New Case May Test the UK Bribery Act's 'Adequate Procedures' Defence

On 17 April, the UK’s Serious Fraud Office (SFO) charged a UK-based insurance company, United Insurance Brokers Limited (UIB) with ‘failure to prevent bribery’ in connection with its international reinsurance activity in Ecuador, under section 7 of the UK’s Bribery Act 2010 (UKBA).

This is noteworthy for at least two reasons:

• It is a sign that while the enforcement strategy may be shifting across the pond, the UK’s SFO is active and unwavering in prosecuting international bribery and corruption; and
• If the UIB case should go all the way to trial, the SFO will test the ‘adequate procedures’ defence for the first time. The latter trial would be useful for informing how companies shape their compliance programs – not only for UKBA purposes, but also for the purposes of the new ‘failure to prevent fraud’ offence, which comes into force on 1 September 2025 and has a ‘reasonable procedures’ defence based on similar principles.

Quick recap of the corporate offence and the ‘adequate procedures’ defence

The UKBA corporate offence of ‘failure to prevent bribery’ was introduced in 2010 and holds companies criminally liable for failing to prevent corrupt payments by employees or associates anywhere in the world. Companies have a defence if they can demonstrate that they had ‘adequate procedures’ in place to prevent bribery and corruption. In essence, this requires a company to have a corporate compliance program that is tailored and proportionate to its overall bribery and corruption risk.  

The offence has only been used on a handful of occasions, but has seldom gone to trial. The offence underlies several of the UK’s deferred prosecution agreements (DPAs) and more recent charges have been resolved by way of guilty pleas and fines, without going to trial. 

Lessons on what ‘adequate procedures’ look like

To date, the only real test of the ‘adequate procedures’ defence (and useful lessons for compliance) came in the Crown Prosecution Service (CPS) trial against Skansen Interiors Limited (Skansen) in 2018. Skansen argued that, given its small size, and despite the absence of a specific anti-bribery policy, it had ‘adequate procedures’ to prevent bribery in the form of a general ethics policy (advertised to staff through posters in the office), a policy requiring at least two signatures for all significant payments, and contractual provisions prohibiting bribery.

The CPS successfully argued that this was inadequate even for Skansen’s small size (fewer than 30 staff at the parent company and a single small office) because, inter alia, there had been no corruption training for staff, no designated compliance officer, no analysis/assessment of the risk of bribery within its business, and no bribery-specific controls introduced to meet that risk. The CPS was clear that it intended the Skansen prosecution to send a message to companies of all sizes about the need for targeted anti-corruption risk assessments and compliance programs.

After a lull of seven years, if the UIB case goes to trial, we may finally have further insight into what ‘adequate’ compliance procedures should entail.   

Other key developments

The SFO’s charging of UIB coincides with two other notable developments, which are also set to have a bearing on UK authorities’ use of the new ‘failure to prevent fraud’ offence:

• The Home Office’s 22 April 2025 announcement that Jonathan Fisher KC has begun work on part 2 of his ‘Independent Review of Disclosure and Fraud Offences,’ which will be the first independent review of the UK’s fraud legislation since 1986. This part of his review will examine the greatest challenges faced by law enforcement in prosecuting fraud offences, and consider issues arising at all stages of the ‘fraud life cycle’ and criminal justice system (e.g. detection and reporting, disruption, investigation, prosecution, courts, penalties, and rehabilitation). The review will also consider and analyse options for incentivising informants and whistleblowers to assist UK authorities’ investigations – a reform proposal that has been championed by the SFO’s Director, Nick Ephgrave, who has often highlighted that over 700 informants travelled to be informants in the United States (where incentive schemes operate) rather than the UK.
• The SFO’s 24 April 2025 announcement of new corporate cooperation guidance and a major policy shift in relation to DPAs, in an effort to raise waning levels of corporate self-reporting, cooperation, and negotiated settlements, which is discussed in more detail here.

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