Joint Committee on The Draft Corruption Bill Minutes of Evidence

Examination of Witness (Questions 620-639)


10 JUNE 2003

  Q620  Chairman: I do not know; we are still exploring this, but would that mean that you could have a wider but simpler definition which would pin itself to disloyalty, not just any old breach of duty but breach of a relationship which amounted to corruption? Or would that be going much too wide?

  Mr Justice Silber: I think in that case you are reaching into an area of having to work out what obligation is owed between the recipient and the donor and that immediately raises quite difficult points as to what their duties are going to be. In the situation that we were considering we were dealing with cases where there was a pre-existing duty and a pre-existing relationship.

  Q621  Baroness Whitaker: If I can just explore a little bit your focus on disloyalty as the thing which has to be prohibited, is it not the case that the person who might really be most cheated of all is the end user, either in Lord Campbell-Savours' tender where the end user is, say, the inhabitant of the resulting building, or somebody else who is cheated of what they should expect from a transaction, because two people have privately connived to make money out of it and to rig it? In your fundamental concept of disloyalty between the agent and the principal how can one cover the cheating of the end user?

  Mr Justice Silber: In most of the corruption cases, one would actually be dealing with the cheating of the end user because the cases that we came across that were being dealt with were cases usually of corruption of local authority officials to divert contracts to a particular company that would obviously be tendering at a less beneficial price, so to that extent almost invariably they would be. The way we looked at this was by focusing on the disloyalty to the relationship.

  Q622  Baroness Whitaker: So you are saying that the harm to the end user is incidentally covered in your concept of disloyalty?

  Mr Justice Silber: Yes.

  Q623  Baroness Whitaker: But it is not the primary target?

  Mr Justice Silber: No. It would be a serious aggravating factor in that case and there can be a number of cases of corruption where in fact the end user is not prejudiced at all, where money is paid by a contractor to an individual to get a contract which they would have got in any event, so the only loser in that case is the paying party. I would suggest that it is an aggravating factor if the end user is penalised but it should not be the litmus test for liability.

  Q624  Chairman: Corruption could not simply be cheating?

  Mr Justice Silber: No, but cheating might be another dishonesty offence.

  Q625  Dr Turner: If there were a situation, which I am quite sure does happen, where you have got a systematic cartel operating by contractors who are bidding for public service contracts and therefore the prices of the tender are artificially inflated, the public is, if you like, the end customer and the public purse is being cheated. Is that or is that not corruption?

  Mr Justice Silber: We are getting very close to the difference between corruption and misuse of public office. I presume it is public officials you are talking about.

  Dr Turner: Yes, but let us assume for the moment that the public officials are blissfully unaware of this. They are just getting the tender prices in but they are getting them not knowing that there is a certain amount of rigging going on between contractors.

  Q626  Lord Carlisle of Bucklow: Is the emphasis that you put on principal and agent partly because one has always looked upon corruption rather in the public sector where the person being corrupted is invariably an agent to the public rather than the private sector and that this Bill is now bringing the private sector and the public sector together and has still retained principal and agent centrally to the Bill?

  Mr Justice Silber: I think it really goes back to the point that the purpose of these sorts of corruption was the conferring of advantages in breach of somebody's obligation, I would say in a layman's sense for many a general fiduciary obligation that is owed, and that corruption was a form of interfering with that relationship. The point that has been put to me about the tenders and so forth raises the question about how you construe what the obligation is which is being interfered with and once you move away from interfering with an obligation of a fiduciary nature it does get very difficult to know exactly where that stops.

  Q627  Lord Carlisle of Bucklow: The language of principal and agent does not fit so easily in the private sector, does it?

  Mr Justice Silber: What could be done would be to make it clearer as to what the agent is. I cannot quite recollect it but, certainly in the Law Commission proposal there was a meaning of what is meant by "agent" and "principal".

  Q628  Lord Carlisle of Bucklow: Clause 11.

  Mr Justice Silber: And I think you have got it in Clause 11 as well. It is, I think, slightly wider in the Law Commission proposal in Clause 9. I am concerned as to how one would construe or how one would formulate a criminal offence where the arrangement was not a bid for contracts because you would have to work out some obligation and be able to specify what the extent and nature of it is. That might to be a practical difficulty.

  Q629  Chairman: I would like to move forward a little bit. We have looked at the principal and agent and you have explained your position on that. Sections 1 and 2 require that there shall be an advantage before there is an offence, and Section 3 does not refer to advantage. The person commits an offence if he performs his function as an agent corruptly. Where does advantage fit into that, or does it not? Do you have to show that there is an advantage there? You get it in Clause 10.

  Mr Justice Silber: Clause 10 will tell you how it is. There are three corruption offences of which the third one is Clause 3 linked to Clause 10.

  Q630  Chairman: So you bring advantage into clause 3 through Clause 10?

  Mr Justice Silber: Yes.

  Q631  Mr Stinchcombe: What happens then if a local government officer simply refuses to exercise his powers of discretion properly, just for reasons that he is a maverick and disruptive?

  Mr Justice Silber: In that case that will be moving on to misuse of public office on his part.

  Q632  Mr Stinchcombe: And that is not yet covered by this Bill?

  Mr Justice Silber: No, because that is a separate aspect. Lord Nolan's Committee looked into this. I took it further when I was at the Law Commission but I think it was then put on ice waiting for the decision of Dame Shirley Porter's case. It seemed desirable first to determine exactly what the existing law was before it was decided how to take that further. That is certainly an ancillary subject, the misuse of public office.

  Q633  Chairman: Is the reference here to an advantage in effect in all three sections because conceptually the Law Commission did not think there could be corruption unless an advantage was conferred or obtained, or is it that you wanted to limit the offence in this Bill to situations where an advantage was conferred or received? Can you have corruption without an advantage?

  Mr Justice Silber: Bearing in mind that advantage is widely stated (and, as you will see, for example, in 4(1)(a), which is omitting to do something, it can be a failure to do something), there has to be some form of benefit and I think the word "advantage" was used as being the most neutral word that the draftsman could think of but significantly it does consist of an omission to sue.

  Q634  Chairman: So you are saying that there could not be corruption in the absence of an advantage, construed, as you rightly say, in accordance with Clause 4?

  Mr Justice Silber: Yes, because that is the thrust of what is being done to interfere with the relationship.

  Q635  Chairman: And that is a necessary part of the concept of corruption?

  Mr Justice Silber: Yes.

  Q636  Chairman: It is not simply something you have done here? If you had said that it would be possible conceptually to have corruption without an advantage, my question obviously is going to be, why did you exclude that here? The answer you say is that it is not part of the nature of corruption.

  Mr Justice Silber: Not in the nature of it to—no, that is the nature of it. I think it has to be limited in that way.

  Q637  Chairman: Was the previous law limited in that way?

  Mr Justice Silber: I think it would have been limited in that way in the previous legislation. I do not think we had any suggestion that we should widen that at all.

  Q638  Baroness Whitaker: Speaking about widening and looking a little bit at the international dimension of this Bill, because of course it is a UK law but the Government hopes to implement the OECD conventions through it and the OECD partners are the governments which have big contractors and want there to be a level playing field, I do not think this international dimension was uppermost in your memorandum. Obviously, you were concerned with UK law but other jurisdictions have got a wide range of offences and one of them is trading in influence and we were looking as to whether that ought to be in. We asked Lord Falconer last week if he thought that should be covered and he said that it was already covered in Clauses 1 to 3, so we wondered whether you would agree that 1 to 3 do cover it.

  Mr Justice Silber: I was involved with the OECD's approach up to about 1997. I am not familiar with what they have done since.

  Q639  Baroness Whitaker: They have not got trading in influence in their conventions. It is just that some countries have used it when they implement the conventions.

  Mr Justice Silber: You get assistance from Clause 13 because that deals with corruption committed outside the United Kingdom.

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