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A jolly difficult decision

Some of you, who as I do, may follow the Alex Cartoons in the Daily Telegraph, will notice that Alex is undertaking a mission to have the forthcoming Bribery Act repealed. He is concerned that it will spell the end to those days out of the office on “marketing” or “practice development” where we either enjoy the hospitality of our client or take them out to thank them for their ongoing instructions. Is all this to come to an end?

The Bribery Act 2010 came into force on 1st July 2011 and is a complete overhaul of the existing bribery law in England and Wales ( not Scotland or NI !). It is largely designed to monitor and help control the behaviour of Banks and certain financial institutions, bit does it have any relevance to the day to day running of a small to medium sized business and in particular any corporate hospitality or entertainment they may undertake.?

Under section 1 of the Bribery Act, a person (P) is guilty of an offence where they offer, promise or give a financial advantage to another person in two cases:

  • Case one, where P intends the advantage to bring about an improper performance of a relevant function or an activity by another person or to reward such improper performance (section 1(2)).
  • Case two, where P knows or believes that the acceptance of the advantage offered, promised or given, in itself constitutes the improper performance of a relevant function or activity (section 1(3)).

Section 2 of the Act gives specific examples in relation to what this means.

The Ministry of Justice’s guidance on the matter states “Bona fide hospitality and promotional, or other business expenditure which seeks to improve the image of a commercial organisation, better to present products and services, or establish cordial relations, is recognised as an important part of doing business and it is not the intention of the Act to criminalise such behaviour”

In other words taking a customer out to lunch or inviting them to watch the cricket is unlikely to contravene the Act

It is however important to look at each person within you organisation individually. The office assistant, even if taken on an all expenses paid trip to the Bahamas for two weeks, has very little say over any of the decisions taken in the business. When the same “gift” is given to the Managing Director, then the position is different, as he is in a position to influence any decision made in relation to the company or individual who has given the gift.

So, does Alex have something to worry about? I think the answer is very much it depends both on the level of the hospitality and the reason it is being given.

If the purpose is to make sure he gives business to that company or individual then he may have a problem. However if it is just to improve business relations or thank him for a job well done then probably not.

So it could be a jolly difficult decision but the age of the jolly is not yet dead.

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