Since taking office as Prime Minister in July, Sir Keir Starmer has faced renewed scrutiny over gifts given to him and his wife from various organisations and Labour donors. One recent story saw Starmer allocated two seats in the Emirates Stadium’s corporate area, from which he can watch Arsenal games as a season ticket holder. While Starmer has defended his acceptance of the gift by noting that it will be cheaper for taxpayers compared with the security he would need in the stands, the gesture has nevertheless raised eyebrows.

Some of the biggest concerns that have been expressed concern whether or not the giving and receiving of gifts by a Prime Minister could constitute bribery. Under the Bribery Act 2010, it is illegal to give or receive a financial or other advantage intended to induce the receiver “to perform improperly a relevant function or activity”. While there is no indication that Arsenal Football Club has asked for anything in return for its gift, the advantages of currying favour with the Prime Minister of the UK are clear.

As well as making it illegal to receive or offer an advantage in exchange for the improper performance of a duty, the Bribery Act 2010 specifies that the payment of a bribe is illegal where the person “knows or believes that the acceptance of the advantage would itself constitute the improper performance of a relevant function or activity.” With the expectation that the Prime Minister will act on behalf of the people of the UK, and remain neutral to corporate interests that might conflict with the best interests of the British public, the acceptance of gifts presents a tricky situation.

The situation can offer an important lesson to UK companies about how they develop relationships. In fact, there are several important takeaways for them, not least because it is illegal to give or receive a bribe. In some contexts, a company can face penalties even if it did not know that bribery was taking place..

How can a company be found liable for bribery?

There is an offence for companies of failing to prevent bribery when the underlying offence relates to someone within the company bribing another person or a foreign official. This is a strict liability offence, which means the company can be held liable even if it was not aware of the bribe.

A company for the purposes of this offence is “a body or partnership incorporated or formed in the UK irrespective of where it carries on business, or an incorporated body or partnership which carries on a business or part of a business in the UK irrespective of the place of incorporation or formation”. 

A company is guilty of an offence if an “associated person” who is someone who performs services on behalf of the company, such as an employee or an agent, bribes another person for the benefit of the company. If the company is found guilty of failing to prevent bribery, they can face an unlimited fine.

A defence available to a company charged with the offence of failing to prevent bribery is that they had “adequate procedures” in place at the time the “associated person” committed the offence. There is no personal liability for directors of companies for failing to prevent bribery. However, individuals can be prosecuted for offering or accepting a bribe. Companies should make sure that they are informed of what “adequate procedures” are to suitably protect themselves against failing to prevent bribery and to successfully fulfil all of their legal obligations.

What are adequate procedures?

The Ministry of Justice has issued guidance on adequate procedures with six key principles that organisations should follow. These principles provide a framework for developing and implementing an effective anti-bribery compliance programme and could make a significant difference to the outcome of a bribery investigation or prosecution. If the following principles are met, a company could be viewed as having “adequate procedures” in place to prevent bribery and therefore reduce the risk of its company’s liability:

1. Proportionate procedures

The anti-bribery measures in place are proportionate to the risks the organisation faces and the nature, scale, and complexity of its operations. This means developing clear, practical policies that are tailored to your specific operational circumstances and any bribery risks they may engender. For example, it may be appropriate to implement controls such as expense monitoring, or policies relating to gifts and hospitality. Company’s should keep records of risk assessments and any policies (such as an approval process for high-risk transactions) that they enact.

2. Top-level commitment

The organisation’s senior management and board members have shown leadership in developing and promoting anti-bribery policies. They should foster a culture of integrity, allocate the resources needed to implement anti-bribery policies and emphatically communicate the organisation’s commitment to ethics and anti-bribery compliance from the top down.

3. Risk assessment

The organisation regularly assesses the nature and extent of its exposure to potential internal and external bribery risks. This can inform the development of proportionate procedures and enable a business to implement effective anti-bribery policies. Risks to consider might include many different aspects of the organisation’s operations, including its geographical location, sector, or business partnerships. When there are changes in these areas, risk assessments should be updated, and resources should be allocated according to the findings of the assessment.

4. Due diligence

All parties that perform services on behalf of the organisation are subject to due diligence checks that are designed to mitigate bribery risks. You may need to conduct thorough background checks on agents, suppliers, contractors, joint venture partners or others, depending on your company’ unique circumstances. The aim is to assess each party’s reputation and compliance with anti-bribery laws, and you should regularly review and monitor their activities to better meet this requirement. Including anti-bribery clauses in contracts with third parties that outline obligations and consequences for non-compliance can also support this principle.

5. Communication (including training)

Anti-bribery policies are embedded at all levels of the organisation, through processes of communication and training. This may include providing regular, targeted training to employees, and making policies and guidelines easily accessible to everyone within the company. It could also involve hosting workshops or producing internal communications to raise awareness of anti-bribery measures, remind people of their duties and reinforce the ways that they can comply.

6. Monitoring and review

The organisation monitors the effectiveness of its anti-bribery procedures, so that they can be evaluated and updated where necessary. Regular audits, particularly for high-risk companies, can support ongoing compliance and identify gaps that can then be addressed. The company should canvas employees for perspectives on how effective the existing measures are and enter into a cycle of improvement based on feedback.

All of these principles support and uphold each other, but it can be difficult to know where to start or whether your existing policies meet the relevant standards. The best way to be certain is to work with an experienced regulatory solicitor who can work with you to develop a comprehensive approach to fulfilling your legal obligations.
The team at JMW Solicitors has a wealth of experience advising companies on compliance with anti-bribery regulations, and in defending both organisations and individuals who are accused of bribery-related offences. If you need support with developing adequate procedures or policies, conducting an audit on your organisation’s compliance, or defending against an allegation of improper conduct, contact us today. Call JMW on 0345 872 6666 or use our online enquiry form to request a call back.