Bribery Act 2010 & Corporate Hospitality

17 September, 2010

This article reviews the key provisions of the Bribery Act 2010 and issues to consider, in particular in relation to corporate hospitality.


The Bribery Act 2010 is intended to bring the UK into line with international best practice for anti-corruption legislation, and replaces the existing patchwork of anti-corruption laws. Its scope is extremely wide-ranging, and this has led to concerns that activities perceived as legitimate – such as corporate hospitality – could become illegal when the Bribery Act comes into force (now expected to take place in April 2011).


What are the offences?

The Bribery Act creates four separate offences:
1 Bribery of another person;
2 Being bribed by another;
3 Bribery of foreign public officials; and
4 Failure of a commercial organisation to prevent bribery.


What is bribery?

“Bribery” is defined broadly to cover any financial “or other” advantage offered, promised or given by one person to another, where the intention is to induce or reward someone to perform improperly a “relevant function or activity”. “Relevant function or activity” includes not only functions of a public nature, but any activity connected with a business or performed in the course of a person’s employment. So the Act does not only apply to bribing public officials: cash or other benefits provided improperly in a purely commercial, “business to business” setting could also be caught.


The bribery need not take place in the UK: bribery committed abroad, whether by the company itself or its agents or other representatives, will also be caught – even if the actions involved are legal in the country where they take place. This has led some to argue that UK businesses will be placed at a disadvantage in some countries where bribes (or “facilitation payments”) are a routine part of business.


What are the penalties?

Individuals convicted of bribery offences could face up to ten years’ imprisonment and/or an unlimited fine. A director convicted of a bribery offence could also be subject to a director disqualification order under the Company Directors Disqualification Act 1986 which could prevent the individual from being a company director for up to 15 years.


Companies convicted of having failed to prevent bribery are exposed to an unlimited fine. The courts have indicated that they view bribery as an extremely serious offence which would not be viewed lightly when assessing the level of fines.


Failure to prevent bribery

The Act criminalises a commercial organisation’s failure to prevent bribery. The organisation, whether a company or a partnership, is guilty of an offence if an associated person (that is, someone who performs services on behalf of the commercial organisation) bribes another person intending to obtain or retain business or a business advantage.


This offence is “strict liability”, with no requirement to prove that the organisation either knew that bribery was occurring or condoned their representatives’ actions.


“Adequate procedures”

An organisation accused of failing to prevent bribery will have a defence if it can show that it had “adequate procedures” in place designed to prevent bribery. The Secretary of State is required to produce guidance on the sort of procedures that a commercial organisation can put in place to use as a defence to a claim bought under the Act. Draft guidance is expected to be published in September for consultation, with the final guidance due in the new year so that companies have time to prepare before April 2011.


What does this mean for corporate hospitality?

The potential scope of these offences under the Act is extremely wide, and could even catch some forms of corporate hospitality where the intention is to induce the recipient of that hospitality to “perform improperly” their role within their business.


The Director of the Serious Fraud Office has stated that “most routine and inexpensive hospitality would be unlikely to lead to a reasonable expectation of improper conduct”. However, lavish or extraordinary hospitality may lead a jury to reach the conclusion that it was intended to induce the recipient to act improperly.


The nature of the offences means that certain industries are more susceptible than others. High profile sectors such as the media industry, which is often characterised by the use of corporate entertainment and financial incentives, could find themselves in the spotlight.


What practical measures should companies consider taking?

Although the Government’s guidance is not expected to be published until the new year, the anti-corruption organisation Transparency International has already produced guidance on how to prevent bribery (available at It is likely that any statutory guidance will cover similar ground, so commercial organisations would be well advised to review Transparency International’s guidance and start implementing appropriate policies  to ensure compliance with the proposed legislation as part of their risk management strategy.

Reviewed in 2015