The UK Bribery Act 2010 has been widely heralded as “the gold standard” of anti-bribery laws, an “exemplary” statute that is “a lodestar for other countries.” That the UK is now seen as a “world leader” in the fight against foreign bribery, after years of being seen as a laggard, is due in no small part to UK Bribery Act’s most innovative aspect: the failure to prevent bribery offense under section 7. This section makes commercial organizations doing business in the UK criminally liable if they fail to prevent a person associated with their organization from bribing another for the purpose of obtaining or retaining an advantage for the organization. “Associated” persons are defined broadly as including anyone who performs services on behalf of the organization, including employees, contractors and agents. But companies can avoid liability for failure to prevent bribery if they can show that they had adopted “adequate procedures” to prevent such wrongdoing. This feature of the Act has received growing international endorsement. Numerous jurisdictions have adopted similar provisions (e.g. Australia, Kenya, Bermuda, Ireland, South Africa) or are considering doing so (New Zealand, Canada, Hong Kong). Moreover, within the UK itself, this failure to prevent framework has been expanded to contexts such as tax evasion and fraud offenses, and is also being considered for tackling human rights harms, mistreatment of vulnerable persons and computer misuse offenses.

Yet despite such widespread praise, section 7, and the UK Bribery Act more generally, have their detractors. The main criticisms tend to fall into two categories. First, some have argued that section 7 has not been as effective in changing corporate behavior as might have reasonably been expected. Second, some have argued that section 7’s “adequate procedures” defense is too vague. Both of these criticisms are overstated. Continue reading →