The Bribery Act 2010

The Bribery Act 2010 came into force on 1 July 2011 and is of fundamental importance to all commercial organisations that either operate or are registered in the UK.

The Act repeals and replaces England’s old, much-criticised, laws on bribery with a new comprehensive anti-bribery code which has enabled both the courts and prosecutors a means to respond more effectively to bribery.

The crime of Bribery is best described as “Occurring when a person offers, gives or promises to give a financial or other advantage to another individual in exchange for improperly performing a relevant function or activity.” The Act can be split into two predominate parts, Individual Offences & The Corporate Offence;

Individual Offences:

The Bribery Act 2010: Section One – Bribing Another Person
The following elements are required to establish this offence:
• A person (the “briber”) must offer, promise or give a financial or other advantage to another person;
• The briber must:
o Intend the advantage either to induce a person to improperly perform a function or activity or reward a person for improperly performing a function or activity; or
o Know or believe that the acceptance of the advantage would itself constitute the improper performance of a function or activity.
The Bribery Act 2010: Section Two – Being Bribed
The general consensus for what constitutes being bribed are as follows;
• A person requests, agrees to receive or accepts a financial or other advantage intending that a function or activity should be performed improperly as a result, whether by himself or another person;
• A person requests, agrees to receive or accepts a financial or other advantage which in itself constitutes the improper performance of a function or activity by him;
• A person requests, agrees to receive or accepts a financial or other advantage as a reward for the improper performance of a function or activity;
• Where, in anticipation or as a result of a person requesting, agreeing to receive or accepting a financial or other advantage (“the person being bribed”), a function is performed improperly, whether by the person being bribed, by someone else at the request of the person being bribed or with the agreement or acquiescence of the person being bribed.

The Bribery Act 2010: Section 6 – Bribing Foreign Public Officials
This offence will be committed if a person offers or gives a financial or other advantage to a foreign public official with the intention of influencing the foreign public official and obtaining or retaining business, where the foreign public official was neither permitted nor required by written law to be so influenced.

Territorial Scope

• If the offence is committed in the UK, the nationality of the individual or organisation is irrelevant meaning that the Act will be enforced.
• If the acts or omissions that form part of the offence were committed outside of the UK, the person committing the offence may still be prosecuted if committed by British nationals, a national of a British overseas territory or UK corporate organisations.
• A UK company is not liable for the offences if the bribe is committed abroad by its foreign subsidiary. The foreign subsidiary is also not liable in that situation.

The Corporate Offence

An offence is committed by a commercial organisation when:
• A person “associated” with the commercial organisation bribes another person;
• The bribe is intended to obtain or retain business for the commercial organisation or retain an advantage in the conduct of the organisation’s business.
The Bribery Act 2010 allows such so that it is a defence for the commercial organisation to show that it had adequate procedures in place to prevent bribery being committed by those associated with it. This effectively creates a burden on the corporate organisation to ensure that their anti-corruption procedures are sufficiently robust to stop any employees, agents or other third parties acting on the corporate organisations behalf from committing bribery.
There is no set policy to such procedures, what is sufficient for a small or medium sized organisation will more often than not differ from what would be required for a large multinational firm. However, Adequate Procedure Guidance (“APG”) was set paying close attention to the following 6 principles:
• Proportionate procedures – the procedures an organisation should take must be proportionate to the risks they face. The APG suggests that factors such as an organisation’s size and the nature and complexity of its business will influence the response required;
• Top level commitment – this requires top level management to ensure that the organisation’s staff and those who do business with or for the organisation understand that bribery is never acceptable;
• Risk assessment – this requires organisations to assess the nature and the extent of their exposure to external and internal risk of bribery. This assessment needs to be periodic, informed and documented;
• Due diligence – this is about knowing who you do business with; the APG recommends organisations undertake a proportionate and risk based approach to due diligence in respect of persons who will perform services for and on behalf of the organisation;
• Communication – the government believes the communication of bribery policies and procedures will deter bribery by enhancing awareness of the organisation’s procedures and its commitment to their proper application. Training should be used to raise awareness about the threats posed by bribery in general and the sector areas in which the organisation operates;
• Monitoring and review – an organisation should monitor and review the effectiveness of the procedures they put in place and make improvements where necessary.

Prosecution and penalties
Section 10 of the Bribery Act 2010 requires the authorisation of any prosecution by the director of the appropriate prosecution agency before a case can go ahead, a shift from the old regime which required the consent of the Attorney General for England and Wales. Section 11 explains the penalties for individuals and companies found guilty of committing a crime.
• If an individual is found guilty of a bribery offence, tried as a summary offence, they may be imprisoned for up to 12 months and fined up to £5,000.
• Someone found guilty on indictment, however, faces up to 10 years’ imprisonment and an unlimited fine.
• The crime of a commercial organisation failing to prevent bribery is punishable by an unlimited fine.
In addition, a convicted individual or organisation may be subject to a confiscation order under the Proceeds of Crime Act 2002, while a company director who is convicted may be disqualified under the Company Directors Disqualification Act 1986.
Conclusion

The Act has been described as “the toughest anti-corruption legislation in the world”, and while it may only change little from an individual’s perspective, it puts significant pressure on corporate organisations doing business in the UK to ensure that they have appropriate anti-corruption procedures in place before implementation of the Act.

The Far East Appeal

There seems to be a trend developing with regard to pre season destinations. A number of high profile football clubs have chosen to leave Europe in favour of the far east in search for that ideal start to their campaign.
The preparation for the season ahead is essential and clubs often have a limited time schedule to work with. So what is it about the Far East that is so appealing and why are clubs changing their approach this time around?
The summer of 2011 is the first time since 2001 that Arsenal Football Club have made arrangements for a pre season tour outside of Europe. Arsenal regularly held their training camps in Austria, this year however they appear to have changed their position switching their attention to the far east.
Few clubs to date have been able to wield such financial influence over the asian market as Manchester United. Some consider this success to be attributed to the marketing of midfielder Ji-Sung Park.
Simply there is no other asian player that has had an impact quite like the South Korean. He is the most decorated footballer in asian history, as the first South Korean player to have won the UEFA Champions League and the first asian to have played in a final of the tournament.
When he first signed for Manchester United in July 2005 many were surprised to see him feature so frequently. Park’s involvement and popularity has sparked huge interest and this has been evidenced by a significant increase with regard to club merchandise and shirt sales figures. The reception that Ji-Sung Park receives when he goes home has been described as phenomenal.
In terms of all round contribution both on and off the pitch few would contest that he is one of Manchester United’s most ‘important’ players. Needless to say many leading clubs are searching for a similar profile to boost their clubs global recognition.
Gavin Law, the group head of corporate affairs for Liverpool’s shirts sponsor, Standard Chartered announced that, “they would love the club to have players of nationalities from the markets in which they operate”. He cited Manchester United player Ji-Sung Park as a working model. He has shown his commercial value but also that asian players can make it in Europe.
Ian Ayre, the managing director at Liverpool FC described what Asia 2011 was for Liverpool Football Club. He said that aside from aspects relating to commercial opportunity “It was a real chance for both the new signings and the younger players to see the size, power and the importance of the football club”.
The attendances at these pre season games can sometimes eclipse those attendances in the Premier league which in itself is staggering. Somewhere within the region of 200,000 fans connected with Liverpool Football Club over a one week period.
Manchester United and Liverpool have demonstrated that they are leading the way in terms of exploiting commercial opportunity in the far east. Arsenal Football Club have also actively taken steps to increase commercial productivity overseas and surely other competitors will follow suit even if it’s only in fear of being left behind.

Football Association Premier League Limited & Others v QC Leisure & Others

The Football Association Premier League Limited is the governing body of the English Football Premier League which is inclusive of 20 Premier League Football Clubs.

The Premier League owns various copyrights in the feed of each Premier League football match and these are sold to broadcasters.

Sky Sports currently hold the license for the UK broadcasting rights and have recently announced they will screen over 115 games for the 2011/2012 season.

However each Premier League football match is filmed and packaged so that broadcast rights can also be licensed to foreign broadcasters. The foreign broadcasters are required by the terms of their licence agreement with the Premier League to undertake to procure that no device is knowingly authorised or enabled so as to permit anyone to view any such match outside of their particular licensed territory.

The Premier League claimed that the Defendants supplied pubs in the UK with non-UK decoder cards sourced through subterfuge from a variety of countries within and outside the EU, which lead to the televising of live Premier League matches in bars and pubs. By purchasing the decoder equipment from Greece, in this case, the bars and public houses were able to save thousands of pounds in fee’s in which they normally would have had to pay to their exclusive license holder.

The Premier League asserted that these actions infringed their rights under s.298 of the Copyrights, Designs and Patent Acts 1988 (CDPA) and their copyrights in the footage.

The Defendants claimed that the cross-border trade in decoder cards was lawful even without the Premier League’s consent under the CDPA and certain provisions of EC law, including in particular Directive 98/84/EC (the Conditional Access Directive), and sought a reference to the European Court of Justice.

It is important to note that no decision has yet been made by the European Court of Justice, however Advocate General (AG) Kokott is of the view that territorial exclusivity agreements relating to the transmission of live football matches are contrary to EU law relating to ‘free movement of services’.

The High Court referred a number of questions to the ECJ on the interpretation of EU law. AG Kokott has given her advice and reasoning based on the questions below:

1. Whether decoder cards purchased in Greece and imported into the UK for use in the UK are “illicit devices” within the meaning of Directive 98/84 on the legal protection of conditional access services (the “Conditional Access Directive”) and therefore prohibited;

AG Kokott holds the opinion that Article 2(e) of the CA Directive is not directed to preventing the use of an access device against the will of the service provider, but required equipment designed or adapted to give access without the permission of the service provider. Thus, the decoder cards in question were specifically designed to provide access with the permission of the Greek service provider. AG Kokott finished this point by suggesting that the decoder cards were not modified so as to make them illegal by virtue of importation into the UK.

2. The meaning of “communication to the public” under Article 3 of Directive 2001/29 on the harmonisation of certain aspects of copyright and related rights in the information society (the “Copyright Directive”);

AG Kokott asserted that there are no comprehensive rights protecting the communication of a broadcast to the public in the absence of an entrance fee. Article 3(1) covers only communication of works to a public which is not present at the place in which the communication originates.

3. Questions on the interpretation of the Treaty Rules on free movement of goods and services under Articles 28, 30 and 49 EC (Articles 34, 36 and 56 TFEU) in the context of the Conditional Access Directive;

AG Kokott explained that the territorial exclusivity rights in issue had the effect of partitioning the internal market into quite separate national markets, something which constitutes a serious impairment of the freedom to provide services. In considering whether this restriction was justified under Article 36 TFEU in order to protect industrial and commercial property, Advocate General Kokott determined that the specific subject-matter of the rights in live football transmissions lies in their commercial exploitation through the charge imposed for decoder cards. She considered that such exploitation is not undermined by the use of foreign decoder cards, as corresponding charges were paid for those cards. Whilst those charges are not as high as the charges imposed in the UK, there is no specific right to charge different prices for a work in each Member State, and the Premier Leagues approach of marketing the broadcasting rights on a territorially exclusive basis amounts to profiting from the elimination of the internal market. Accordingly, a partitioning of the internal market for the reception of satellite broadcasts was not necessary in order to protect the specific subject matter of the rights to live football transmissions and was therefore not a justified restriction of the freedom to provide service.

4. A question on the interpretation of the Treaty rules on competition under Article 81 EC (Article 101 TFEU).

Finally AG Kokott held that the provision in the exclusive licences requiring the broadcasters to prevent their satellite decoder cards from being used outside the licensed territory had the same effect as an agreement to restrict parallel trade and was therefore liable to prevent, restrict or distort competition. Such restrictions are classified as serious restrictions under Article 101(1) TFEU (restrictions by object) and there is no need to demonstrate actual anti-competitive effects.

To conclude, if the ECJ were to follow AG Kokott’s opinions on the aforementioned matters, there will be major implications and changes as to how rights holders exploit their content through sales to broadcasters. Rights holders may no longer be able to segment the market on a territorial basis. Consumers may also be able to buy rights to content through the subscription to foreign broadcasters and use their decoder cards. The knock on effect of such would see broadcasters paying substantially less for content rights, and reducing their prices to consumers.

IPS Law Successfully Defends Queens Park Rangers FC

There are very few sports law cases where the result will not only have severe financial ramifications but will also effectively decide the outcome of an intensely contested sporting competition.

However, this was exactly the situation that had arisen with the recent disciplinary proceedings initiated by the Football Association against Queens Park Rangers FC, whereby a combination of factors meant that not only would a potential windfall worth (according to some analysts) a substantial £90M be at stake but also the title of the Football League Championship.

The FA began its investigation into QPR’s purchase of the Argentinean midfielder Alejandro Faurlin in 2010, a short time after the club had informed the FA of its intention to purchase the economic rights of the player from a third party approximately one full season after Faurlin signed for QPR.

As most people who follow football will be aware, the concept of third party ownership of players, whereby an entity other than the club effectively ‘owns’ the player, was given national attention after Carlos Tevez effectively saved West Ham United from relegation in 2007.

In response to the ‘Tevez Affair’ the FA, Premier League and Football League all took measures to either amend their existing regulations or implement new ones to ensure a similar situation could not arise and prevent further embarrassment. It was with the new measures that on 04 March 2011 the FA proceeded to charge QPR with a total of four breaches of its Rules and Regulations prohibiting third party investment in players and three further charges concerning the actions of QPR and Mr Paladini use of an unauthorised (and not as sometimes reported unlicensed) football agent in the transaction.

If found guilty of the charges, QPR could have been faced with the prospect of a substantial fine and perhaps more importantly, the Independent Regulatory Commission (tasked with deciding the matter) may have been inclined to impose a substantial points deduction. At the time the club was charged, QPR were the bookmakers favourite to win the Championship and secure an automatic return to the Premier League for the first time in almost fifteen years. Any points deduction may have prevented automatic promotion and consequently denied QPR a huge financial windfall.

Due in part to the complexity of the legal questions raised and the right of QPR to be allowed to prepare their case with sufficient due care and attention, the matter was due to be heard in the final week of the Championship Season. By the time the Hearing commenced, QPR had already been crowned champions. Any decision made at that time of the year, would now not only affect QPR, but all of the other sides vying for promotion (either automatically or through the play-offs) and furthermore, if sufficient points were deducted, the title QPR had just earned could have been taken away and handed to the team that finished behind them. The decision of the Independent Commission had to be made prior to the final whistle of the last Championship game of the season if a points deduction was to contemplated. If the decision to make a points deduction was conveyed after the final whistle then a points deduction could only be made by the Premier League and could have seen QPR start their season with a deficit.

A large amount of evidence and numerous witnesses from around the globe all contributed to the Hearing being extended and a decision postponed until just before kick-off of QPR’s final game of the season on 07 May 2011.

Players, fans, pundits and all of the parties involved awaited anxiously the decision which came at 12PM. QPR had argued it’s case successfully and was only found guilty of two of the seven charges (one relating to Rule E3 and the other in connection with the agent). QPR were fined £875,000 but most importantly, to the delight of ecstatic QPR fans, the club was not docked any points.

The Independent Commission held that there was never any third party influence over Alejandro Faurlin during his initial season at QPR, therefore the charges relating to third party ownership and influence were dismissed in their entirety. There was also no finding of bad faith, dishonesty or deliberate misconduct on the part of QPR.

Earlier today, QPR have announced that they will not be appealing the decision reached by the Regulatory Commission. The decision of the club to decline an appeal was based on the fact that not only did the result allow QPR to achieve automatic promotion as champions but perhaps, just as importantly, the integrity of QPR was not called into question by the Regulatory Commission in its findings. The evidence put forward by QPR was found to be honest and truthful, something QPR had maintained from the offset. This decision has been taken in the best interests of the Club and the Football Association.

While the timing of the Hearing was questioned by many, the importance of the legal argument put forward by IPS and the decision that followed ensured that the outcome of the Championship was decided by those who matter the most, the players. The Championship was, eventually, won on the field of play.

IPS Law helps Adam win bonus payments

Leading Sports Law Firm IPS Law represented Blackpool captain Charlie Adam in his battle with Blackpool Football Club over an unpaid bonus. After winning an unexpected Coca Cola Championship play-off title, the Blackpool squad were entitled to be paid a bonus shared out on a pro-rata basis between both the players and the staff. Thus the Scottish international was due a healthy split of the monies for his influential role in Blackpool’s promotion to the Barclays Premier League.

However, Charlie Adam did not receive this payment until recently, which he was able to obtain thanks to the Sports Team at IPS Law.

A Premier League Arbitration Hearing was held specifically to consider the bonus payment that Charlie Adam & IPS Law believed he was owed from the Club, and whether the non-payment of the bonus amounted to a repudiatory breach of his contract, which would have allowed the player to leave the Club as a free agent.

The Premier League’s Appeal Board found in favour of Charlie Adam in relation to the bonus payment.
Thanks to IPS Law, there has been a just and good quality result for both parties in that Charlie Adam collected his rightful bonus payment.

IPS Law Partner helps bring FA and Capello together

Senior Partner of IPS Law Chris Farnell was responsible for bringing together the Football Association and the new England manager, Fabio Capello.

Chris had previously met Fabio Capello’s advisers to discuss possible vacancies in England, and was made aware of the Italian’s interest in the national job should it become available. IPS Law has an associate office in Italy where Mr Farnell carries out a lot of work.

Chris set up the initial contacts between the two parties and organised their meeting, briefing the Capello camp in advance. The Football Association went on to appoint Mr Capello as England manager in December 2007, shortly after they sacked Steve McClaren.

IPS Law conclude a busy summer of transfers

Summer 2008

Chris Farnell, Senior Partner of IPS Law, advised on 21 player moves worth a total of £92m during the summer 2008 transfer window, including Everton’s club record £15m signing of Marouane Fellaini from Standard Liege just a minute before the clock struck midnight.

Chris was also involved in David Bentley’s switch from Blackburn Rovers to Tottenham Hotspur, and Shaun Wright-Phillips’ return to Manchester City from Chelsea in what turned out to be a very successful summer at IPS Law.

IPS Law storms to the top of the league in the sports field

September 2007

IPS Law has emerged as the dominant player in the sports field, covering technology media and telecoms – sport, media and entertainment, IT and intellectual property.

The specialist sports boutique has quickly established an excellent reputation for advice to football clubs and players and has recently acted for a series of agents in relation to defamation claims against newspapers, boasting a record four out of four defamation case wins in the last year.

Meanwhile, Senior Partner Chris Farnell advised on 19 Premier League moves totalling more than £120m in the 2007 summer transfer window. These included Michael Brown’s switch to Wigan Athletic, Nani and Anderson’s moves to Manchester United and Manchester City’s Signing of Rolando Bianchi.

Mr Farnell also advised on contract negotiations involving Jermaine Jenas, Tim Cahill, Shay Given, Steven Ireland and Micah Richards.

The pair also acted on contract re-negotiations for a number of top premiership stars.

IPS Law enjoy a frenzied period of transfer activity

Summer 2006

Sports lawyers Chris Farnell and Paul Fletcher endured a frantic summer of transfer dealings having just set up Sports boutique IPS Law.

The summer of 2006 transfer window saw IPS Law advise on summer moves worth more than £85m. Among those were Pascal Chimbonda, who moved from Wigan Athletic to Tottenham Hotspur for £6m and Joleon Lescott, who joined Everton from Wolverhampton Wanderers for £5m.

Having set up IPS Law in June 2006, Chris and Paul set to work immediately advising on Chelsea’s swoops for Michael Ballack and Andriy Shevchenko.

The pair also acted on contract re-negotiations for a number of top premiership stars.