Individuals sentenced following the first contested corporate bribery prosecution under the Bribery Act

United Kingdom

In March, we reported on the UK’s first contested prosecution under s.7 of the Bribery Act 2010 ("BA"), in which Skansen Interiors Limited (“SIL”), a small dormant company in the fit-out construction sector, was convicted of that corporate offence (read details).

On 23 April 2018, the individuals responsible for paying and receiving the bribes at the centre of the case were sentenced at Southwark Crown Court to 12 and 20 months’ imprisonment respectively, and have been disqualified from acting as directors. One of the defendants was also ordered to pay compensation of just over £10,500.

In the case of R v SIL (2018) (unreported), the company won tenders worth approximately £6m from DTZ after SIL’s managing director, Steven Banks (“SB”), agreed to pay “commissions” to DTZ’s project manager, Graham Deakin (“GD”), to assist in SIL winning the tenders.  Payments of £3,000 and £7,000 were made during the course of the relevant contracts, but a further payment of £27,000 was stopped by SIL before it could be paid.

Both SB and GD pleaded guilty to bribery offences under sections 1 and 2 of the BA relatively early in the prosecution process.  SIL defended the prosecution brought under s.7 of the BA, but was found guilty.

In her sentencing remarks for SB and GD, Judge Deborah Taylor (the same judge who presided over SIL’s prosecution) did not make any significant reference to SIL's prosecution, but noted that the underlying offences were serious because they undermined the confidence in competitive tendering in the building industry.

The Guidelines

In sentencing, the judge referred to the Sentencing Guidelines on Fraud, Bribery, and Money Laundering (“the Guidelines").  Broadly, the Guidelines require the sentencing judge to consider and categorise the offending by reference to the individual's culpability and the harm it caused.

Culpability can be high (Category A), medium (Category B) or low (Category C).  Factors that would indicate high culpability include playing a leading role, involving others through pressure or influence, abuse of position, sophisticated or planned offending and motivation being financial, commercial or political gain.

Harm is categorised in Categories 1 to 4 (1 being the most serious harm), based on a consideration of the impact on individuals, the environment, government business/services and the financial gain to the offender/loss caused to others.

Once the levels of culpability and harm have been determined, this provides the judge with a sentence range and starting point on which to base the sentence.  For example, if the offender was considered to be in the highest culpability and harm categories, this would provide a starting point of 7 years' custody with a range of 5 to 8 years' custody to reflect aggravating and mitigating factors.  Conversely, the lowest culpability and harm categories would result in a community order with a category range of a fine to a high-level community order.

After considering aggravating and mitigating factors (such as remorse, previous good character, mental disorders etc.),  the judge will consider any other factors that would indicate a reduction should be applied to the sentence (e.g. assisting the prosecution/guilty pleas etc.) and consider if the total sentence is just and proportionate to the overall offending behaviour.  A sentence will then be passed, which may include imprisonment but may also include other elements, such as confiscation of any proceeds of the crime, compensation or other ancillary orders.

SB – bribe payer

With regard to personal culpability, the judge categorised SB’s offences as falling within the lower end of Category C of the Guidelines (the lowest culpability category) because they were not committed for personal gain (the prosecution had made similar submissions in this respect).  The judge classified the harm caused by SB as falling within Category 2 of the Guidelines (the second highest harm category) due to the impact on the tendering process and the financial gain to SIL and GD.  The prosecution had submitted that the harm should have been placed in the highest Category.

In mitigation, the judge accepted that SB had not initially appreciated that the payments were inappropriate and took into account his: (i) age (55 years); (ii) lack of previous convictions; (iii) remorse; (iv) loss of good character; and (v) the delays in prosecuting the offence (four years), which were outside both defendants’ control.

The judge noted that the appropriate sentence for a case of this nature would be a term of imprisonment of between eighteen months and four years, with an initial starting point of three years. However, following mitigation, and in accepting that there were no aggravating features to SB’s offending, in addition to applying a 25% reduction for his relatively early guilty plea, SB was eventually sentenced to 12 months immediate custody on each of the three offences he pleaded guilty to, to run concurrently. SB was also disqualified from acting as a director for six years.

GD – receiver of the bribes

In addressing GD’s offences, the judge concluded that GD’s culpability fell within the highest Category as argued by the prosecution.  This was on the basis that GD had: (i) personally received the bribes; (ii) abused his position of trust at DTZ; and (iii) gone to the length of setting up a company as a vehicle to conceal the bribes. Harm was again assessed as falling within Category 2 of the Guidelines (the second highest level of harm).

In mitigation, the judge accepted evidence that GD was suffering from mental health problems that had begun before the time of his offending, and continued at the time of sentencing, together with the fact that he was one of two carers for his elderly mother. The judge noted that the appropriate range of sentence in GD’s case would be a term of immediate imprisonment of between three to six years, with a starting point of five years. However, with the mitigation that had been put forward, and taking into account GD’s guilty plea at the first opportunity (which attracted a 33% discount), the judge passed sentence of 20 months immediate custody on each of the three offences, to run concurrently. GD was also disqualified from acting as a director for seven years, and was made the subject of a confiscation order of £10,697.54, representing the value of the bribes he received after adjusting for inflation.

In light of the sentences, the judge did not make an award of costs against either individual.

Comment

The custodial sentences were considerably lower than had been sought by the prosecution, who had suggested (on the basis that both SB’s and GD’s culpability was high) a starting-point of five years’ imprisonment , but equally, were more severe than the suspended sentences argued for by defence counsel. In reaching her sentencing decision, the judge was keen to stress the importance of public confidence in the tendering process, describing the integrity of that process as “of paramount importance”.

Ultimately, these prosecutions show that the CPS is willing to prosecute corporate entities and culpable individuals that engage in bribery, even when the offending is relatively low level and does not result in direct personal gain.  This should also be considered a warning shot to those in the construction industry, to which the CPS has previously indicated it wanted to 'send a message' regarding the need to ensure that companies have put in place adequate anti-bribery controls reflective of the bribery risks to which the business is exposed.