Treating a client to the Olympics considered Bribery?
9 December 2012 by Tony Fisher
Now that the Olympics and Paralympics have reached their respective conclusions, it appears that potential legal ramifications are now being considered in light of some of the issues experienced.
At the forefront of these issues is the nationwide-surprise at the vast amount of empty seats which were there for all to see at all event stadiums, predominantly in the first week of competition.
Much has already been said about why the allocations were not taken up, the most notable being that sponsors and other corporate entities actually decided against taking clients and intermediaries to the games, out of fear of being seen to be bribing those they have taken and thus, committing an offence under the Bribery Act.
Whilst this is certainly an interesting point, one worthy of consideration, it does however, appear to have been conceived as a result of simple misunderstanding, or, failing that, a lack of knowledge of the Bribery Act itself and the guidance that has been published along with it.
The Bribery Act explicitly defines bribery as the “offering, promising, giving, accepting or soliciting of an advantage as an inducement for an action which is illegal or a breach of trust”, with this test applying to both individuals and corporate bodies. The Bribery Act also contains a ‘strict liability’ offence focused at and for commercial organisations, where such entities fail to prevent bribery by those acting on their behalf, which include, but are not limited to, employees, directors, agents and third party associates.
Therefore, considering the ramifications of these provisions of the Bribery Act in the context of the Olympics, as the tickets were high value, high profile items, it appears that the lack of occupants for the seats at the games was born of a fear that, by a company taking their client(s) to an even, this could been seen as that company trying to buy its client’s continued custom.
For those of you in business currently, one of the most important things currently is that such businesses find ways of keeping their existing client base on-board or run the risk losing them to a competitor. Running the risk of potentially being liable under the provisions of the Bribery Act is sometimes a risk worth taking for companies across the UK, keen to keep their custom, in some cases, to keep afloat.
However, the further provisions of the Bribery Act do comfort those concerned of potentially breaching the law on bribery, in that it clearly states that there are two parts to the offence of bribery:
- you must offer, promise or give a financial advantage; and
- you must intend that advantage to induce a person to act illegally or in breach of trust or reward them for having done so.
Therefore, it appears that intention is all-important to been seen as in breach of the provisions of the Bribery Act. To clarify the situation further, the Ministry of Justice Guidance to the Bribery Act helps further.
This guidance states that “bona fide hospitality… which seeks to improve the image of a commercial organisation, better present products and services, or establish cordial relations, is recognised as an established and important part of doing business and it is not the intention of the Act to criminalise such behaviour.”
Therefore, it would appear prudent for businesses looking to offer such hospitality now or in the future, to bear in mind the type and level of the hospitality offered, but, most importantly, the decisive factor of whether that business is currently tendering for work from its chosen guest.
The hospitality or expense does not have to be lavish to be a bribe – if the intention of the hospitality is to influence the recipient client to do something they otherwise would not have done, then even the smallest gift can be a bribe.
Ultimately, the circumstances behind the hospitality will determine whether it is genuine or a bribe. If the recipient is a long-standing client with whom you have a good relationship and for whom you have always undertaken work, then there should be no reason not to offer them such hospitality. However, if for example, you have heard that a client is considering moving their business elsewhere and are looking for a way of keeping their custom, offering them tickets for an event such as the Olympics should not be considered.
It is recommended that you seek legal advice in such circumstances, to ensure that everyone in your company is trained and has a good understanding of the practical effects of the Bribery Act and that all bribery-related decisions taken are proportionate to the risks.
If you would like to get some advice on the Bribery Act and its provisions, ramifications and requirements, please contact Mr Tony Fisher of our Commercial Department on 01206 835 230 or at [email protected]
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