This post was also written by George Brown and Mark Hargreaves

Can the Bribery Bill, which we are told will become law before the General Election, affect property investors, agents and buyers?

It is well over a decade since the UK Government started consultation on the future of the law controlling bribery.  The new Bribery Bill was introduced to Parliament in November 2009 and is now at the Committee stage.  Although the Government is keen to ensure that this is enacted before the General Election there will be time before the law is in force.  However those in the property industry need to think now about how to react and what new internal procedures they will need as a result.

The Bill will introduce a new offence, “the failure of a commercial organisation to prevent bribery”.  That can be avoided if proper procedures are put in place.


Generally the aim of the Government is not to change the basic understanding as to what is corrupt but the Bill does contain a statutory definition of bribery.

It will be an offence to give/or receive a bribe.  Bribery can be committed by individuals or companies.

Also there is a new strict liability offence for corporates who will be liable for the actions of those providing services for them or on their behalf.  This could include, not only employees but also agents and JV partners.  In these relationships, the corporate may have very little control over the behaviour of the third parties particularly in relating to pre-existing arrangements.  The Government has made clear that lack of control will not be seen as an adequate defence to the offence, so how can that be avoided?


The strict liability offence can be defended where the corporate can show that they have put adequate procedures in place to seek to prevent persons within the corporate from participating in bribery.  The Government has confirmed that non-statutory guidance as to what will amount to ‘adequate procedures’ will be provided after the Bill has been enacted but before the new law is enforced.  The guidance is required to cover all types of commercial endeavour and as a result will be very general but it is likely that a combination of risk assessment, codes of practice, clear policies on gifts/hospitality, whistle blowing facilities and procedures to monitor all of these will form a part of what is considered good practice in this area.  Moreover, ‘adequate procedures’ will need to be seen not only to have been created but also implemented through training and regular checks to ensure that the system works.  Our specialists in compliance are well aware of the issues that will have to be covered and how the guidance is likely to be framed.  For that reason corporates will need to start devising and implementing these procedures now so that they know that there is an effective and active procedure in place when the a new law comes into force.


The new offence which will be introduced by the Bill means that the actions or activities of individuals might give rise to the prosecution of the corporate who employs or contracts with them.  One example of such an action might be the hospitality offered to agents or third parties, or the promise of further business or a favour in another transaction.  Whether an offence is committed would be based on a whole matrix of facts but it would be important to focus on the intention of those providing the activity or arrangement.  Where it can be shown that the activity or arrangement was made either to get favourable treatment or as a reward for having received such treatment then the individual involved may fall foul of the general bribery offences.  Equally, the corporate would also be liable under the new offence.

We will be monitoring the passage of the Bribery Bill and will provide further comment in subsequent client alerts.  In the meantime, if you would like any advice, in particular, about the proposed ‘adequate procedures defence’ or would like to make a comment, please contact Mark Hargreaves, George Brown or your usual client partner.  George has experience of a vast range of compliance issues and can provide additional advice.  Mark has experience of many property transactions.

Mark and George’s contact details are as follows:

George Brown
Partner, London
+44(0) 203 116 2849

Mark Hargreaves
Partner, London
+44(0) 203 116 2959