Examination of Witnesses (Questions 1
- 19)
THURSDAY 14 MAY 2009
PROFESSOR JEREMY
HORDER
Q1 Chairman: A very warm welcome
to you, Professor Horder, and thank you for coming.
Professor Horder: It is an honour
to be invited, thank you.
Q2 Chairman: We have a list of questions.
I do not know whether you have seen it; I hope you have.
Professor Horder: I think I have
what you are speaking about, yes. There is not a list of questions,
as such, on my one, but there is a list of issues to be addressed.
Q3 Chairman: Is there anything you
would like to say by way of introduction? I know you have sent
us round a paper on this.
Professor Horder: No, I think
we can start straightaway, if that is your wish.
Q4 Chairman: What about the new Bill
based on bribery rather than anything else?
Professor Horder: Well, I can
say certainly a bit about that by way of background. When we were
asked by Baroness Scotland, when she was at the Home Office, to
undertake this project, because of the pressure of time, it had
to be cut down to a manageable size, so we agreed that we would
concentrate on bribery rather than broader aspects of corruption,
although I know that it may very well be that the law needs updating
in that area too, but we had to provide a manageable focus and
that is why we ended up looking at bribery, in particular. That
explains that in a way, so I hope that Members will not find that
the focus has been too narrow. In the time available, I think,
trying to consult properly with those who had legitimate views
on the subject, reporting and then producing a draft Bill which
was then clearly taken over by the Ministry of Justice and turned
into what is before you now, that was quite a large task in itself,
without going into the broader aspects of corruption. However,
as you will have noted, the current Bill, probably partly for
that reason, closely reflects, I think, the Law Commission's own
recommendations in its own Bill.
Q5 Chairman: Yes, but there are some
changes, are there not?
Professor Horder: There are some
changes and I have tried to address those to a degree, because
I thought that would be helpful to you, in my paper that I circulated,
yes.
Chairman: Well, I found that paper very
helpful and I hope everybody else did too.
Q6 Martin Linton: Professor Horder,
I see that you have been in the Law Commission since 2005.
Professor Horder: Yes.
Q7 Martin Linton: I do not know whether
you will know the answer to this question, but I would certainly
appreciate a better understanding of what went wrong with the
original Corruption Bill because it seems from the briefings that
we have had that, even just on the narrow issue of bribery, it
left out some pretty basic things that we would consider bribery,
such as from one head of a business to another. Was there any
particular reason why the original Law Commission Report and Corruption
Bill went awry?
Professor Horder: Well, I think
that it was quite a cautious and conservative Bill. It focused,
certainly in the private sector, on a very narrow range of cases,
broadly speaking, following the existing law which confines private
sector bribery to the betrayal of a principal by the agent, so
an employee or someone who takes money to make a contract on behalf
of their principal, something of that kind. Now, in our consultation
we may have picked up on this. We also took a slightly cautious
line in that regard in that we consulted on whether private sector
bribery should be confined to cases where there had been a breach
of trust, in the legal sense of that term, so slightly broader
than principal and agent, but still a legal concept to try to
provide some degree of certainty by keeping the offence quite
narrow and relying on that legal concept, but, ironically, we
were criticised in their response by the judges themselves on
that issue. They said, "We do not think it is appropriate
to have legal, already-existing civil law concepts being used
to restrict the ambit of the criminal law. We think that's wrong.
We would find this very, very difficult to implement in practice
and, basically, you've got to go back and think again". When
criticisms of that sort come from the senior judiciary, the circuit
judges, you do sit up and take notice and we did, therefore, go
back, not literally to the drawing board, but what we did instead,
as you will have seen from the Bill, is to rely, and indeed this
is what the judges suggested, on the same sort of terminology
of "trust", "impartiality" and so on, but
leaving those terms to be, in the end, decided by the jury once
the judge has satisfied him or herself that there is sufficient
evidence that a breach has taken place; that is the check, if
you like. As we pointed out in our Report, that is actually the
way in which the criminal law approaches other civil law concepts,
like duty of care, things of that kind. It leaves it to the jury
to determine, it does not force them to follow the civil law rule,
and we were persuaded that that was the right approach, and that
has not, in itself, proved controversial since then.
Q8 Baroness Whitaker: Would it be
fair to say, Professor Horder, that the original Bill did not
focus very much on bribing foreign public officials and that the
present Bill takes much more account of what is, arguably, a larger
field of bribery?
Professor Horder: In all fairness
to the Commission in its previous incarnation, the territorial
application of the criminal law was not at that stage something
which was being considered as a high priority. There had at that
time already been an attempt to broaden the territorial application
of criminal law more generally, so I think it just really was
not very high or very centrally focused on the radar, so it would
not be fair, I think, to criticise them for that, but the world
has moved on, so, as you will see, we have looked at the thing
in a new light.
Q9 Chairman: We have still got "good
faith", "impartiality" and "breach of trust"
in clause 3, but those are, as it were, not technical, civil law
legal terms.
Professor Horder: That is right.
Q10 Chairman: We leave it to the
jury to decide whether people are in a position of trust?
Professor Horder: That is the
preferred view of the judges, and we were convinced that that
is the right approach. There is the check that you have got to
pass the judge, as it were, if you are going to be a prosecutor
making a case. What will have to happen is that the judge will
have to decide that there is sufficient evidence for the jury
to come to a reasonable conclusion that there was a breach of
trust or of the duty of impartiality and so on, but certainly
it is a matter for the jury. Now, I can see that some people might
be nervous about that in terms of an element of uncertainty that
it introduces. I accept that, and I have already said that that
is tolerated in other areas of the law, for example, gross negligence
manslaughter where the duty of care you owe to the victim, or
the question of whether you do, is just left at large for the
jury and it is not tied to the civil law. However, I think there
is a broader point, which is that you have to take account of
where we are coming from, if I can put it in that way, in that
we started with a law governed by a very vague term, the notion
of "corruptly", and the courts themselves could not
agree what that meant in law. There are decisions saying it involves
dishonesty, there are other decisions saying it does not involve
dishonesty, and, even if that dispute could be resolved, it is
a very vague term because it incorporates not only an idea of
what somebody does, the exchange of favour for something, but
also their state of mind, what their attitude was towards that
transaction; it alludes to an idea of wrongdoing, but without
actually saying very much about what it was. Now, that approach
we bequeathed to, for example, Canada and Australia in their criminal
codes, so you find it there; but it is very interesting, I think,
that mainland European jurisdictions, France, Germany, Italy,
they do not use that concept or anything like it. They rely on
concepts of breach of a duty not to accept or a willingness to
be influenced, or something of that nature, and they use language,
I think, which is closer to the kind of language that we used
in our Bill and the Government has already adopted, so yes, it
is true that the Bill does not point you to a particular piece
or a series of pieces of conduct and say, "Well, that's bribery
and other things are not", but it uses general terminology
which means an element of vagueness, but I genuinely believe it
is a modest improvement on what is there now. I also think that,
if you tried to go further and tried to list what would count
as bribery and what would not, there is too much scope then for
exploitation of the rules, and we know perfectly well that there
are lots of very highly educated and learned lawyers out there
just waiting for us to come up with a very stipulative definition
so that they can find a way round it, but that is true of stipulative
definitions generally, they leave gaps, that is what they do,
otherwise they would not be stipulative, so I think we have tried
to strike a balance. Sorry if I seem a bit defensive, but I think
this is an absolutely crucial point and I hope that we have struck
the balance in the right way, and I genuinely think it would be
difficult to try to find some more definite way of pinning down
what counts as bribery and what does not.
Q11 Lord Thomas of Gresford: So what
is expected of a person in a particular position is to be determined
really by the jury, having heard the evidence, and whether they
find that he has not performed the activity in question in good
faith or impartially or has been in breach of a trust is entirely
a matter of fact for them to determine?
Professor Horder: Well, literally
speaking, you are correct, yes, but there will be no doubt in
the sorts of cases that are going to be taken forward, the ones
with the strongest evidence, an element of legal background to
that in the sense that the likelihood is that most cases that
come forward with a realistic prospect of conviction will actually
be the cases that would be pretty close to those that are an offence
under the existing law, so an employee pocketing money in order
to place a contract or someone running a trust who is benefiting
personally in terms of the investments they are making on behalf
of the trust, I do not see this as instituting a kind of revolutionary
change in who ends up being prosecuted for bribery.
Q12 Lord Thomas of Gresford: No,
the prosecutor will have some assumptions as to what a reasonable
person will expect.
Professor Horder: Yes.
Q13 Lord Thomas of Gresford: Then
he may or may not be upheld by a jury representing the public
generally.
Professor Horder: That is right,
and that, I think, is pretty much in line with how things work
across a good deal of the criminal law. It is always possible
to pick out an offence, I do not know, say, theft or fraud, and
say, "Dishonesty—what does that mean? It could mean
anything", and, in a literal sense, that is true, but, in
reality, the cases that get prosecuted, and you would know more
than I would, the ones that actually raise a question about what
dishonesty is are very few and far between.
Q14 Jeremy Wright: Except, Professor
Horder, in the context of this particular draft Bill, we introduced
the international dimension, the bribery of a foreign official,
and, in that context, can I ask you about the definition that
you expect to be applied of "what a reasonable person would
expect" because is the reasonable person the reasonable person
sitting in the jury room in London, Birmingham or Manchester,
or is the reasonable person someone who is located in the country
where the particular act of alleged bribery may have taken place?
Is it what is reasonable to the juror, or is it what is reasonable
to somebody in the context of the event which is alleged to be
bribery?
Professor Horder: Well, that is
an extremely good point and we did think long and hard about that,
but you will have noticed with the offence of bribing a foreign
public official that we do not use the language of "what
might be expected" precisely because there is a risk that
we would fail to meet our OECD obligations actually because it
would allow experienced and effective counsel to say, "Well,
members of the jury, what can you expect in country X? It is only
reasonable to expect that they will provide bribes and so on",
so we wanted to tie that down much more specifically by talking
about what was "legitimately due" so we avoid that language.
However, we believe that for general offences it is more legitimate,
indeed required actually, if you are going to get decent coverage
of the law. In relation to the offences that apply primarily domestically,
it is legitimate and reasonable to use this language of expectation
and so on because, if you are not going to trust a jury to know
what is reasonably expected of public servants, companies doing
business, well, who are you going to trust?
Q15 Jeremy Wright: I understand that,
but obviously, even within clause 3(2), it makes it clear that,
in other words, the definitions which are being used, "It
applies even if the function or activity (a) has no connection
with the UK, and (b) is carried out in a country or territory
outside the UK", so, although I understand the point you
are making about the bribery of public officials, if this is a
private transaction, if you like, then we would presumably still
be applying the definitions in clause 3.
Professor Horder: Well, it is
certainly true that the general offences clearly apply to commercial
activity, as indeed the existing law does now, and they will also
apply if and insofar as the general offences applied overseas,
that is also absolutely true, yes, that is right. What we are
saying, effectively, is that, if you accept a bribe from a company
to place a contract with that company rather than doing it in
whatever way is dictated by the market circumstances and so on,
well, that is just as wrong whether it takes place here or wherever
it may be; it is a question of whether it would be an offence
here. I accept that, but we are in the business of trying to enforce
high standards, common standards, so that you know exactly what
is expected of you wherever you are. It is not an edifying thought
that a businessperson would look up on the Internet to try and
find out whether this country they are about to deal with, what
their sort of bribe levels are or something so that they are equipped;
that is not a very attractive prospect. Perhaps I could also add,
as we do in the paper, that the ability to apply the general offence
overseas will also be important in some contexts to catch conduct
not covered by the foreign public official offence. I think the
example we give is that you are not a foreign public official
if you are standing for office as a foreign public official, but
we heard during consultation that it is not unheard-of for a company
to make a payment to every single person standing for an election
to public office because, very often, there will be a limited
number of candidates, qualified persons, who can take the post
and, therefore, it is actually possible to get them all in your
pocket. Now, if that is not covered by the foreign public official
offence, it ought to be covered somewhere and the general offence
would apply there, but primarily of course what we are looking
at is the bribery of a public official for the overseas offence,
and I would not want to overplay that particular aspect.
Q16 Dr Turner: Clearly, "good
faith" and "impartiality" are words which have
different meanings to different people in different cultural contexts,
and it could be said, speaking as a non-lawyer looking at this
Bill, that the Bill has been carefully drafted to allow to continue
present business practices, particularly in the defence industry
obviously, whereby foreign officials expect a large commission,
which, in our eyes, would be seen as a bribe, otherwise a deal
does not happen and, unfortunately, billions of pounds and thousands
of jobs are at stake. The Bill specifically allows, on the face
of the Bill, practices to be carried out in foreign transactions
which would be regarded as totally corrupt in the UK. This, I
take it, is deliberate and how do you feel about it?
Professor Horder: No, there may
be an element of misunderstanding here because I think, or at
least I hope, that the way in which the foreign public official
offence has been drafted is to exclude any consideration of, or
reliance on, what is usual, culturally accepted, politically the
norm, whatever it may be, and that was the whole point about my
remark that you should not be able to search the Internet and
find which is the most bribe-friendly country or whatever it may
be. No, you are only entitled to pay a sum of money in exchange
for a contract or something if that is actually legitimate, i.e.
permitted by law, in the country in question, and that, we anticipate,
will very rarely, if ever, be the case, although there can be
some instances. For example, it may be permissible by law in some
countries to make charitable donations when you are investing
in a major way, when you are given a contract, something of that
kind, but this is a very, very narrow exception. I hesitate to
correct you, but I think in relation to the foreign public official
offence that you would only be able to, if you like, get away
with it if you could actually point to a law in that country that
permits you to make the payment you made. Now, at the risk of
slightly blunting the point I have just made, it is certainly
true that in some countries so deficient is the rule of law that
you might struggle to find a law governing this area at all, there
just is not any law there, but we did think about those situations
and, to be honest, it is very hard, sitting here in England and
Wales, to draft a law that is meant to have an operation in a
country that does not respect the rule of law really hardly at
all. That is quite a hard thing to do, I think, so there will
be some elements of gap in some situations, particularly when
you are dealing with countries where there is really no effective
rule of law, but I see that situation as pretty exceptional and
I do not believe that any other member countries in the OECD will
tackle this any more vigorously or with a more imaginative and
forceful approach than we will; I do not see that.
Dr Turner: In practice, in the sorts
of countries that we are dealing with, or even in our own country
to a certain extent, the legal profession will say, "Well,
if the law doesn't say you can't do something, it must be legal".
Again, I am a non-lawyer, so I am speaking in total ignorance,
but I would find it very surprising if the countries we are talking
about had statutes which specifically said, "It is expected
that a public official will receive an inflated commission in
order to seal a deal". What it will do is not say that he
cannot, and custom and practice will dictate that he is able to.
Q17 Lord Thomas of Gresford: Following
that, in an actual case, would you not call evidence of foreign
law to the effect that there is nothing in that foreign jurisdiction
which prevents it rather than calling evidence that it is permitted?
Professor Horder: Well, I think
the language of the Bill is to say that the payment must be "legitimately
due" under the law of the land.
Q18 Lord Thomas of Gresford: And
that is defined as being permitted or allowed, but, as Dr Turner
said, you call evidence to the effect not that it is permitted,
but that it is not prevented, do you not?
Professor Horder: Well, that is
not the same thing at all, in my book. My understanding of that
clause is that "legitimately due" means exactly what
it says and does not include informal permissions or something
of that kind, so it is meant to be quite a strict approach in
that way, so you would not be able to say, "Oh well, the
law doesn't deal with this issue. Therefore ... " That is
not my understanding of the way it is meant to work.
Q19 Mr George: Sorry to go back a
few steps, but I am troubled by the fact that there was a foul-up
somewhere in 2003. We have heard some estimations and then lessons
have to be learned, so what expectation do you have? Have you
consulted sufficiently widely? I do not suppose you consulted
anybody on the Committee because we did not even know we were
going to be on it until quite recently. To lose one Bill is unfortunate,
et cetera, et cetera, et cetera, so what
realistic expectation do you have that this Committee will make
recommendations largely consistent with what you have said? The
other point is that you speak, I would not say "reverentially"
in relation to the OECD, but you obviously admire them. Well,
if that were the case, in so many instances in the excellent Law
Commission Report, Reforming Bribery, it was actually critical
of the contents of what the OECD has actually written and what
it is planning to do, so where do we stand on this? Are we obliged
to follow what they say or do we have any room for manoeuvre to
say, "No, frankly, we don't wish to do that because we have
warned you in advance that we dispute some of the things that
you recommend"?
Professor Horder: Well, that is
an extremely good question. To deal with the first one, if I may,
quite quickly, the Law Commission is in a position whereby we
can take the horse to water, but we cannot make it drink, so we
made recommendations and the Government drafts a Bill, but after
that it is purely a matter for the parliamentary process. We are
not in the business of taking it further than that, so it is your
responsibility really. Obviously, we are disappointed if our proposals
do not in the end make it into law, even in part, but it is not
our role to make that happen; our role is an advisory one, although
we have the added element that we draft bills. Now, in relation
to the second one, I think that is an extremely good question.
I do not think our attitude towards the OECD is actually reverential
at all. However, what we accept is, of course, that we must abide
by our international obligations; we have signed up to the Convention
and that means we are bound. However, what that means is that
we are bound to ensure that business standards in dealing with
public officials are sufficiently high that they will involve
a level playing field, fair competition, between companies from
Britain and companies elsewhere. The OECD recognises in all of
its members, and there are many, many members, that they are all
going to have different ways of doing this, different legal traditions,
different legal systems, and what the OECD says is, "Look,
we're not coming along and telling you how to run your legal system,
we don't have the expertise to do that, but what we are interested
in, however, is outcomes. Will your legal system, taken with whatever
quirks and permutations it has that are distinctive, the common
law tradition, juries and so on, produce, or contribute to, that
level playing field so that British business will not be, as it
were, getting away with it when their counterparts in Germany
and elsewhere can't?" They take a sensible line, I think,
that it is outcomes that matter and they leave, as it were, the
processes to us, although of course they do advise on that and
they say, "Why can't you do it this way, that way, the other
way?" but, in that sense, they are being advisory. You are
completely free to draft an entirely new scheme, if that is what
you want, as long as it meets the level playing field requirement.
Was that it?
Mr George: Yes, more or less.
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