Insurance Broker Loses Sentence Appeal in Corruption Case

Bribery and corruption is very much a hot button issue with the Bribery Act 2010 scheduled to come into force on 1st July 2011. Meanwhile, a recent Court of Appeal judgment on the current law shows that the courts are likely to take a tough line on cases arising under the new Act.

In R. v. Messent, M was the head of PWS, a London firm of reinsurance brokers for a period of eight years. Between 1999 and 2002, PWS made a series of corrupt payments to secure the renewal of PWS’s contract as the reinsurance broker for a major electrical project in Costa Rica. M oversaw 41 of those payments. Just under $2m was paid and then clawed back to PWS as disguised insurance premiums. Essentially, the Costa Rican government was charged for the corrupt payments to itself.

M, who had no previous convictions, was arrested. Initially in interview, he denied committing the offences. Eventually, however, he pleaded guilty to two counts of corruption and asked that thirty-nine other offences be taken into consideration. M was sentenced to 21 months' imprisonment, disqualified from acting as a company director for five years and ordered to pay £100,000 in compensation. In sentencing M, the Judge gave him a discount for his guilty plea and also took account of the impact of the sentence on M's family.

M appealed against his sentence, arguing that that the sentencing range of between four and five years adopted by the Judge had been too high, particularly in the light of the fact that the corruption had been commercial, rather than political, corruption and that it did not fall within the top of the range of criminality.

M’s appeal got short shrift from the Court of Appeal. The Court did not accept the distinction between political and commercial corruption. It referred to the United Nations Convention against Corruption, which states that corruption undermines a government's ability to provide basic services. It follows that commercial corruption amounts to deliberate and intentional wrongdoing that causes serious harm. The Judge’s approach to the case could not be criticised.

Rightly or wrongly, it is often said that the courts are more tender-hearted when it comes to white-collar crime. When it comes to bribery, however, those who decide to wing it assuming that the worst that can happen is a slap on the wrist or a company fine may find that they come unstuck. They could end up enjoying a spell at Her Majesty’s pleasure.

If you would like to know more, please contact David Dees or Nick Crook.

Filed: 13/04/2011 12:02:25