Bribery Act proves hot topic for legal advisers

’Small businesses beware the Bribery Act’ was the one of the resounding messages sweeping through The Lawyer’s first Governance, Risk and Compliance Congress in Brighton this month.

The ever-present spectre of the new legislation emerged as a hot topic of debate, and has clearly been weighing heavily on the minds of general counsel and their external advisers across the market.

A panel of regulatory and compliance experts hosted a lively debate on the Bribery Act, with panellists stressing that all companies, regardless of size, should be preparing themselves for the new requirements.

Graham Hand, chief executive at British Expertise, said: “There are companies out there, small, medium and large, who simply don’t get it. There’ll be prosecutions and that will concentrate minds wonderfully.”

But while larger companies may have the option of bulking up their legal department and pulling out of corrupt economies, small businesses lack the resources to guard themselves against a new wave of prosecutions by the SFO.

“This is where the Bribery Act runs out of road,” Hand admitted. “We can’t have a rule for big business and a rule for small business. I see no solution other than doing your due diligence and risk assessment.”

Panellist Nick Van ­Benschoten, head of the anti-corruption unit at the UK Ministry of Business, Innovation and Skills, agreed, pointing out that the first firm to be prosecuted under the Bribery Act was a ’micro’ firm.

“Small firms are in the cross hairs of the SFO,” he warned.

Attendees also expressed their concerns about the way the requirements might dent their competitiveness globally, with some saying their companies were ­considering pulling out of countries such as Venezuela, Angola and Ivory Coast.

But Hand and Van ­Benschoten believed global market forces would put pressure on key emerging economies to match the ­legislation, and point to major players such as ­Russia and China that have already criminalised foreign bribery.

“The moves taken in ­Russia and China are in response to the pressures of globalisation,” Hand said. “It’s great that the UK ­Government has taken a lead and I think market forces will work in our favour.”

The question of self-reporting also emerged as a contentious point, with companies needing to balance the weight of evidence and potential for a ’tittle-tattle’ culture against the risk of turning a blind eye to bribery only to later be exposed by regulators.

In a situation where a company had reason to ­suspect another of being involved in bribery, Balfour Beatty head of ethics and compliance Andrew ­Hayward and Hand ­recommended reporting the concern internally wherever possible.

“The idea that you want to go seriously to the SFO with a dossier of evidence – it’s going to be the stuff of hearsay,” Hand said. “But reporting internally is very moral and safe.”

Hand and Van Benschoten also warned of the dangers of companies overlooking signs of bribery, particularly if an investigation created a trail of ­evidence.

“If you don’t decide to self report, there’s a risk that the authorities will find out another way and then the situation will be much worse,” explained Hand. “Whatever the consequences of self-reporting, they are better than the SFO opening a file on you.”

Other hot topics at the conference included changes in competition law, presented by Daniel Beard QC from Monckton ­Chambers, and stronger powers in data protection legislation, presented by Jonathan Bamford of the UK Information ­Commissioners Office.