Adequate procedures under the Bribery Act: New guidance and a British standard

Adequate procedures under the Bribery Act: New guidance and a British standard

Published:

Author: Ron Reid

Without a prosecution yet for the corporate offence under Section 7 of the Bribery Act - failing to prevent active bribery - and the generic nature of Government guidance on what are 'adequate procedures' (commercial organisations' only defence against this allegation), any additional information on what constitutes compliance is useful.

In the financial services sector, some help was given when the Financial Services Authority (FSA) published the reasoning behind the July 2011 £6.9m fine it imposed on Willis Limited for failings in its anti-bribery and corruption systems and controls.

The reasoning is detailed, and helps determine the FSA's expectations for any Anti-Bribery Management System (ABMS). This is reflected in guidance on compliance published in December 2011 by the British Bankers' Association.

A further aid to organisations seeking to benchmark the adequacy of ABMSs they have introduced, comes in the form of a new British Standard (BS10500:2011), which sets out a specification for ABMSs.

By their very existence, these documents will influence whether such systems are considered adequate when determining if an 'adequate procedures' defence can be made out.

Under the Bribery Act, there is a reverse burden of proof: once the prosecution can show that systems to prevent bribery may be inadequate, the burden of proving that procedures are indeed adequate falls on the defendant.

Such a reverse burden of proof - effectively an organisation having to prove itself innocent - is not unusual in regulatory matters. Health and safety is a good example; once a prosecutor can show there has been a material risk to the health and safety of employees, the reverse burden of proof comes into effect, and it is for an organisation to prove that it was doing all that was reasonably practicable to ensure the health, safety and welfare at work of its employees.

Often in such cases, Industry Sector Guidance and BSI standards are quoted as evidence that such organisations may not have done all that was reasonably practicable. They have often proved a boon to prosecutors.

The same can therefore be expected in respect of the new BBA guidance and BSI standard, which in many ways go further than the statutory guidance published by the Government.

A lot of the requirements mirror the suggested compliance plan we circulated back in early 2011.

However, commercial organisations would be well advised to review their ABMS in the light of these publications.

More information?

Shoosmiths can provide training on, and help organisations comply with, the Bribery Act.