Don’t bank on long deferral of UK Bribery Act nor hold strange and unjustified expectations of precision in its definitions

Relatively keen supporter though I am of our relatively new government, even with its Lib Dem make-weights hanging round its ankles, I do wish for rather more coherence in its decision-making, some evidence, perhaps, that today’s policy-making has a heritage older than yesterday’s breakfast. I was going to say that it feels like watching a yacht tacking into a stiff breeze, but actually it is worse than that – it is like being on board a yacht tacking into a stiff breeze. Earlier this week, for example, the banks woke up to find they were subject to a new levy. Last week, we were going to sell all our woodlands to spiv developers who would chain them up before hacking them down; this week, we see the distant flutter of a white flag on this subject and, by next week, the government will probably be planting new woods. At this rate, we might even start building new public libraries instead of closing them down as is presently planned.

Standing in the street in a cold New York dawn last week, I found a tweet from the always quick-off-the-mark thebriberyact.com“Bribery Act reportedly delayed again confirmed on the Today programme”. I tweeted back “So the most dishonest UK gov’t ever and most corrupt Parliament ever passed a UK Bribery Act and now this gov’t defers it”

A word or two or explanation might be helpful both as to the deferral and to the suggestion that the last government and parliament fell somewhat short of the accepted standards of probity. The latter actually needs little explanation. I have just started reading Peter Oborne’s book The Rise of Political Lying which begins by distinguishing between the personal dishonesty endemic in the last Conservative government and the dishonesty-by-party consciously adopted by Labour even as Tony Blair entered Downing Street, fresh-faced and expressly intent on cleaning up politics. The defining cartoon of his era showed him flogging ermine robes and coronets from a barrow; the emblematic quotation was his claim to be “a pretty straight kind of guy” which caused guffaws up and down the land, not least because he actually seemed to think we might believe him. If he is not thought of as the most dishonest man ever to have occupied Downing Street, that is only because he was succeeded by Gordon Brown. Together they presided over an era in which MPs and peers of all parties fiddled their expenses, lied as policy, sold influence and generally debased the currency of public life. There are only two in prison so far (one more than when I started writing this), but there will be more.

Yet even this open sewer of lies and corruption passed the Bribery Act. It had all-party support and, unlike much of the legislation of that era, was carefully drafted following a Law Commission report rather than thrown together by some single-issue fanatic, as so much of that era’s legislation was. That much was behind the first part of my tweet. What of its deferral by this government, for which “transparency” seems to mean passing on their lightest thoughts as policy.

The Bribery Act was due to come into force in April 2011. An article on thebriberyact of 17 January called The Bribery Act and the review by No. 10: Will pigs fly? We don’t think so referred to a reported interview with a prime ministerial spokesman:

Asked if the Prime Minister was sympathetic to complaints regarding the act, the PMS said that bribery should play no part in winning investment or business, and we stood by all the other OECD countries that had similar anti-bribery laws.  Clearly we wanted to be business friendly: the aim of the growth review was to ensure that we tried to remove obstacles for investment, but at the same time ensure that we didn’t promote activities we didn’t abide by, such as bribery.

The spokesman reportedly added that the ministry will be publishing guidance to help commercial organisations put practical procedures in place that help to prevent bribery later this month.

That is pretty clear, you would think, but you would have also thought in that week that we were about to flog off all our woodlands. A sudden gust of wind seems to have sent the government’s boat off on a different tack. The storm was whipped up by the Evening Standard and worked up into a gale by British business leaders, whose concern may have been fuelled by the fact that between 14% and 50% of them (depending on whose survey you read) had made no preparation for an act whose implications and start date had been known for months – see, for example, this report in the FT of KPMG’s survey.

There are four broad headings to the complaint: 1) inability of UK companies to compete effectively with those of less scrupulous countries 2) lack of clarity in the Guidance Notes 3) confusion as to the difference between a facilitation payment and a bribe and 4) the fear that every meal or sporting event bought for a prospective client will put the managing director in the slammer, perhaps in a cell next door to an ex-MP who voted for the Bribery Act.

The general consensus is that the act will come into force shortly, with new Guidance Notes and a three-month interval between their publication and the act’s implementation. I agree, with the careful caveat derived from my opening paragraph to the effect that the coalition’s habit of announcing policy first and planning it afterwards must make everything uncertain. There is in addition the wild card of the Business Secretary, Vince Cable. He was reported in the Telegraph (see Vince Cable lobbied for delay in Bribery Act as saying “I think we are pretty close to getting a set of guidance which will satisfy the various business groups that have expressed concerns”. One has come to learn of Mr Cable that what he says publicly and what he actually intends or means do not necessarily match up – not the only thing he has in common with Gordon Brown.

Given the speculative element as to the timing, I will not add (much) to the pile of comment flying around at the moment, but instead refer you to one or two resources. There has, incidentally, been an interesting exchange on Twitter recently as to whether retweeting something amounts to an endorsement of what it says. I think not, and the same applies to the sources and articles mentioned below. I would not pass on drivel, at least without describing it as such (see further down for that), but the suggestion that you read something does not necessarily imply agreement with every proposition in it.

thebriberyact.com
As mentioned above, thebriberyact.com is catching every update as it happens, and I spare myself the task of doing updates by just referring you there. A quick flip through the posts of the last few days will give you the twists and turns, enhanced by sturdy comment. You might also follow @thebriberyact on Twitter. Barry Vitou of thebriberyact.com, incidentally, has now joined Pinsent Masons’ regulatory practice.

Transparency International UK
Transparency International has produced a paper called Debunking those Bribery Act myths – which sets out the arguments in easily-understood form

Alexandra Wrage of TRACE
TRACE is an anti-bribery specialist with an accreditation scheme and tools and advice on anti-bribery compliance.  TrustLaw’s Q&A with TRACE’s Alexandra Wrage is interesting, particularly the first question about the “strange and unjustified expectation for a magic bullet”.

Howard Sklar Open Air Blog
Howard Sklar is Senior Counsel at Recommind and has a background in anti-corruption compliance. His article Disagreeing With, Well, Everyone is surely the last word on the difference between a facilitation payment and a bribe.

Having said I will not add to the comment, I will in fact do so on the strength of a letter in the Times on Monday which illustrates both Alexandra Wrage’s “strange and unjustified expectation” point and one about drafting legislation which turned up in my recent article Judges defend our long-term liberties from short-term politicians. It concerns the demands for a closer definition of what is reasonable when entertaining actual or prospective clients or customers. The letter reads:

Confusion reigns over the loose legal terms “reasonable and proportionate” when it comes to practicalities of compliance with the Bribery Act. Is £50 reasonable to pay for a client lunch? Is £500 reasonable for a ticket to Wimbledon? All they need to do is set an annual limit per person hosted — say £500 — and then we all know where we stand. This legislation is causing deep anxiety for small and medium enterprises. Can the judiciary get a grip please and set some limits.

On the subject of confusion reigning, let us take the last point first: there is as yet nothing for the judiciary to grip – their job is to find the facts and interpret the law in cases which come before them and since we do not have an act in force, it is not yet their business, in any sense, to set limits on anything.

The search for precise definitions is exactly the thing which the Lord Chief Justice has complained of and which formed part of my article about judges; the closer the definitions in legislation, the less scope there is for a judge to decide what is right or wrong in the terms of the act. Whatever the arguments about the Bribery Act Guidance Notes, there can be no realistic catch-all definition of what “reasonable and proportionate” means (which is precisely why those words are used). What is appropriate is on sliding scales in multiple dimensions and not just what was paid out relative to what was (possibly) hoped for, even before you examine “intent” and “improper performance”, and whether it is a “relevant function or activity” as the act requires. The high street stationery shop owner buys a pint for the paperclips buyer from the office next door (who may or not be a mate) … or an extravagant lunch for the office supplies manager for the local authority (with whom he may have a common interest in morris dancing or string theory unconnected with work). The sales director hoping for a multi-million pound contract flies the prospective buyer to see his factory and puts her up at a 4* hotel … and takes her out to dinner… and sends up a bottle of champagne and some flowers to her room, so perhaps it is not just the contract he aspires to. In that case, the very significant expense of getting the lady to see the factory may be “reasonable and proportionate” whilst the relatively modest outlay on champagne relates to a completely separate “intent” (with “relevant function or activity” and the potential for “improper performance” perhaps meaning something quite different from their Bribery Act usage). Try writing a guideline to cope expressly with that.

One could think up any number of situations – BUT YOU CAN’T ANTICIPATE ALL OF THEM in the Guidance Notes let alone the Act. The pure cost of the gift is not a helpful measure on its own and you cannot publish a scale as the Times letter-writer appears to think.

It is true that much recent UK legislation has had unintended (if not necessarily unforeseeable) consequences. Sometimes this was inherent in them – Home Information Packs were always going to screw up the housing market even without the recession with which they coincided, and no-one was surprised that the Licensing Act (itself a Labour government bribe to both liquor providers and young voters) resulted in a plague of public drunkenness and vomit-filled streets. Other legislation imbued stupid people with more power than they were fit to bear, giving policemen, health & safety officers, child protection staff and the dim detritus which lurks in local authority offices the apparent right to interfere in our lives in ways undreamed of by the parliament which voted to give them the powers. Those who seek tighter definitions in the Bribery Act guidelines may well have this in mind.

I do not see this as a serious risk. The SFO will have a policy controlled from the top and a strategy executed by intelligent people, not junior policemen, council bureaucrats or social workers. They will want to win (and will want some early quick wins), and they will have regard to the adverse publicity which will follow from picking the wrong cases. Where excesses of power by, say, the thick constable who erases your photographs, rarely come before a higher authority, an SFO prosecution (unless withdrawn, itself a sign of failure) will always end up in front of a judge and will be managed with that in mind. Precedents will be set and patterns will evolve. I would rather a judge considered all the circumstances than that he or she had to hand down the answer (“£51 for lunch – off with his head!”) provided by a tariff of the kind demanded by the Times letter-writer.

It is, of course, necessary for companies to have a policy about these things, but it is not realistic to expect to look in the act or the guidance notes for universal answers to detailed questions. I sense that many companies are busy trying to decide exactly how much to spend on a pizza for the clients and losing sight of the need to prepare in the wider sense for the monitoring, reporting and auditing requirements which will affect some of them more than others (and just making that assessment is a good start).

Before I went to New York, my web site home page referred to the April commencement date. As soon as I got back, I replaced that with a message which reads: The next big thing will be the UK Bribery Act. It was due to take effect in April 2011 but has been deferred. Treat that as time to get ready for it, not an excuse to forget it.

Getting ready will involve a mass of things, from HR to information management to audit and beyond. Those will include guidance based on an assessment of the compliance risk, which will not be the same for every company nor necessarily the same for every employee within the company. That will include general guidance (or strict rules if appropriate) as to what is and what is not acceptable. That may include an assessment as to what may be given and received and may set financial limits on hospitality. Don’t approach it, however, with “strange and unjustified expectations” that it is either possible or desirable to define this precisely in the Bribery Act Guidance Notes.

I close with two articles published today. thebriberyact.com has one headed Burying your head in the sand won’t change the SFO’s aggressive anti corruption enforcement making the point, amongst others, that bribery is already an offence. Howard Sklar’s article The Bribery Act: Still waiting suggests that the international competitiveness point is a “race to the bottom” which you “don’t want to win”.

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About Chris Dale

I have been an English solicitor since 1980. I run the e-Disclosure Information Project which collects and comments on information about electronic disclosure / eDiscovery and related subjects in the UK, the US, AsiaPac and elsewhere
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