Bribery Act Could Bring Down A Business Or Deal For The Price Of A Pint

The forthcoming Bribery Act 2010, due on the statute books in April 2011, could bring down a property business or deal for the price of a pint.

Michael Parker, Head of Real Estate at law firm Bircham Dyson Bell, says that the range of potential "offences" under the Act is so vast and subjective that it could even generate acts of entrapment between competitors.

Companies, he says, now need to start thinking about "super-pre-emptive governance and training" to prevent exposure to bribery allegation and accusation. "They will also need to carefully consider joint venture partners on any deal as their activities will also become their responsibility under this act".

"This is a very difficult scenario for all businesses. There is no escape or excuse for a business unaware of an employee considered to be offering, accepting or soliciting advantage, but then again company policy and culture may mean there is a business development budget employees are encouraged to use in the networking process but which is seen or defined as a bribery budget by another firm, or a competitor," said Michael.

"The property deal may be worth many millions of pounds with correspondingly high fees, but the Act provides for the offering, promising, giving, requesting, agreeing to receive or accepting an advantage - so even buying somebody a pint or glass or wine might be seen by a malicious deal influencer, a malicious observer or a malicious competitor as an attempt to bribe. Fundamentally, it could create the opportunity for entrapment because the issue is intent.

"The key question is where does hospitality end and bribery begin?"

"The property sector thrives on networking; it is so massively competitive, and good deals are so scarce, that networking has always been a crucial element not just in terms of identifying and driving deals, but also driving the UK economy.

"The question is whether buying somebody a pint or glass of wine as part of the networking process might be seen as a bribe; if the relationship is new or strained or there is animosity, then it might be considered offensive; but then not hosting a closing dinner involving partner businesses may be seen as equally offensive. It's all subjective.

"However, ironically, I would say that next to no property deals are influenced by the simple act of paying for a round of drinks, a dinner, a night out or a day at the races. Deals are started with personal or corporate chemistry, concluded on professional...