The Bribery Act has been passed into law subject only to the making of the necessary order. Inevitably the tough new regime introduced by the Act raises the prospect of UK companies, particularly multi-nationals facing more aggressive investigations and fines potentially running into tens of millions of pounds. In the words of the Financial Times, “reputations and profits will be threatened if companies fail to show they have set up and followed, adequate procedures to prevent briberyâ€.
Section 7 of the Act creates a new strict liability offence for companies and partnerships of failing to prevent bribery occurring within their organisation. It is the Section 7 offence that could apply in a franchising context and which this note will consider.
The only defence to a prosecution under Section 7 is if a franchisor has put in place adequate procedures designed to stop corruption.
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