Additional memorandum submitted by Professor
Jeremy Horder (BB 37)
BRIBERY BILL:
QUERIES ON
CLAUSES 4 & 5 FROM
THE ICC AND
CLIFFORD CHANCE.
1. Should the term "corruptly" be
added to the clause 4 offence?
The short answer to this is "no".
To begin with, the term "corrupt"
is vague and the subject of conflicting judicial authorities on
its meaning (Law Com Report, 2.33).
One of the main themes of the Bill, and central
to the Law Commission Report, is the claim that the term "corrupt"
is far too susceptible to use as a cover for laxity in a particular
"national-cultural" context. If a jury can decide that
it is not "corrupt" to do in country X what is the normal
expectation in X, then we will not be addressing supply-side corruption
issues in the way we are required by the OECD to do. We will not
be tackling the unhealthy willingness of some companies to trade
bribes for influence/contracts if they find an environment in
a country where this is tolerated. This is as bad, politically
and socially, for those countries as it is for the reputation
of British businesses.
Perhaps as important is the point that, in fact,
clause 4 does employ key elements of the notion of
"corrupt" conduct in the way that it constructs the
fault element. The definition requires P to be shown to have "intended
to influence" F, in F's public official capacity, and "intended
to obtain/retain a business advantage" in so doing, by the
"promise of a financial or other advantage". In effect,
requiring proof of this is requiring proof of corruption,
barring special cases (see next para). It is just that the way
in which the language is employed means that there is no scope
for making the test sensitive to what is regarded as normal in
country X.
So far as the US Foreign Corrupt Practices Act
is concerned, I would direct your attention to what the Serious
Fraud Office said about this (in the context of considering the
"not legitimately due" test). The passage is cited at
para 5.95 of the Law Com Report:
[I]f "not legitimately due" is removed
where does the impropriety lie? It lies in the undue influence
intention and not in any act. However, the FCPA does not demand
that the value offered is "undue". It [the FCPA] also
rolls up just about everything in the intention lying behind the
influence: with intent to corruptly influence…or induce a
violation of duty…or secure an improper advantage. However
it also includes intent, "to induce an act", in essence
for a business reason. [This] is much more wide-ranging and
unlikely to pass muster here (my emphasis).
What this shows you is that if one accepts the
"not legitimately due" criterion, the Bill is in fact
a clearer and more focused version of what is in the FCPA: that
is what the OECD "model" offence is meant to be like,
and the Bill has followed that model. As you know, the Commission
also favours the "reasonable belief that a payment is legitimately
due" defence. Including that defence would have added yet
further to the sense that there is a substantial and effective
fault element in this offence, without the need to rely on the
term, "corruptly".
When Clifford Chance/ICC complain about innocent
conduct being caught, they may have in mind small commission payments.
We have already talked about those, and I will not repeat the
argument. Obviously, the Committee may feel that, as in the FCPA,
such a specific exemption should be included. That would please
business interests, and be acceptable to the OECD. The Commission
did not support it because it is in effect the introduction of
a "de minimis" principle. Such a principle is not known
to English criminal law, which deals with such cases through the
exercise of prosecutorial common sense restraint. The OECD's fundamental
requirement is that signatories make bribery of foreign official
offences consistent with the signatory's own criminal law traditions
and principles, ie without special exemptions or favours (Article
2). So, it would be somewhat ironic—possibly a breach of
the convention—if a de minimis principle were introduced
at this stage, for the clause 4 offence, when it is not proposed
to have it for the offence in clause 1.
Should clause 5 involve a civil penalty only?
It must be kept in mind that companies can only
be fined for the clause 5 offence, in any event (see clause
11(3)). So, we may to some extent be splitting hairs here.
The Law Commission's review of corporate liability
will not include specific consideration of bribery.
What the Law Commission's review of corporate
liability has to date found is that regimes of civil liability/civil
penalties usually need to be backed up with a "last resort"
criminal offence. This is how a good deal of modern regulatory
legislation works, such as that dealing with the employment of
illegal immigrants. At present, we do not have an across-the-board
civil liability regime for bribery, although it can be addressed
in that way in the financial services sector by the FSA.
Even if a regime of civil penalties—which
would be much more expensive, intrusive and productive of bureaucracy
than a criminal offence—was introduced across the board,
it would almost certainly need a "top end" criminal
offence to back it up. So far as financial services are concerned,
these can be found in the Enterprise Act 2002, and to some extent
in the Fraud Act 2006. So, even if a comprehensive civil penalty
scheme, with "bribery regulators" and all, was introduced,
the normal expectation would be that a criminal offence would
be there in the background for the worst cases/worst offenders.
The Government estimates the criminal courts
being faced with a "small number" of additional prosecutions
under clause 5 (White paper, para 94), possibly as few as
1 or 2 annually. This shows that this offence is meant
to influence behaviour by sending a message, setting standards
and raising expectations, rather than through the brute force
of deterrent prosecution and punishment imposed on a large number
of offenders.
June 2009
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