Posted on: July 7th, 2014
The Solicitor General, Oliver Heald QC, is planning on hosting a meeting across the Government to discuss possible amendments to the Bribery Act 2010 (“the Act”). Amongst the amendments likely to be discussed includes a proposal by David Green, the head of the Serious Fraud Office, to extend the ambit of section 7 of the Act, so that corporate liability to prevent acts of employees is increased to cover “financial crime” generally, not just bribery, as is currently the case.
Such an amendment would extend the scope of the SFO’s powers to impose US style fines on businesses that do not have adequate systems and procedures in place to prevent financial crime being perpetrated by their employees. In February 2014, in an interview with the Daily Telegraph, Mr Green was cautious to say that the power would be used only in “exceptional cases”, for example where a company had made a profit from the criminal behaviour of its employees, a position that seems to take aim at organisations such as banks which may well have become culpable in the wake of the Libor rigging scandal had such legislation been in place at the time. It is also envisaged that the proposed amendment could prevent firms convicted under the revised Act from bidding for public contracts under EU procurement rules, which could be both a commercial blow and a potential stigma against such firms.
The proposed amendments to the Act would need to be approved by Parliament, however they are likely to receive strong support from law enforcement agencies and consumer groups. If such proposals are passed, it will be even more incumbent on senior management to understand their obligations to prevent fraud within their own organisations and to implement rigorous systems to prevent, monitor and report such activity.