A company will be guilty of a bribery offence if an associated person pays a bribe in order to obtain or retain business for the company, or to obtain or retain an advantage in the conduct of business. The only defence available to a company in this situation is that it had ‘adequate procedures’ in place which are designed to prevent people from engaging in bribery.
The adequate procedures defence has recently been tested in the courts for the first time. In R v Skansen Interiors Limited the jury were unconvinced that the company’s procedures were adequate to prevent bribery committed by a senior employee.
The bribes
Skansen Interiors, a refurbishment company, was invited by DTZ Debenham Tie Leung to tender for two lucrative refurbishment contracts. The managing director of Skansen made two payments totalling £10,000 to the project manager at DTZ to secure the £6 million contracts.
Skansen appointed a new CEO in 2014 and he was asked to authorise a third payment of £29,000 to DTZ after being told that this was a genuine payment for services rendered. The CEO had suspicions about the legitimacy of the payment and it was stopped. He then initiated an internal investigation, the result of which was the filing of a suspicious activity report with the National Crime Agency and the reporting of the bribes to the London police.
Despite taking these steps to inform the relevant authorities, Skansen was still charged with the corporate offence of failing to prevent bribery.
Skansen’s defence
Skansen argued that due to the size of the company it did not require complex internal controls to be implemented and the localised nature of its operations resulted in a lower risk of bribery. Staff did not need to be made explicitly aware of specific anti-bribery policies as it was common sense not to engage in bribery and other policies were already in place which focused on transparency and integrity when dealing with third parties. Skansen’s contracts also contained standard clauses prohibiting the payment of bribes and financial controls were in place which allowed invoices to be monitored and approved by senior individuals.
But the jury did not consider these measures to be adequate. The Crown Prosecution Service (CPS) claimed that Skansen had made little effort to foster a culture of compliance and that policies were not adequately communicated to employees.
No anti-bribery policy was in place at the time of the offences and there was a lack of staff training on the issue. The fact that the final payment had been stopped only served to demonstrate that before the arrival of the new CEO the procedures in place had not been adequate.
