Pre-Bribery Act offences

The Evolving Laws on Bribery and Corruption in England and Wales

The law which preceded the Bribery Act 2010 was complicated and confusing as a result of piecemeal development over more than 100 years.  The Law Commission even described it as unfit for purpose.  In June 2009, the then Secretary of State for Justice and “Anti-Corruption Champion”, Jack Straw, explained:

“It is widely acknowledged that the UK’s statutory criminal law on bribery is old and anachronistic.  It dates back to before the First World War – when Britain was one of the first countries to legislate against any form of corruption.  It has never been consolidated, and contains inconsistencies of both language and concept.  The exact scope of the common law offence is similarly unclear.  The result is a bribery law which is difficult to understand for the public and difficult to apply for prosecutors and the courts”.

The main statutory offences under the old law were contained in the Public Bodies Corrupt Practices Act 1889 and the Prevention of Corruption Act 1906, as amended by the Prevention of Corruption Act 1916 and the Anti-Terrorism, Crime and Security Act 2001.  There was also a separate common law offence of bribery, although it was rarely used.

The need for reform

The collapse in 2006 of the investigation by the Serious Fraud Office (SFO) into the al-Yamamah arms deal between BAE Systems and the Saudi Arabian Government was blamed by the then Attorney-General, Lord Goldsmith, principally on the difficulty in proving that certain commission payments were made “corruptly” as required by the then current bribery laws.  This led BAE Systems to form the Woolf Committee to review and evaluate BAE Systems’ ethical business conduct generally, its internal control systems and record-keeping procedures, and its compliance with anti-corruption legislation.  The Committee's Report, which was published in May 2008, made 23 key recommendations, which were described at the time as a gold-standard for large multi-nationals.  

The al-Yamamah affair also highlighted questions as to the UK’s compliance with its obligations under the Organisation for Economic Co-operation and Development’s 1997 Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (the "OECD Convention").  The OECD Convention came into effect in February 1999 and requires State Parties (there are currently 44 signatory states) to agree to adopt the legislation necessary to criminalise bribery of foreign public officials and to provide prompt international legal assistance for investigating and prosecuting foreign bribery, insisting on corporate liability for bribery and imposing proportionate and effective sanctions upon conviction, including confiscation of bribes and any proceeds received through foreign bribery.  

In its reports of 2003, 2005 and 2007, the OECD’s Working Group on Bribery heavily criticised the UK’s failure to bring its anti-bribery laws into line with its international obligations under the OECD Convention and recommended that the UK enact new foreign bribery legislation as soon as possible.  In its final report prior to the Bribery Act 2010 coming into force, the Phase 2bis Report of 16 October 2008, the OECD Working Group said that it was “disappointed and seriously concerned” by the UK’s continued failure to address deficiencies in its anti-bribery legislation.  The OECD Working Group also commented that: “… failing to enact effective and comprehensive legislation undermines the credibility of the UK legal framework and potentially triggers the need for increased due diligence over UK companies by their commercial partners or Multilateral Development Banks”.

The Bribery Act

To redress this situation, the UK Government asked the Law Commission once again to review the current bribery and corruption laws and make recommendations for their modernisation (an earlier review proposing reform was heavily criticised and subsequently abandoned in 2003).  On 20 November 2008, the Law Commission published a Report setting out its proposals for reform.  Subsequently, on 25 March 2009, the Government published the Bribery Bill aimed at consolidating and updating UK anti-corruption and bribery laws, largely following the Law Commission’s proposals in its November 2008 Report (read our Law-Now article).  

A Joint Committee of both Houses of Parliament was set-up to review and report on the draft Bill.  On 28 July 2009, the Joint Committee published its Report, broadly endorsing the aims and content of the proposed legislation but recommending some important changes (read our Law-Now article).  

There was overwhelming support for the Bill as it made its way through Parliament, albeit that concerns were raised regarding certain provisions, in particular: the lack of specific exceptions for facilitation payments and corporate hospitality; a corresponding over-reliance on prosecutorial discretion not to prosecute activities that inadvertently fell within the ambit of the offences; the need for guidance on "adequate procedures"; whether there should be any system of state-sanctioned clearance or approval for transactions/acts; the failure of the Bill to deal adequately with possible liability of a company for acts committed by a joint venture partner; and whether the Attorney General's consent to prosecute should be required. 
A small number of changes to the text of the Bill were debated and agreed. However, the only significant change to the Bill as originally laid before the House, from the perspective of the business community, was the inclusion of a new clause requiring the Secretary of State to publish guidance on the "adequate procedures" that businesses will be required to put in place to meet the defence to the proposed new corporate offence of failing to prevent bribery.

The bill received Royal Assent on 8 April 2010 and became the Bribery Act 2010, although the offences it created did not come into force immediately.

On 30 March 2011, the Ministry of Justice published its Guidance on “adequate procedures”, which is discussed in greater detail in our separate section, Adequate Procedures .  On the same day, joint prosecution guidance was published by the SFO and the Director of Public Prosecutions, setting out prosecution guidance regarding the Bribery Act 2010 offences. 

The offences created by the Act came into force on 1 July 2011.