crime,

Categories: Blog, Bribery and corruption, Financial Crime,

Categories: Blog, Bribery and corruption, Financial Crime,

Categories: Blog, Bribery and corruption, Financial Crime,

The somewhat needless and arguably unprincipled prosecution of a small refurbishment contractor in the case of R v Skansen Interiors Limited resulting in an absolute discharge is another example of small companies being the easy targets for prosecutors seeking to test the boundaries of new corporate criminal offences. The same thing happened in the health and safety enforcement sphere when the new law on Corporate Manslaughter was brought in. There have yet to be any prosecutions of major companies, but smaller ones have made easy meat. In the Bribery Act sphere, some very large companies have been the subject of Deferred Prosecution Agreements while other, particularly smaller ones, have been prosecuted.

A jury verdict never gives reasons for the decision to convict and the result leaves a great deal of uncertainty about how both the CPS and the SFO will apply the Deferred Prosecution Agreement (DPA) guidance in future cases where a company has demonstrably self-reported and fully co-operated with an investigation.

Skansen, a tiny contracting company with 30 people working in an open plan office no bigger than a court room, was dragged to the quarter deck of Southwark Crown Court and duly put on trial before a jury on a charge of failure to prevent bribery under section 7 of the Bribery Act, the first contested trial of this offence since the Act came into force in the summer of 2011.

Yet, like Admiral Byng, Skansen was being prosecuted despite doing its “utmost” after the offending was discovered to bring itself within the guidance applicable for a DPA. There is no dispute about the underlying predicate offence of bribery, whereby improper payments of £10,000 were made to subvert a tendering process and secure a £6 million contract. A further payment of £29,000 was stopped by the company under its new Chief Executive. Faced with evidence of suspicion on arrival at the company, the new Chief Executive ordered an internal investigation, established new Bribery Act compliance procedures and, following the dismissal of the individuals involved, made a suspicious activity report to the NCA and asked the City of London Police to investigate.

Although the company had limited compliance procedures when the bribery offences were committed and no specific Bribery Act procedures, it did have guidance on ethical dealings with third parties and a culture in which there was an expectation of honest dealing and financial controls in place to prevent inappropriate payments. The main individual involved in the offending was specifically aware of the need to avoid corrupt conduct.

The judge rightly questioned why the prosecution was being brought against a dormant company against whom it was agreed that no financial penalty could be imposed and the only sentence could be an absolute discharge. The CPS declared that the public interest test for a prosecution was satisfied so that a message could be sent to others in the industry. The CPS further decided that no ongoing benefit could be achieved by a DPA.

The decision to prosecute a company in these circumstances is open to question because many of the factors militating against prosecution in the Joint Guidance on Corporate Prosecutions applied in this case. The jury’s verdict on its own does not determine the standard of adequacy of compliance procedures for the purposes of the Bribery Act; it has no value as a precedent in that respect.  Prosecutors would have been better advised to wait for a more obvious case meriting criminal sanction.

Peter’s comments regarding this were also published in an article in GIR and can be accessed here

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