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Bribery Act guidance is too vague, says Law Society

Proposed rules on what companies have to do to avoid being prosecuted under new bribery laws are not detailed enough, the Law Society has said. More clarification, particularly for smaller companies, is needed, it has told the Government.30 Nov 2010

The Bribery Act, which was passed earlier this year, places on organisations a new burden to ensure that their staff or representatives are not engaging in corruption. An organisation can be liable for illegal activity if it does not have "adequate procedures" in place to deal with the issue.

Business groups lobbied the last Labour Government to provide greater clarity on what those adequate procedures might be, and that Government inserted into the law a requirement that the Government provide guidance on the issue.

The Law Society has responded to a consultation on that guidance and has called for more detail.

"The Law Society considered that the guidance is helpful. However, there were specific areas where more detail and clarification would be helpful," said the Law Society's response (4-page / 45KB PDF). "The Law Society recognises the importance of prosecutorial discretion in legislation such as this. However, this does mean that there will be a lack of certainty in the early days of implementation and this is a concern for many of our Members and their clients. Clear and swift guidance from the prosecuting authorities would, in our view, help to allay fears and assist firms to ensure compliance with the new Act."

The Law Society said the approach taken by the Ministry of Justice's guidance is too vague.

"Much of the guidance sets out issues for a business to consider rather than practical guidance. We are concerned that, particularly for smaller firms, the lack of practical guidance will make putting in place adequate procedures difficult," it said. "While we recognise the difficulty with providing detailed guidance, it would be helpful if the guidance could signpost businesses to other more practical sources of information."

The Law Society also said that the guidance should advise on how companies can deal with bribery that is ongoing, and how they can deal with bribery that occurs in the UK.

"[The guidance's practical examples] are overly complex; they only consider overseas bribery, which may cause firms to overlook the fact that bribery can occur in the UK," said the Law Society response.

Benjamin Long, a barrister with Pinsent Masons, the law firm behind OUT-LAW.COM, and a specialist in the Bribery Act, said he agreed with the Law Society's criticism. But he said he would be surprised to see more detailed guidance from the Ministry of Justice (MOJ).

"The guidance doesn't actually give any details of procedures – it simply gives six principles which in themselves don't lay out the foundations of what a company should actually be doing in practical terms, so in many ways the guidance doesn’t quite step up to the mark," said Long.

Long said the guidance poses hypothetical questions but supplies few answers, putting an unfair burden on businesses, particularly small ones.

"The guidance does need more clarity," he said. "It needs to be a useful working document, as opposed to 30-odd pages of postulation and rhetoric. But I remain sceptical as to whether the advice will be more definitive. I imagine not, as the MOJ will be very keen not to tie the hands of the SFO [Serious Fraud Office], the prosecuting authority when it comes to charging decisions."