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Corporate Hospitality – Making Clients Offers They Might Refuse

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The usual summer season of corporate hospitality sporting events is in full swing. Rupert Wright, a corporate services lawyer with Charles Lucas & Marshall, explains why legislation may be prompting some companies to think twice about accepting an invitation.

Rupert Wright

Rupert Wright

As well as Ascot, Wimbledon and Henley, the season of corporate entertainment has a major addition this year with the London Olympics. For companies looking to build relations with clients and suppliers in an effort to retain or secure new business, these events can present useful opportunities.

However, the introduction of the Bribery Act 2010 (the ‘Act’) in July last year has meant that companies which offer corporate entertainment to their clients now have additional factors to consider.

The Act contains an offence which is relevant to provision of corporate hospitality by companies, namely that of offering a bribe to an individual in the private sector, or to a UK public official.

The bribery offence applies in two cases: first, where a person intends the advantage to bring about improper performance by another or to reward such improper performance. Second, where a person knows or believes that the acceptance of the advantage offered or promised, itself, constitutes the improper performance of a relevant function or activity.

The law refers to the provision of a ‘financial or other advantage’; a gift or an invitation to a sporting event could, potentially, be caught by both of these categories.

The Ministry of Justice has provided a guidance note on the Act. It recognises the important role that hospitality plays in business and states that there is no wish to criminalise such behaviour.

The difference between legitimate corporate hospitality which is lawful and an unlawful attempt to bribe someone lies in the intention of the provider/giver to influence and secure a business advantage. The intention of a person is judged by what a reasonable person in the UK thought.

The guidance note states that the ‘more lavish the hospitality or the higher the expenditure…the greater the inference that is intended to influence a business advantage in return’. In its view, an invitation to foreign clients to attend a Six Nations fixture at Twickenham as part of a company’s PR programme and targeting its clients would be extremely unlikely to constitute an offence under the Act. This is because there is unlikely to be the required evidence of an intention to induce ‘improper performance’.

So, hospitality which is reasonable and proportionate to what is generally accepted as normal by an industry sector and achieves a ‘legitimate business purpose’ is therefore unlikely to fall foul of the Act.

New laws often bring uncertainty for those affected by them – notwithstanding the comforting words of the Ministry’s guidance note. It might therefore not surprise you to hear that some companies have erred on the side of caution by trimming hospitality packages – and have found some clients who are now reluctant to accept offers of hospitality they would previously have taken up without further thought.

For further information contact Rupert Wright on 01635 521212 or

Written by Rupert Wright

June 26th, 2012 at 10:16 am

It’s Good To Talk

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There is increasing evidence that courts and employment tribunals now expect litigants to seriously consider some form of mediation before legal action reaches the courtroom. Paul Trincas and Andrew Egan, corporate lawyers with Wantage solicitors, Charles Lucas & Marshall explain why businesses may soon have very little option but to mediate.

Paul Trincas
Paul Trincas

Business disputes can be expensive both from a time and cost perspective. Although the courts and tribunals cannot compel anyone to attempt to resolve their business or employment dispute, they expect the parties involved to at least have considered some form of alternative dispute resolution.

The recent Court of Appeal case, Rolf v De Guerin considered various issues – including the defendant’s refusal to mediate.

Although the defendant won at trial the claimant appealed on a number of grounds including the cost order which the trial judge had made in favour of the defendant. The claimant argued that the defendant’s refusal to take part in mediation amounted to unreasonable behaviour.

On appeal, when asked by the court why he had been unwilling to mediate, the defendant stated that if he had participated in mediation he felt he would have had to accept ‘his guilt’ and that he wanted his ‘day in court.’

Whilst the judge acknowledged that mediation might not have provided a solution, he felt that it was unreasonable on the defendant’s part to spurn offers to enter mediation.

The lesson to be drawn from this is that the courts now expect litigants to seriously consider and enter into some form of mediation. You may succeed in your claim but if you fail to engage in mediation without a legitimate excuse, you are likely to have costs ordered against you.

Employment Tribunal reforms: will employers feel forced to compromise?

Andrew Egan
Andrew Egan

The government proposes reforms to Employment Tribunals this year with the aim of reducing the number of claims.

It has been argued this may adversely affect small to medium sized businesses because  a form of compulsory early mediation through ACAS will force more cases to be settled out of court on a financial basis, through compromise or settlement agreements.

The concern is that employers may be more tempted to settle this way because of the potential level of costs the government is proposing for employers who might otherwise lose a tribunal case.

Many employers, however, already use compromise agreements to settle actual or potential employee claims anyway. Average settlement figures tend to be less than the full cost to employers of defending a case in the tribunal and will be cheaper than a potential fine of £5,000, plus the cost of reimbursing the employee’s claim fees and having an award of compensation against the employer.

Obviously settlement by way of mediation saves time and money and the inconvenience and hassle of having to attend the tribunal and give evidence rather than being at work and being productive.

What are the advantages of mediation?

Mediation will bring a certainty of outcome. It will avoid either the costs of proceeding to court, or, alternatively, if court proceedings have started, it will avoid having to proceed to trial with all the costs and uncertainties involved.

It is also independent of the court process and is a relatively informal procedure. Although the mediator facilitates settlement, it is actually the parties themselves who come to their own agreement and model the terms of any agreement.

What costs are involved?

These can vary, depending upon the nature of the dispute, the amount involved, the time required and the mediator appointed. The parties will have to share the mediator’s costs equally.

If the parties have a legal representative and wish to have their representative present, then the parties will have to pay their respective legal advisors. It is normally only in more complex or larger claims that parties wish their legal representatives to be present.

If the outcome of mediation is successful, then it may well be time and money well spent.

For further information contact Paul Trincas on or for employment related issues, contact Andrew Egan on or call 01235 771234.

Written by Paul Trincas

March 8th, 2012 at 9:40 pm

Posted in Mediation,News

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