- 07 April 2016
- Restructuring and insolvency
It was widely reported, earlier this month, that a Scottish company, Braid Logistics (UK) Limited, had agreed to pay some £2.2m to the Crown Office and Procurator Fiscal Service’s civil recovery unit by way of an agreed civil settlement, having accepted that it had obtained business through unlawful conduct.
What is very salutary in this case is that the company had apparently “discovered potentially dishonest activities” connected to two contracts in 2012, carried out an investigation which found that certain employees, without authorisation, had paid bribes in relation to those contracts in breach of the Act, dismissed those involved and voluntarily self-reported the case to the Crown Office.
And yet, despite what appears to be an exemplary response, the company had to pay a very significant sum to the authorities.
The issue here, and what led to this payment, is that the company accepted (and for many other companies, this may well be a case of “There but for the grace of God…”) that it had failed in its responsibility to prevent the bribery happening, thereby accepting responsibility for a contravention of Section 7 of the Act. Under this section, a company is guilty of an offence if a person associated with it (which can be an employee, agent or subsidiary) bribes (within the meaning of sections 1 and 6 of the Act) another person, intending to obtain or retain business or a business advantage for the company. There is a defence, but only if the company can show, on balance of probabilities, that it had in place adequate procedures designed to prevent bribery.
To be capable of being “adequate” on balance of probabilities, these procedures must be reviewed regularly, rigorously and at senior level to ensure that they continue to be fit for purpose, and changed and publicised if not. Given the potentially huge reputational and financial risks involved, compliance with the Act, which is still a relatively new obligation, cannot be done as a simple “tick the box” exercise and needs to be treated on the same footing, and with the same degree of attention, as, for example, the much more long-standing health and safety obligations which companies have.
The company had to pay a very significant sum to the authorities
As an organisation grows, develops, moves into new jurisdictions, changes its ways of doing business and those it interacts with do likewise, it should adopt and apply a dynamic risk assessment approach to bribery, analogous to that used by emergency services which is “a continuous process of identifying hazards, assessing risk, taking action to eliminate or reduce risk, monitoring and reviewing, in the rapidly changing circumstances of an operational incident”.
Braid Logistics (UK) Limited’s group FD commented: “I would like to assure our customers that we now have emerged stronger from this incident with more robust processes and procedures in place throughout the group”. We wish them well, and hope that what has happened in their case will now help and encourage other companies to avoid similar action.
About this article
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SubjectBribery Act 2010 bites…….
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Author
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Expertise
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Published07 April 2016
Disclaimer
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About this article
-
SubjectBribery Act 2010 bites…….
-
Author
-
ExpertiseRestructuring and insolvency
-
Published07 April 2016