Draft Bribery Bill - Joint Committee on the Draft Bribery Bill

Draft Bribery Bill - Joint Committee on the Draft Bribery Bill Contents

3 THE OFFENCES OF BRIBING AND BEING BRIBED

17. The two proposed offences of bribing (clause 1) and being bribed (clause 2) apply to individuals who offer or accept, directly or indirectly, an "advantage" of any kind in connection with the "improper" performance of the recipient's functions. The functions can include acts of a public nature and, among other things, any act connected to a business, trade, profession, or in the course of employment in both the public and private sectors (clause 3(1)).

18. The offences are divided into six separate "cases" or scenarios. Under each the prosecution has to prove an objective test of "improper" performance based on whether a "reasonable person" would consider that the recipient had breached an expectation of "good faith", "impartiality" or "trust" (clause 3). As considered below in para 19, knowledge or intention of improper performance must also be proven by the prosecution in four of the statutory cases under clauses 1 and 2 (cases 1 to 4).

Clarity of the "improper" performance test

19. The task of creating a legal test that clearly and predictably differentiates wrongful bribes from legitimate payments proved too much for the 2003 draft Corruption Bill. There was no shortage of alternative proposals put forward during the most recent consultation exercise in 2007.[42] The Law Commission argues that its proposed improper performance test "strike[s] an acceptable balance between the need for simplicity of expression, and the need for certainty in obligation", before adding:

20. In order to ensure that the provision is fully understood by businesses and other affected parties, the Law Commission has suggested the following "lay summary" for clauses 1 to 3:

Do not make payments to someone (or favour them in any other way) if you know that this will involve someone in misuse of their position;

Do not misuse your position in connection with payments (or other favours) for yourself or others.[44]

21. The Directors of Public Prosecutions and the Serious Fraud Office and the Head of the Overseas Anti-Corruption Unit of the City of London Police endorsed the Commission's view that terms such as "good faith" could be applied by a jury satisfactorily, based in part on their experience that juries had not found it difficult to apply tests framed in similar language under the Fraud Act 2006.[45] The law firm, DLA Piper, also stated that it did not anticipate difficulty in explaining the proposed offences to businesses that would then need to comply with the law.[46] Particularly strong support was offered by Dimitri Vlassis, Chief, Crimes Convention Section in the Division for Treaty Affairs at the United Nations, and Colin Nicholls QC of Three Raymond Buildings who considered that the use of a test involving good faith, impartiality and trust could become a model for bribery laws in other countries.[47]

22. On the other hand, relatively widespread concern about the workability of the test was expressed by business and some legal representatives. For instance, both the Confederation of British Industry and the International Chamber of Commerce (UK) viewed it as "unrealistic" to expect businesses to adopt a "quasi-judicial role" by stepping into the shoes of a "reasonable person" under the draft Bill's objective test.[48] Professor Horder sought to counter this argument by emphasising that this is precisely what businesses are already required to do when assessing potential liability for negligence or gross negligence.[49]

23. The main objection to the new provision, however, centred on the terms used in clause 3, including the potential vagueness of "good faith", "impartiality" and "trust". The Law Commission decided against giving these terms a strict legal meaning, having been influenced by representations from the senior judiciary that these should not be linked to their civil law equivalents.[50] Lawrence Hammond of Thales UK, among others, called for the clarification of the terms, either on the face of the Bill or through guidance:

24. Professor Horder argued that clauses 1 to 3 used "ordinary English words" which a jury should be trusted to apply with "common sense", although he considered that additional guidance could be issued about their meaning.[52] Jeremy Cole of the law firm Lovells did not agree that the language was clear, and stated that the "over-complicated" and "distracting sub-tests" should be removed, leaving an unqualified test of "improper" performance:

25. The benefits of using an unqualified test were doubted by Professor Horder, who stated that it increased the risk of uncertainty and inconsistency:

He also rejected the alternative of adding detailed "stipulative definitions" to provide greater certainty on the grounds that this would risk making the law too complex, rigid and potentially subject to argument about unforeseen gaps.[55]

26. The Confederation of British Industry was joined by the International Chamber of Commerce (UK), among others, in calling for an amendment to clarify that "all the circumstances" can be taken into account when assessing the expectations of a reasonable person:

27. We also considered the alternative of retaining the current legal term "corruptly" as the test to differentiate between bribes and legitimate payments. The Director of Public Prosecutions stated that the test had worked adequately in practice, although he noted that the small number of cases and a wide range of charging options might have masked potential difficulties associated with this test.[57] Professor Horder accepted that "corruptly" had the attraction of simplicity, but stated that it was a "very vague term" the meaning of which had been subject to inconsistent decisions.[58] In particular, the Law Commission concluded that a "lack of clarity surrounding this critical adverb weakens the effective application of the [current] law".[59] Colin Nicholls QC and Bond, the UK membership body for non-governmental organisations working in international development, expressed their preference for the approach taken in the draft Bill.[60]

28. Jeremy Carver of Transparency International UK emphasised that the Law Commission's proposals represented the outcome of years of compromise on differing views over the best way forward. He was sceptical whether, in view of this, it would be prudent to introduce significant amendments.[61] We note that no witness pressed for the Bill to be abandoned in favour of starting again. The improper performance model also gained widespread support during the consultation process and, according to Professor Horder, broadly reflects the law in several other countries including France, Germany and Italy.[62] The concept of an advantage being "undue" or "improper" is itself rooted in various international agreements, including the OECD and UN conventions.[63]

Scope of "improper" performance

29. It is important that the draft Bill, like any criminal legislation, does not catch conduct that in common acceptance should not be viewed as criminal. Equally, it must not leave any gap which allows a plainly wrongful act to remain outside the criminal law.

(A) TOO BROAD?

30. The Law Commission's proposals are intended to avoid catching simple breaches of contract or minor tortuous wrongs.[64] While the Law Commission acknowledged that there will remain "grey areas", it considered that appropriate outcomes would be achieved by the "improper" performance test. For example:

Paying a security guard a higher salary to leave their existing job in order to work for a competitor might amount to the tort of wrongful interference with contractual relations, but would not in the Law Commission's view be a bribe because there would be no breach of impartiality or trust;
Paying a security guard to turn a blind eye while a theft takes place would also amount to the tort of wrongful interference with contractual relations, but would amount to a bribe because there would be a breach of a position of trust.

31. We considered the scenario of a senior banker being asked by a rival bank to induce his or her trading team to join that rival in return for increased remuneration, including whether or not this would breach an expectation of good faith. James Maton of the UK Anti-Corruption Forum agreed that it would be caught by the offence and stated that this illustrated the potential for the draft Bill to criminalise acts that are "best dealt with in the civil courts".[65] While the same potential was acknowledged by Monty Raphael of the law firm Peters and Peters, he also observed that it is difficult for offences to apply satisfactorily to every type of "conduct or delinquency".[66] He considered that prosecutorial discretion should be relied upon to ensure that criminal charges were pursued only where appropriate.[67]

32. Professor Horder noted that such concerns could be addressed by the insertion of a "for guidance" provision in the draft Bill, as follows:

'In relation to "improper performance", a person shall not be found guilty under clauses x to x simply in virtue of having committed a wrong in civil law'; or, less pointedly,

He did not, however, consider that inserting such a provision would be particularly helpful, given his view that the main solution to the potential problem was to trust the "collective common sense of judges and jurors".[69] On the specific example of the senior banker, he stated that whether such an action would be caught by the Bill's provisions would depend on the circumstances:

If the other firm has said simply, 'look, there will be advantages for all of you in coming here in salary terms', then I don't see a jury finding bribery, or even a judge leaving a case for the jury to consider.

(B) TOO NARROW?

33. There are examples of gaps in the current law that would be addressed under the draft Bill. For instance, we note the position of Parliament itself in our chapter on parliamentary privilege. We heard arguments, however, that two scenarios in particular would not be covered by the draft Bill:

A member of the public who is paid to vote for a particular candidate during an election may not be subject to an expectation of good faith, impartiality or trust;[71]
An agreement between two Boards of Directors to divide up market share between themselves may also not give rise to an expectation of good faith, impartiality or trust.

34. The Law Commission stated that these kinds of issue would be caught by other (more appropriate) criminal offences forming part of competition or electoral law.[72] Professor Horder argued that there were therefore no remaining gaps, provided that the draft Bill was seen as one part of the wider range of offences available to prosecutors.[73] Several witnesses agreed, including the Director of Public Prosecutions.[74](We note in particular the overlap between bribery and conspiracy to defraud).

"Improper" performance: our view

35. We endorse the "improper" performance test that has been developed by the Law Commission to distinguish bribes from legitimate conduct under the two proposed offences of bribing (clause 1) and being bribed (clause 2). In particular, the reliance on a reasonable person's expectation of "good faith", "impartiality" and "trust" represents a careful balance between simplicity, certainty and effectiveness. It also takes into account the approach adopted in other countries and international anti-bribery conventions.

36. We do not consider that the proposals in the draft Bill, taken together with existing criminal offences, will leave any gaps in the law. We do, however, acknowledge the concern that conduct which ought to be viewed as a civil wrong may, in future, be criminalised. The limited time for completing our inquiry has prevented us from exploring possible solutions to this problem, although we note the potential for developing an effective "avoidance of doubt" provision. The Government must address this issue before introducing the Bill into Parliament in order to minimise the need for reliance on prosecutorial discretion and maximise certainty for all those who will be asked to comply with, and enforce, the new law.

Cultural differences

37. A discrete, but important, issue concerns the circumstances in which different cultural practices can be taken into account under the "reasonable person's" expectation of good faith, impartiality and trust. In particular, the standards of conduct in the United Kingdom and European Union are not "universally recognised".[75] The draft Bill avoids these challenges to a great extent by adopting an alternative test in relation to the bribery of foreign public officials under clause 4, addressed below (in chapter 4). However the offences under clauses 1 to 3 will apply to acts abroad within the private sector and (potentially) acts in the public sector, including attempts to influence candidates standing for public office overseas.[76]

38. The Law Commission has stated that individuals should not be able to escape conviction simply because their otherwise criminal conduct amounts to a tolerated practice abroad.[77] On the other hand it accepts that some cultural norms, including the extent to which one country entertains more lavishly than another, should be taken into account as part of the test of whether an expectation of good faith, impartiality or trust has been breached.[78] This leaves a difficult dividing line to be drawn. The Director of the Serious Fraud Office anticipated that expert evidence on local practices and conditions would routinely be called as part of this exercise.[79] We note that this could substantially increase the cost and complexity of a trial.

39. Colin Nicholls QC warned that taking account of cultural differences could lead to "gaps" emerging in the law.[80] Concerns of this kind led Monty Raphael to draw an analogy with a "single criminality" approach under which a British juror would apply British standards irrespective of the cultural context in which the offence took place.[81] The Director of Public Prosecutions stated that he was "slightly uncomfortable with it being an English or British test". He favoured an approach based on the emerging "international law of accepted behaviour" or a test that at least took account of "some factors" which differ between countries:

40. The Law Commission stated that one possibility was requiring juries to apply the standards of a "person of moral integrity". It nonetheless accepted that the issue would need to be addressed, through the development of guidelines for juries.[83] Continuing uncertainty over the approach of the draft Bill to this issue led Jeremy Cole to propose the provision of an explanatory note spelling out the test to be adopted. For the same reason Professor Wells suggested that it might be desirable to add an "avoidance of doubt" provision on the face of the Bill.[84]

41. While we accept that it may occasionally be appropriate to consider cultural variations on issues such as hospitality, a careful line needs to be drawn. The draft Bill must in general prevent individuals from relying on local customs to justify corrupt practices, otherwise its effectiveness will be seriously undermined. We see merit in the Law Commission's proposal that jurors should apply the standards of a "person of moral integrity". Nevertheless, the evidence that we received revealed continuing uncertainties over what this would mean in practice. The Government should clarify its intended approach to the important and difficult matter of cultural variations before the Bill is introduced.

Knowledge and intention: clause 2

42. The active bribery offence (clause 1) requires an individual to know or intend that the recipient has improperly performed, or will improperly perform, their functions. With the exception of case 3, there is no requirement for knowledge or intention under the passive bribery offence (clause 2, cases 4 to 6). This has the effect that a recipient can be convicted of being bribed under clause 2 based on an objective assessment of their fault, but without proof of subjective wrongdoing.

43. A number of witnesses described clause 2 (cases 4 to 6) as an "absolute" or strict liability offence, which they viewed as being inconsistent with the seriousness of a bribery conviction.[85] In particular, Clifford Chance highlighted that it risked catching individuals for an act which "may flow from a misunderstanding, or a mistake […] rather than from any criminal intent" and was therefore potentially non-compliant with human rights legislation.[86] Similarly, Louise Delahunty of Simmons and Simmons stated that the lack of intention in cases 4 to 6 offended "basic principles" and set a potentially dangerous precedent.[87]

44. Proof of knowledge or intention (under cases 4 to 6) was regarded as "superfluous" by Professor Horder. He noted that a strong majority of those who responded on this issue as part of the Law Commission's consultation were in favour of the approach taken by the draft bill:

[I]t is vital that companies know what they can and cannot do, in seeking to secure business from other companies and from Governments. In that regard, as I said to the Committee, P's [i.e. the payer's] acting on an intention that R [i.e. the recipient] should behave improperly provides the 'line in the sand' that must not be crossed.

However, when it comes to R's conduct, matters are different because R is occupying a role (customs officer; judge, European sales manager, managing director; security guard etc) which is partly defined by its good faith, or trust, or impartiality requirements. That has the following consequence.

The Secretary of State for Justice described it as "wholly improbable" that an individual could improperly perform their functions without knowledge or intention. He joined Professor Horder in stating that prosecutorial discretion and broad sentencing powers could be used to prevent injustice if such an "exceptional" situation should arise.[89]

45. The Attorney General agreed.[90] She also emphasised that this approach was an important part of changing the culture in which taking a bribe is seen as acceptable.[91] As Monty Raphael of Peters and Peters stated:

46. On balance we support the provisions in the draft Bill that enable a person to be convicted of being bribed (clause 2) without proof of knowledge or intention, notwithstanding that subjective fault should ordinarily be required by the criminal law. This policy forms an important part of changing the culture in which taking a bribe is viewed as acceptable. In particular, we think that it should encourage anyone who is expected to act in good faith, impartially or under a position of trust, to think twice before accepting an advantage for their personal gain.

Overlapping offences

47. The criminal law includes a wide range of offences that are likely to overlap with the proposed bribery offences under the draft Bill. These include:

The common law offences of misconduct in public office and conspiracy to defraud;
Dishonesty offences under the Theft and Fraud Acts;
Corruption at elections under the Political Parties, Elections and Referendums Act 2000 and the Representation of the People Act 1983, including its offence of bribery (s.113);
The sale of honours under the Honours (Prevention of Abuses) Act 1925.

48. The Law Commission decided to concentrate on developing new proposals for bribery rather than undertaking a broader rationalisation of the law. It stated that some degree of overlap with other offences was "unavoidable" and best resolved by prosecutors deciding on the appropriate charge before commencing criminal proceedings.[93] Several witnesses agreed with this approach, dwelling in particular on the benefit of retaining some narrowly focused offences and on the danger that any more ambitious project for reform would result in delay.[94]

49. The Public Administration Select Committee urged us, however, to consider whether the Honours (Prevention of Abuses) 1925 represented a particularly ripe candidate for consolidation.[95] This was in light of the Law Commission's assessment that the draft Bill's offences were "sufficiently broad" to catch the 1925 Act's offences.[96] Professor Horder accepted that there might be potential to repeal the 1925 Act but only, if at all, once some time had passed "to see if, indeed, other legislation is now necessary". He stated that the Act could be reviewed in due course by the Law Commission's Statute Law Repeals Division.[97]

50. Once the operation of a Bribery Act has become established, the Government should ask the Law Commission to review the Honours (Prevention of Abuses) Act 1925 to determine whether it remains necessary in light of the new offences.

42 Law Commission, Reforming Bribery, No 313, November 2008, paras 3.78 to 3.225 Back

43 BB06, para 06 Back

44 Law Commission, Reforming Bribery, No 313, November 2008, para 3.227 Back

45 Q369 (Keir Starmer QC); Q369 (Richard Alderman); Q369 (Detective Chief Superintendent Steve Head) Back

46 BB20 Back

47 BB56, para 1.14; Back

48 BB03, paras 34 to 36; BB7, para 9 Back

49 Q10 Back

50 Law Commission, Reforming Bribery, No 313, November 2008, paras 3.88 to 3.98 Back

51 Q327 Back

52 BB06, para 2; Back

53 BB39, para 1.4 Back