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ACCA Applied Skills · Corporate and Business Law (Global) · Fraudulent and criminal behaviour

Marlow plc has a written policy, staff training and due diligence on agents. Despite this, an overseas sales agent, acting for Marlow, bribes a local official without Marlow's knowledge. Under a corporate offence of failing to prevent bribery by associated persons, how is Marlow's liability best assessed?

Marlow can escape liability if it proves it had adequate procedures designed to prevent bribery. The offence of failing to prevent bribery by an associated person does not require directors' knowledge, and the agent's separate status does not protect the company, but adequate procedures provide a defence.

  1. AMarlow may defend itself by proving it had adequate procedures designed to prevent briberyCorrect
  2. BMarlow is automatically liable whatever procedures it had
  3. CMarlow is not liable because the agent is a separate legal person
  4. DMarlow is liable only if its directors personally knew of the bribe

Explanation

Failure-to-prevent offences make the organisation liable for bribery by associated persons, but allow a defence that adequate procedures existed. Liability does not depend on directors' knowledge, and an agent being separate does not remove the company's exposure. It is not strict liability without any defence.

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