New rules may outlaw hospitality as bribery

Published on Saturday 6 February 2010 19:34

AS HUNDREDS of people enjoy corporate hospitality at Murrayfield today, they should prepare for a shock – it may all have to end soon.

Legal experts are warning that new anti-corruption laws threaten to consign expensive sports trips to the history books as corporate hospitality of this kind could be considered a "bribe".

Individual packages worth as little as 100 could fall foul of the new rules, meaning invitations to the best seats at Murrayfield or a round of golf at a top Scottish course could be at risk.

The Bribery Bill, designed to tackle serious corruption, is expected to become law at Westminster later this year and will apply to Scotland.

Tickets for Murrayfield's best seats at this weekend's Scotland v France game cost 70 even before food and drink are taken into account, while a round of golf at a top Scottish course is usually a three-figure sum.

But Barbara Bolton, a senior solicitor at Tods Murray, says entertainment worth as little as 100 could be considered fraudulent under the bill's terms. At present, companies found guilty of bribery face an unlimited fine, while individuals can get up to ten years in prison.

Bolton said: "Our whole corporate hospitality culture is about giving advantages or perks with the intention of getting or retaining business. This bill could potentially cover tickets for the rugby, a free round of golf and lunches. Although it is not openly said, these are all things we do with the intention of winning business."

The UK government has said it will issue guidance on what will and will not fall foul of the law, but Angus MacLeod of Wright, Johnston & Mackenzie solicitors said firms were likely to be far more cautious in future about how they woo clients.

He said: "The whole point of corporate hospitality is it gives you an opportunity to meet people and you might win business as a result of that. It's also an opportunity to give a 'wow factor', but if you make too much of a wow, you may end up in the clink."

MacLeod says the government's guidelines need to be clarified.

Although corporate hospitality has suffered during the recession, it was not unknown during the boom years for companies to fly their clients out to places such as the Algarve for golfing breaks, MacLeod said.

Events organisers claimed the new rules had the potential to "paralyse" some industries.

Scottish Fashion Council co-founder Tessa Hartmann said the "preposterous" bill would damage businesses such as fashion, where swish parties and generous goodie bags were the norm.

Hartmann, who runs her own PR firm, Hartmann Media, said: "During London Fashion Week, which is twice a year, I probably go to five or six events each day. It's not a bribe, it's called promotion. The prospect of this kind of activity being affected is appalling. It's insulting to put the word bribery next to it."

Liz Cameron, chief executive of the Scottish Chambers of Commerce, also urged the government to clarify the legislation.

She said: "Basic corporate hospitality is a key part of how businesses network, find new business and build relationships with existing customers. We urge that a balanced, commonsense approach be adopted. Any law must be drafted to ensure that innocent activities are clearly separated out from influencing deals through any form of bribery."

A spokesman for the Ministry of Justice in London said: "Whether hospitality will amount to bribery will depend on the facts.

"If lavish hospitality is provided in a manner in which it is reasonable to conclude that it is intended to induce a person to improperly perform a relevant function as defined in the bill, it will amount to a bribery offence."