Joint Committee on The Draft Corruption Bill Report

1  Introduction

1. The Joint Committee was appointed on 24 March to consider the draft Corruption Bill published on that day as Cm 5777. The draft Bill is based on a Law Commission draft issued in 1998 as part of the planned codification of the criminal law. This draft Bill is thus the product of a long and detailed process of consultation. Its provenance includes:

·  Royal Commission on Standards in Public Life (the Salmon Commission) 1976 Cmnd 6524

·  First Report from the Committee on Standards in Public Life 1995 Cm 2850

·  Home Office paper Clarification of the Law Relating to the Bribery of Members of Parliament December 1996

·  Law Commission paper Legislating the Criminal Code: Corruption 1997 Consultation Paper no 145

·  Home Office paper The Prevention of Corruption: Consolidation and Amendment of the Prevention of Corruption Acts 1889-1906: A Government Statement June 1997

·  Law Commission report Legislating the Criminal Code: Corruption 1998 Report no 248

·  Joint Committee on Parliamentary Privilege report March 1999 HL Paper 43 and HC 214

·  Home Office White Paper Raising Standards and Upholding Integrity: the prevention of Corruption published in June 2000 as Cm 4759 January 2000 Cm 4557

·  Fourth Report 2000-01 from International Development Committee of the House of Commons on Corruption March 2001HC 39-I.

2. The draft Bill seeks to replace both the common law offence of bribery and most of the statutory offences contained in this legislation:

·  Public Bodies Corrupt Practices Act 1889

·  Prevention of Corruption Act 1906

·  Prevention of Corruption Act 1916.

3. The draft Bill also seeks to ensure that UK law complies with various international agreements which are either in force or in preparation, such as:

·  OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, Paris, 17 December 1997 (Cm.3994)

·  Council of Europe, Criminal Law Convention on Corruption (ETS no.173) and Civil Law Convention on Corruption (ETS no. 174) (both Strasbourg 1999)

·  The Convention drawn up on the basis of Article K.3(2)(c) of the Treaty on European Union on the fight against corruption involving officials of the European Communities or officials of Member States of the European Union

·  The Draft UN Convention on Corruption

Conduct of the inquiry

4. At the outset the Committee set out the main matters on which it wished to take evidence:

a) What is the background to the draft Bill and what other options could have been pursued? What are the reasons for any changes from the Law Commission's 1998 report (No. 248) and the 2000 White Paper (Cm. 4759)?

b) Whether proposed definitions are workable and sufficient:

c) Whether they will be readily understood by police, prosecutors, jurors, the public etc

i.  Whether specific offences should have been proposed for specific situations

ii.  The effect of not making the new offences retrospective

iii.  The effect of removing the presumption of corruption

iv.  Whether the agent/principal analogy is still relevant, in particular in the case of public acts

v.  The treatment of facilitation payments

vi.  Should there be a public interest defence?

d) Whether the proposals are compatible with international obligations and how they compare with equivalent law in other countries.

e) Omission of misuse of public office and trading in influence.

f) Waiver of parliamentary privilege in cases involving peers and MPs:

i.  Attorney General's consent to prosecution

ii.  relationship with Registration of Interests, Codes of Conduct and Electoral Commission requirements on political donations

5. As our inquiry into the draft Corruption Bill progressed, the Committee realised that these matters might require to be refocused. The principal questions we have thus considered are:

a) Is the existing law on corruption so deficient that it is necessary now to legislate?

b) If so, does the draft Bill criminalise conduct which is corrupt without criminalising any conduct which is not?

c) Further, does the draft Bill state clearly what types of conduct are punishable as corrupt in language which can readily understood by the police, by prosecutors, by jurors and by the public, including - especially - the business and public sector communities, and their advisors, both here and abroad?

d) Should parliamentary privilege be waived in corruption cases?

e) Should the Attorney-General's consent be required for prosecution for corruption offences?

f) Should the intelligence services be exempt from prosecution for corruption offences?

6. It is under the above headings - and especially the second and third - that all of the other questions, important but subsidiary, fall properly to be considered: what is the essence of corrupt conduct? How might it be defined? What distinguishes corrupt conduct from lawful conduct? Does this Bill draw that line in the correct place? In particular, is Clause 5 of the Bill - which confined corruptness exclusively to a principal/agent relationship - both complete and robust, and is it clear so that it can readily be understood by all relevant parties?

7. We sought evidence from interested parties and are publishing with this report the memoranda we received and the transcripts of the eight sessions of oral evidence taken in the course of this inquiry. The full list of memoranda and witnesses appears on pages 97 and 98..We are very grateful to all those who gave us the benefit of their knowledge and experience. As specialist adviser we appointed Peter Alldridge, reader at Cardiff Law School and Professor-elect at Queen Mary College, London. His advice and commitment have been invaluable. The other Committee staff are listed on the inside cover of the report.

8. The Committee was not appointed until the day the draft Bill was published: 24 March. We thus had no time to prepare for the inquiry in advance of publication. The Committee was ordered to report in four months - by 24 July. Prior commitments and the Easter recess meant we could not start taking oral evidence until early May. In all we have held 18 meetings, usually convening twice a week.

9. We have considered first what are the essential elements of corruption and how the criminal offences should be framed. Secondly, we have examined the issue of parliamentary privilege. Thirdly, we have looked at the Attorney-General's consent, the intelligence services and other matters.

The need for new legislation

10. The existing law covers:[1]

a) The common law offence of bribery. This is said in the legal textbook Russell on Crime to be the receiving or offering [of] any undue reward by or to any person whatsoever, in a public office, in order to influence his behaviour in office, and incline him to act contrary to the known rules of honesty and integrity.[2]

b) The Public Bodies Corrupt Practices Act 1889. This created an offence of corruptly giving to (or receiving by) an official of a public body. It uses terms such as "corruptly give, promise, or offer any gift, loan, fee, reward, or advantage … as an inducement to or reward for …. doing or forbearing to do anything …. actual or proposed, in which such public body ….is concerned…"

c) The Prevention of Corruption Act 1906. This extended corruption to the private sector and introduced the concept of an agent as someone acting for another person or for a public authority.

d) The Prevention of Corruption Act 1916. This increased the penalty and now defines 'public body' widely to include 'public and local authorities of all descriptions'. It also introduced the presumption of corruption in public sector cases. This shifted the burden of proof onto the defence to show that a given payment was not corrupt.

11. The number of prosecuted offences of corruption in recent years is set out in the chart below. The Audit Commission told us that very few cases of corruption are reported to them. Since 1995/96 the number of detected cases has averaged 43 a year, with annual losses averaging £262,000.[3] On average, 21 people were prosecuted under three Prevention of Corruption Acts in each year between 1993 and 2003.[4] Since 1988, the Serious Fraud Office has prosecuted seven cases where corruption was a charge and a further three are currently under investigation.[5] By comparison, an average of 23,000 defendants were prosecuted each year for fraud between 1997 and 2001[6] and an average of three people have been prosecuted for insider dealing in the 10 years to 2002.[7] The figures for corruption offences need to be treated with caution, partly because the borders between these and other offences are uncertain and partly because there is thought to be under-reporting of offences.

12. We have received no evidence which causes us to dissent from the conclusion of the Law Commission in 1998 that the present law is in an unsatisfactory state and that the common law offences of bribery and statutory offences of corruption should be replaced by a modern statute.[8] As Mr Justice Silber, who was responsible for the Law Commission report, told us:

"The present law suffers from numerous defects. It is drawn from a multiplicity of sources. Corruption offences are to be found in at least eleven statutes, the most important of which are the Prevention of Corruption Acts 1889 to 1916. Much of that legislation was impulsive being prompted by contemporary problems or fears. Thus it is neither comprehensive nor consistent. There are also many overlapping common law offences such as misconduct in public life, specific bribery offences, embracery (bribery of juries). Against that background, it was not surprising that the Royal Commission on Standards of Conduct in Public Life (Chairman: Lord Salmon) recommended the rationalisation of the statute law on bribery in its report in 1976".[9]

13. Over the past few years there has been a growing international movement on the part of the developed and the developing world to eradicate corruption, demonstrated by a number of international instruments and initiatives. It is in the interests of the United Kingdom to be seen to play an effective part in this field, not least because of its pre-eminent position in world financial markets. While the passage of time and new international obligations are two factors pointing to the need for new legislation, a third is the increasingly complex relationship between the public and private sectors. The old statutes are based on a clear separation that may no longer be appropriate .

14. If the current law is "obscure, complex, inconsistent and insufficiently comprehensive"[10], we must consider whether the draft Bill avoids these criticisms. In particular, our evidence shows there is a general desire for clarity in the new legislation on corruption. This is not just for the benefit of those who may be involved in a trial - judge, jury, defendant, lawyers. It is even more important that the law should be understood by those going about their normal business so that they understand how to abide by it and do not take decisions which lead to the commission or apparent commission of a criminal offence. So clarity is a key test when considering this draft Bill. The wording should be easily translatable into foreign languages to enable mutual legal assistance with other jurisdictions. Such clarity may be aided by guidance notes but the Bill itself should be clear and understandable.

15. Cases involving corruption can often involve other offences and people have been prosecuted for those other offences as well as, or instead of, corruption. The variety of cases involving corruption which have been handled by the Crown Prosecution Service in recent years is set out on page 160 of our written evidence. These offences include:

·  Offences under the Theft Acts

·  Conspiracy to defraud

·  Misconduct in public office

·  Perjury

·  Perverting the course of justice

The criminal offences

16. Following the scheme in the Law Commission's draft Bill of 1998, this draft Bill builds on the current statutory corruption offences and the common law bribery offence to create three broad new offences:

a)  Corruptly conferring an advantage (Clause 1),

b)  Corruptly obtaining an advantage (Clause 2) and

c)  Performing functions corruptly (Clause 3).

17. In these Clauses the only word which implies illegality is 'corruptly'. So it is important to know how 'corruptly' is interpreted. While most people think they know what it means, in practice opinions differ. 'Corruptly' in Clause 1 is defined in Clause 5 in terms of conferring an advantage, giving examples of the actions and intentions of three people, A, B and C. This definition is expressed in terms of agents and principals. The offences, drawn from the existing statutes, are combined in the draft Bill to apply both to the public and private sector. There is a distinction in that the 'consent of the principal' (Clause 7) is a defence in private but not in public sector cases. Defining offences in terms of A, B and C could be read as illustrative or as exclusively definitive. It is not clear which it is.

1   For a full description of the present law, see the Law Commission's 1998 Report Legislating the Criminal Code: Corruption No 248 Back

2   12th ed 1964 p 361 Back

3   Ev 159 DCB 28 para 6 Back

4   Official Report I July 1999 col 252-3W and 6 November 2001 col 187w Back

5   Ev 16 Back

6   Crime in England and Wales 2001/02, supplementary volume, Home Office Back

7   Official Report 26 January 2002 c1144w Back

8   Law Commission No 248 para 2.33 Back

9   Ev 98 para 3 Back

10   Law Commission 1998 No 248 para 1 Back

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