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Rolls-Royce investigates bribery allegations

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Commercial Contracts News… The Bribery Act

A recent High Court decision has underlined the importance of getting your consumer contracts right.

It is important that when drafting a contract for services with a consumer that:

As you are probably aware, Rolls-Royce has been asked by the Serious Fraud Office (SFO) to provide information regarding allegations of malpractice by its intermediaries in Indonesia and China.

For more information, see the article published by the Guardian newspaper on 6 December 2012 (http://www.guardian.co.uk/business/2012/dec/06/rolls-royce-talks-sfo-bribery).

The allegations are against Rolls-Royce’s intermediaries rather than the company itself but Rolls-Royce could still be liable. This is because, under the Bribery Act 2010, a commercial organisation commits an offence if a person associated with it bribes someone on its behalf. Such organisations do, however, have a defence if they can show that they had adequate procedures in place to prevent bribery.

You can read more about how your organisation can put adequate procedures in place by reading our guidance note on the Bribery Act 2012.

In its response to the allegations, Rolls-Royce says that it has strengthened its procedures in recent years, for example by introducing a new ethics code. This case could demonstrate the importance of businesses having adequate policies and procedures in place.

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