Bribery, the first conviction of a company after a trial

Section 7 of the Bribery Act 2010 makes it an offence for a company to bribe another with the intent of obtaining or retaining business or to gain an advantage in business.

The first conviction after trial for an offence under this section was that of Skansen Interiors Ltd who were convicted of failing to have adequate provisions in place to prevent bribery. This first-ever contested ‘failure-to-prevent’. case since the UK Bribery Act came into force in 2011

Two directors received prison sentences for offences under the Bribery Act 2010, and the company faced this offence under section 7.

What did they do?

The allegation was that the company paid a large fee to obtain confidential information to give them an advantage when tendering for an office refurbishment project. The bribes were paid by Skansen Interiors’ former managing director, Stephen Banks to Graham Deakin a former project manager at real estate company DTZ Debenham Tie Leung in order to gain a multi-million pound deal.

A new CEO launched an internal investigation when he became aware of the arrangement and he implemented a new anti-bribery policy.

Despite that policy being put in place one of the directors still tried to make the final payment on the arrangement. The CEO immediately dismissed two men (one of whom was not charged) after he discovered evidence of the bribes being paid. He then filed a ‘suspicious activity report’ with the National Crime Agency, and reported the suspected bribery to the City of London police.

What about the directors?

The two directors were charged with offences under sections 1 and 2 of the Bribery Act, one was sentenced to 12 months’ imprisonment, the other to 20 months’ imprisonment, both were disqualified as being directors, for 6 and 7 years respectively.

Was there an alternative to prosecution?

By self-reporting the company could have been offered an agreement to pay a fine so that they would not be prosecuted if they complied (a Deferred Prosecution Agreement).

In this case the company was, by then, dormant so they could not have paid. Although the prosecution was queried by a Judge, the decision to continue with the prosecution was made to send a message to small companies that bribery needs to be taken seriously, and to make sure that procedures and policies were put in place by them.

It was an interesting feature in this case, that despite the company self-reporting, as companies are encouraged to do by the Serious Fraud Office and the National Crime Agency, a decision was still taken to prosecute the company as well as the officers who paid the bribes.
It is important for a company considering self-reporting to take advice before doing so.

What was their defence?

The offence under section 7 relates to a company failing to prevent bribery, the company relied on the defence that they had “adequate provision” in place but were convicted after trial.

Is there guidance anywhere for my business?

Guidance is available from the Ministry of Justice regarding the types of bribery prevention procedures that companies should have in place –

https://www.justice.gov.uk/downloads/legislation/bribery-act-2010-guidance.pdf