Commercial lawyers are cashing in on Bribery Act scaremongering and taking part in ‘institutionalised corruption’ by setting up tax avoidance schemes, members of the House of Lords said last week.

In a debate on financial crime legislation, Liberal Democrat peer Lord Thomas of Gresford, a practising QC, said that commercial lawyers are warning company directors that if they do not take advice on the Bribery Act, they will end up in prison.

He said: ‘Directors are being warned that they will go to hell if they are not prepared to pay for advice from commercial lawyers on current procedures.’

Labour peer Lord Haskel alleged that ‘armies of lawyers’ take part in ‘institutionalised corruption’ by setting up tax avoidance schemes, and ensure that ‘even though the letter of the law is respected, increasingly immoral ways are found of perverting the spirit of the law to ensure that tax is avoided’.

Treasury minister Lord Sassoon said that the government will publish its delayed guidance on the Bribery Act ‘shortly’.

He said that justice secretary Kenneth Clarke wants to implement the act in a way that ‘certainly does not make this another gold mine for lawyers advising on either implementing or picking up the consequences of the act’.

The Bribery Act introduces a corporate offence of failing to prevent bribery, under which company executives could face personal criminal liability if found to have connived or consented to offering or receiving a bribe.

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Companies will have a defence if they can show they had adequate procedures in place to prevent bribery.

Conservative peer Baroness Wheatcroft said that the act should not be implemented until clear guidance is given on what constitute facilitation payments and hospitality.

Thomas said that ‘adequate procedures’ must be defined. He said: ‘Instead of the state giving advice to a firm, you have to go to very expensive lawyers and others to get that advice.

'The act is perfectly straightforward. The concepts are perfectly clear and common sense is required.’

Liberal Democrat peer Lord Phillips of Sudbury, a solicitor, said: ‘Legislation can be an impediment to integrity. Too much of it plays into the hands of the smart boys, the lawyers and the accountants.

'For people who are involved in the different aspects of the City, it reduces their sense of their own moral autonomy, their own ability to distinguish right from wrong and to do good rather than bad.’