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Leadership Foundation How to stay out of Jail Nicola Bennison, Eversheds LLP 1 November 2011
The key offences • Active bribery • Passive bribery • Bribing a foreign public official • Commercial organisation failing to prevent active bribery by employees, agents or subsidiaries • Wide powers • Not just overseas trading • Covers all trading – not just public officials • Facilitation payments not permitted
The failure to prevent offence This is the new weapon of choice for prosecutors • Strict liability • Knowledge / culpability irrelevant • Relates to active bribery or bribery of foreign public official • By your employee, agent or subsidiary • Bribe paid to retain or obtain business or benefit for client’s organisation • Subject to adequate procedures defence
Adequate procedures? The MoJ advise the guidance will be principles based and will cover: • Senior management responsibility • Risk assessment • Policies and procedures • Implementation and training • Due diligence and business relationships • Monitoring and review
Jurisdiction and penalties • Applies to bribes in the UK • Applies to bribes abroad if the individual is resident or incorporated in the UK • Applies to the conduct of overseas agents and employees if the corporate is registered or trades in the UK • Up to 10 years imprisonment and unlimited fine • Potential personal liability of directors
The Corporate Manslaughter Act 2007 The offence “An organisation to which this section applies is guilty of the offence of corporate manslaughter if the way in which any of the organisation’s activities are managed or organised by its senior managers – • causes a person’s death; and • amounts to a gross breach of a relevant duty of care owed by the organisation to the deceased.”
‘managed or organised by its senior managers’ • Question of fact • Focus on management and organisation • Significant role, not “directing mind” • Cumulative failing
‘amounts to a gross breach’ • Falling far below what can reasonably be expected • Jury to decide • H&S legislation must be considered • H & S guidance may be considered Will this reduce pleas to HSWA offences?
Penalties • Unlimited fine • Publicity Order • Which is worse? • Remedial Orders • Sentencing Advisory Panel Consultation
Publicity orders Organisations to publicise: • Fact of the conviction • Particulars of the offence • Fine imposed • Remedial orders made
Sentencing Advisory Panel Proposal • Starting point after a trial 5% Turnover • Fine likely to be between 2.5 – 10% Turnover • Prosecution may provide evidence of profitability • Presumption of a publicity order • + Guidelines for HSWA offences
Health and Safety (Offences) Act 2008 • Purpose of the Act • Little public awareness of the Act • Major changes to section 33 HSWA • Became law on 16 January 2009
Health and Safety (Offences) Act 2008 Amendments to section 33 of HSWA: • Raises the maximum fine which may be imposed by the lower courts to £20,000 for most offences • Makes a prison sentence an option for most health and safety offences in lower and higher courts • Makes certain offences that can currently only go to trial in lower courts, triable in either the lower or higher courts
Health and Safety at Work etc Act 1974 • Individual liability under Section 37: “Where an offence.… is proved to have been committed with the consent or connivance of, or to have been attributable to any neglect on the part of… …any director, manager, secretary or other similar officer of the body corporate or a person who was purporting to act in any such capacity”
Corporate ladder “… enforcing authorities should identify and prosecute or recommend prosecution of individuals if they consider that a prosecution is warranted. In particular, they should consider the management chain and the role played by individual directors and managers, and should take action against them where the inspection reveals that the offence was committed with their consent or connivance or to have been attributable to neglect on their part …” HSE Enforcement Policy Feb 2009
Sexual offences relating to children (1) Protection of Children Act 1978 • Offences • Taking or making indecent photographs of children • Possessing indecent photographs of children • Distributing, showing or publishing indecent photographs of children • Who may be liable? • Individuals • Body corporate and members of body corporate • Defences • Legitimate reason for distributing, showing or possessing • Had not seen photographs and did not know or suspect them to be indecent • Enforcement and sanctions • Conviction on indictment: imprisonment up to 10 years and/or fine • Summary conviction: imprisonment up to 6 months and/or fine of £5,000
Sexual offences relating to children (2) Sexual Offences Act 2003 - Abuse of positions of trust • Offences regarding abuse of ‘position of trust’ • Sexual touching of a child • Causing or inciting another to engage in a sexual activity with a child • Engaging in sexual activity in the presence of a child • Causing a child to watch a sexual act • Position of trust • Where individual looks after persons under 18 who are receiving education at an educational institution • Although more relevant to FE, applicable to HE where test satisfied • Enforcement and sanctions • Conviction on indictment: imprisonment up to 5 years • Summarily conviction: imprisonment up to 6 months and/or fine of £5,000
Vetting and barring Safeguarding Vulnerable Groups Act 2006 • Scheme currently on hold, but doesn’t remove potential criminal liability. • Series of potential criminal offences • Knowingly permit a barred person to work in regulated activity • Failing to check a person’s barred status • Duty to refer relevant information to the ISA regarding who may pose a risk to vulnerable groups (fine £5,000) • Scheme will be amended by the Protection of Freedoms Bill but not until next year.
8 Data Protection Act Principles Any institution which processes personal information must make sure that this information is: • Fairly and lawfully processed • Processed for limited purposes • Adequate, relevant and not excessive • Accurate and up to date • Not kept for longer than is necessary • Processed in line with individual’s rights • Secure • Not transferred to other countries without adequate protection
Data Protection Act 1998 One particular problem area • Securing data • Appropriate technical and organisational security measures must be taken to prevent unauthorised or unlawful processing, accidental loss of or destruction or damage to personal data • Loss of CDs or laptops containing personal data • Encryption of lap tops / computer equipment • How secure is your data?
Data Protection Act 1998 Offences and Enforcement • Offences: • Notification: failure to notify ICO about methods of processing personal information • Obtaining or disclosing personal data without the consent of the data controller (knowingly or recklessly) • Breaching formal notices issued by the Information Commissioners • Enforcement: • Enforcement notice – used if an organisation has failed to comply with one or more data protection principles • Information notice – used to demand information needed to consider a complaint or decide if a principle has been breached
Data Protection Act Act 1998 ICO Fines • From 6 April 2010 • Notice of Intent • Right to make representations • Fines of up to £500,000
Conclusion Any questions?