Peers call for speedier bribery investigations

  • UK Bribery Act Committee Report

Power to prosecute under the Bribery Act 2010 should not rest solely with the heads of prosecuting authorities, a committee tasked with reviewing the act’s effectiveness has suggested. In its post-legislative scrutiny report published today the House of Lords Bribery Act 2010 Committee describes as ‘too rigid’ the rule that proceedings may not be instituted except ‘by or with the consent of’ the director of the Serious Fraud Office (SFO) or the director of public prosecutions (DPP).

The committee recommends that subsections of section 10 of the act be repealed and replaced with a provision allowing the directors to delegate the power. It also calls on the SFO and DPP to publish plans outlining how they will speed up bribery investigations.

The recommendations follow nine months of evidence gathering in which the committee interviewed lawyers, MPs, and prosecuting agency officials. Overall the report agrees with witnesses that the act ‘is an excellent piece of legislation’.

However, the report shies away from some proposals put to it during the hearings. One was that legislation is needed to enable corporations to be held liable for the actions of an employee. The committee said although there are arguments for amending the law to make corporations vicariously liable, this would go beyond the scope of the Bribery Act. It also declined to recommend an extension of the ‘failure to prevent’ offence to other forms of economic crime.

Deferred prosecution agreements (DPAs) are not an ‘easy way out’ for offenders, the report states. ‘We believe that the discounts being applied to financial penalties are appropriate to encourage companies to self-report but not so large as to deprive the penalty of its effectiveness.’

Ann-Marie Ottaway, a solicitor at Greenberg Traurig and specialist advisor to the committee, said speeding up investigations is already on [SFO Director] Lisa Osofsky’s ‘to do list’. Requiring the SFO and CPS to publish plans should ensure ‘momentum is not lost,’ she said. ‘Osofsky has advocated greater use of artificial intelligence in document reviews as well as making use of powers to grant immunity from prosecution.’

‘While they didn’t make a recommendation, the committee were clearly in favour of an extension of the failure to prevent offence to other forms of economic crime,’ Ottoway said.

She added that one of the focuses of the review was the impact on small and-medium-sized enterprises (SMEs). ‘The committee have concluded that the existing guidance on the Bribery Act 2010 should be updated to provide more guidance and examples of best practice to assist SMEs. This is a welcome development which it is hoped the MoJ will work to swiftly take forward.’

Christopher David, counsel in the UK white collar defence and investigations team at international firm WilmerHale, said it is still far too early to say what effect the act has had. ‘The committee is right to highlight the length of time that SFO investigations take. Any criminal investigation places a huge amount of pressure on individual suspects, and the combination of long delays and lack of communication can make this intolerable,’ David said.

He added: ‘What is clear, though, is that the ‘failure to prevent’ bribery offence has imposed a significant burden on businesses of all sizes. While the committee has understandably focused on SMEs, the scale of the impact on large multinational businesses should not be underestimated.’

Committee chair and former Supreme Court justice Lord Saville of Newdigate said: ’The Bribery Act 2010 is a model piece of legislation. Not a single witness had any major criticisms of the act. It effectively defines offences in a clear and concise manner, and acts as a deterrent.

‘While we make recommendations for a number of improvements to the act, and hope that the government takes these on board, the legislation is working well and the committee was greatly encouraged by the evidence received.’

The Law Society Gazette | March 14, 2019
https://www.lawgazette.co.uk/peers-call-for-speedier-bribery-investigations-/5069588.article