Last month two former executives linked to the interior refurbishment company, Skansen Interiors Ltd, were sentenced for bribery offences in the UK. The case follows a prosecution against both executives and Skansen in what has been called (perhaps incorrectly) the first “Failure to Prevent” case under the UK Bribery Act 2010.
What was the case about?
The case concerns payments of £10,000 in bribes made by Skansen’s former managing director, Stephen Banks, to Graham Deakin, a former project manager at real estate company DTZ Debenham Tie Leung in 2013. After the bribes were paid Skansen won a DTZ contract worth £6m to refurbish offices. Banks also offered to pay an additional £29,000 in a bid to help Skansen win the fit-out contract.
How did these payments come about?
The payments came to light after Skansen appointed a new chief executive, Ian Pigden-Bennett, who told staff he wanted “all skeletons out of the cupboard” and “no surprises.” Pigden-Bennett spoke to MLex (MLexMarketInsight.com) and said that he had reported the results of the company’s investigation to the police and the National Crime Agency (NCA) in the UK. He said that Skansen had been lined up for a Deferred Prosecution Agreement, but that prosecutors at the Crown Prosecution Service (CPS) decided against it because the company was dormant and the court decided it did not have assets to pay a financial penalty. It is important to remember that whilst much of the focus has been prosecutions under the Bribery Act 2010 by the Serious Fraud Office, the CPS also has the power to prosecute bribery cases.
What happened next?
Banks, Deakin and Skansen were charged with offences under the Bribery Act 2010. Banks pleaded guilty to three offences and Deakin to two. Deakin was jailed for 20 months for accepting the payments and soliciting additional monies. Banks was sentenced to 12 months for paying the bribe. Deakin was also ordered to pay £10,697 within 3 months or face an additional 7 years in jail.
Judge Deborah Taylor at Southwark Crown Court also banned Banks from heading companies in the UK for six years, while Deakin was suspended for seven years. She said:
“These are serious offences which undermine the confidence of tendering in the building industry.”
Skansen was found guilty after a two-day trial in February. It is important to note that they were found guilty by a jury and not by the judge. The judge didn’t impose any penalties, giving the company an absolute discharge. This was because the company was dormant and the court ruled it had not assets to pay a financial penalty. The judge however said that it was still in the public interest to prosecute Skansen, even though that was the likely result, saying:
“I should say that had the company been in funds, the situation would have been different, and a substantial financial penalty would have been imposed.
…there is a public utility of the public good in prosecuting cases of this kind to send a message about the necessity for companies to introduce policies and monitor policies which then lead to the prevention of bribery and corruption.”
Was this the first prosecution under section 7?
It is uncertain whether this was the first prosecution under section 7 of the UK Bribery Act 2018 – the so called failure to prevent provisions. This is because the CPS records are imperfect from the time that the Bribery Act 2010 came in. We reported on this in our article on early progress under the Bribery Act 2010 in May 2015 here.
What should companies do now?
Whether this is the first prosecution or not under section 7, the message is clear – companies must do all they can to stamp out bribery and deal with it properly when it occurs. Our Bribery Act FAQs give more details of what proper policies and procedures are likely to involve. For more information on our FAQs see here.
For the MLex article on the case by Ben Lucas click here.
Please contact Jonathan Armstrong or André Bywater who are lawyers with Cordery in London where their focus is on compliance issues.
|Jonathan Armstrong, Cordery, Lexis House, 30 Farringdon Street, London, EC4A 4HH||André Bywater, Cordery, Lexis House, 30 Farringdon Street, London, EC4A 4HH|
|Office: +44 (0)207 075 1784||Office: +44 (0)207 075 1785|