Civil recovery disposal for failure to prevent bribery

The Scottish Crown Office and Procurator Fiscal Service announced on 25 September 2015 the first disposal of an offence under section 7 of the Bribery Act 2010( BA 2010) by way of a civil recovery order under POCA 2002.

The defendant company Brand-Rex Limited, is reported to have avoided prosecution by self- reporting to the Crown Office, co -operating and carrying out a wide reaching internal investigation of the offending behaviour .

Brand-Rex is reported to have paid £212,800 under the civil settlement, which was based on the gross profit of the company related to the misuse of the incentive scheme.

Failing to prevent bribery under section 7 BA 2010 offence has a statutory defence where a company has adequate procedures in place to prevent bribery by its associated persons. No such defence was reported to have been raised following the internal investigation.

The SFO retains the power to enter into a civil recovery order where a company co operates and self-reports but there is every indication from recent SFO speeches that entering into a DPA is now their preferred course of alternative disposal. The significant differences in these routes being the requirement for judicial approval for a DPA and the fact that the terms of the DPA are to be made public.

As this civil recovery order was announced prior to the reference in Justice minister Andrew Selous’ answer yesterday that there had been no prosecutions under the section 7 offence , we must assume that a civil recovery order was not sufficient to persuade him that corporate criminal liability be extended.

Practical Law Morag Rea

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