The UK Bribery Act and the legal duty to prevent human rights harms

A report by the British Institute of International and Comparative Law (BIICL, with support from Hogan Lovells and Quinn Emanuel) looks at the legal feasibility of introducing a failure to prevent mechanism for business and human rights legislation, modelled on section 7 of the UK Bribery Act. This had been proposed by the UK Joint Committee on Human Rights (JCHR) in its 2017 report – a select committee of both the House of Commons and House of Lords in the UK Parliament. In short:

• A failure to prevent mechanism would establish a new legal duty for a company to prevent human rights harms in its own activities and business relationships
• This failure to prevent mechanism would establish a right to civil action by those affected for compensation for damages suffered as a result of a failure to prevent human rights harms
• The company could avoid civil liability by demonstrating that it has undertaken the due diligence required in the circumstances – ‘reasonable’ due diligence. (This is distinct from questions of criminal liability)
• What is reasonable would be determined on the facts of each case, with the authors recommending that guidance be produced alongside legislation to ensure due diligence does not become a ‘safe harbour’
• The law could also provide for preventative and injunction orders, as well as state-based oversight mechanisms

The report also describes survey responses (40) received primarily from large companies, in which the majority of respondents indicated that additional regulation may provide benefits to business: through providing legal certainty (82 %); through levelling the playing field, insofar as it will hold competitors and suppliers to the same standards (74 %); and by facilitating leverage with third parties, including in the supply chain (75 %). Similar benefits of legal certainty, levelling the playing field and facilitating leverage were reported by companies applying the UK Bribery Act.