In the publicity surrounding the passage of the Bribery Act 2010 earlier this year, much was made of the new offence of bribing a foreign official and paying facilitation payments in foreign countries.
Many commentators considered previous high profile cases such as BAE systems and opined that the new Act would make a difference in such circumstances. Many high street firms who deal with UK-based clients could be forgiven for thinking that this act is of no relevance to their firm.
However, when you look closer at the details of the act it is clear that conduct much closer to home is also under the spotlight.
The offences
The act creates a number of new offences which should be of interest to all law firms, especially the offences of bribing another person; receiving a bribe and failure to prevent bribery on behalf of a commercial organisation.
Bribery is in essence defined as promising or giving financial payment or advantage to a person to induce or reward them for improperly performing a function, where that improper performance would result in a breach of good faith, impartiality or their position of trust.
The relevant function can be a public function, but equally it can be activities relating to business or employment. Further, commercial organisations will include law firms themselves.
A breach of these offences by an individual could result in a fine and/or a jail term of up to ten years. For a commercial organisation the result could be an unlimited fine. It is, however, a defence for a commercial organisation if they had adequate procedures in place for the prevention of bribery.
Why does this matter for law firms?
The principal offences will apply to every lawyer and staff member within the firm. The firm itself will also need to consider how to avoid committing the offence of people (third parties as well as employees) committing bribery on their behalf.
These offences will be relevant to most interactions with national and local government officials, as well as commercial providers where there is any expectation of impartiality, good faith or a position of trust.
Procedures for tendering for government or commercial contracts and procuring services may need to explicitly consider the prevention of bribery.
Many firms should consider reviewing their gifts and hospitality policy (or create one if they do not have one) in light of the act.
Essentially law firms should be in a good position to comply with the new Act. The requirements to act with integrity and to not act in a situation where there is a conflict of interest have been a cornerstone of ethical practice since the formal inception of the legal profession.
The ability of lawyers to incorporate ethical requirements into everyday practice should assist firms in developing an anti-bribery culture.
Proportionality
From the recent Ministry of Justice consultation on the draft guidance for firms, there was recognition that firms are entitled to take a proportionate and risk-based approach to putting in place adequate procedures.
Undertaking a risk assessment of where there is scope for potential bribery will allow firms to develop clear, targeted and proportionate policies which aim to mitigate the risks that your firm faces.
Encouragingly the draft guidance accepts that reasonable and proportionate hospitality will not see firms in breach of the act. So law firms can continue with normal client and business relationship practices such as offering tea and biscuits during meetings, putting on summer drinks for clients and sending Christmas cards to suppliers, without fear of prosecution.