Examination of Witnesses (Questions 338
- 339)
WEDNESDAY 3 JUNE 2009
MR JEREMY
COLE, MS
LOUISE DELAHUNTY
AND MR
MONTY RAPHAEL
Q338 Chairman: Thank you very much
for coming. What is your general reaction to the Bill? Is it good
enough? Is it better than the last one? Can you live with it?
Were there mistakes? How can they be remedied?
Mr Raphael: Thank you for inviting
me. I am a solicitor in private practice and have been for almost
five decades. I am associated with a number of organisations that
have campaigned for a reform of the bribery laws, but the opinions
I am about to express to you and your noble colleagues are my
own and do not represent any particular organisation. I hope they
simply represent common sense. It is a matter for you and your
colleagues to judge. My personal reaction to the draft Bill is
that I welcome the initiative that has produced a draft Bill so
that we are nearer having some legislation. I share the view of
the majority of the legal profession in finding it rather sad
that it is 103 years since Parliament last reformed the law. As
a lawyer, I am very conscious of the criticism that has been levelled
at this country for its failure to reform the law and its alleged
adherence to our treaty obligations under the OECD Convention.
All my other remarks must be seen in the context of my general
welcome to the prospect of legislation and I earnestly pray that
after your deliberations and your Committee report that legislation
will be introduced into Parliament and that it will pass into
law in this Parliament and will not have to wait to be introduced
or reintroduced in the next Parliament. So far as the Bill itself
is concerned, I echo some criticisms that have already been made
by witnesses before you as to presentation. It seems to me the
Bill is unnecessarily formulaic. I do not applaud the modern draftsman's
practice of giving initials to various players, Ps and Rs and
so on. I do not applaud the way the conduct is split into cases,
conditional functions and activities. If that is thought to be
cavilling, I would rather have these grammatical and presentational
imperfections than no legislation at all. Very briefly, when we
come on to it, I would like to be given the opportunity of addressing
you about the corporate offence and the offence of foreign bribery.
If you will forgive me, perhaps I can just impose upon you for
one more minute by way of general remarks. I think the Bill has
to be seen in the context of our general crime control policy
in the way things are arranged in this country. As was obvious
from your previous session, there is going to be under the structure
of this Bill a great deal of reliance on prosecutorial discretion,
so it is a question really for you and your colleagues to consider
whether that is the correct way forward. I personally favour the
exercise of prosecutorial discretion over the insertion into this
Bill of more prescriptive obligations. I think it is difficult
to prescribe conduct in this way. I think this has already been
addressed to you by Professor Horder, who is the chairman and
architect of the Commission's legislation. We are quite familiar
in this country with allowing community justice in the form of
jury trials to determine the conduct standards, the ethical standard
that we require of our citizens. We do it all the time as lawyers
and there are many lawyers sitting in front of me, rather frighteningly
when I am addressing a number of very senior lawyers. The test
of dishonesty which informs jury decisions every day in our courts
is based on an assessment of what is acceptable in our society,
given the peer group of the suspect or the offender, and I see
no problem at all in importing that concept into this legislation
at least so far as offences in clauses 1 to 4 are concerned. I
am troubled, as are so many other people, by the concept of criminal
negligence in clause 5. The issue of hospitality I think is best
left to discretion and to the good common sense of a jury, as
are facilitation payments. I do not regard the failure to have
a level playing field with our American competitors on the FCPA
as disqualifying that. I want to say one thing about debarment,
which I know is very troubling to the commercial community. Thank
you very much for allowing me to make these preliminary remarks.
Q339 Chairman: You can send us a
detailed brief afterwards.
Ms Delahunty: Again, some preliminary
remarks from me. Like Monty, I am a criminal lawyer, a business
crime lawyer, but I work for a City law firm which has offices
around the world, so I advise many corporates in many industries
and welcome this Bill as a way of bringing some certainty and
improving our reputation around the world. I am concerned though,
looking at the Bill as a criminal lawyer and looking at how it
may be prosecuted, about some of the terminology. I tried to envisage
the trial. I hear what Monty says about how juries have to decide
matters of dishonesty, and indeed we have witnessed that happening
in many cases, but where a jury is being asked to look at good
faith, impartiality, trust and all those other issues one has
to remember that there will be a whole range of industries involved.
I know from my practice that these industries are very specialised
in their nature, whether you look at the energy industry, the
oil industry, the pharmaceutical industry. It troubles me about
how this will be prosecuted and whether the prosecution will have
to educate the jury on what is to be expected of this particular,
reasonable man, how complex that is going to be and how long that
is going to take at a time when we are being encouraged to make
sure that fraud trials are short and not so expensive to the state.
That is of concern to me. The other concern I have, having read
Professor Horder's evidence, is that the answer seems to be when
an issue is raised, "Well, we will have some guidance. There
will be some guidance on what these terms mean. There will be
some guidance on adequate procedures for the corporate offence."
The concern here is you have companies which will be dealing with
these issues around the world. At the moment you have a plethora
of guidance from a number of trade bodies internationally. You
have different levels of guidance, depending on which country
you are in. To give some certainty to the companies that are going
to have to train their staff is a major issue here. There is a
query in my mind about if you have a clear law really how much
guidance should you need, but if you do need guidance how are
you going to help the business to deal with that guidance, I think
with the assistance of government. One example which I can speak
more about if that is helpful or put in writing as we are late
in the day is to look at the anti-money laundering law model that
we have in this country and the fact that to enable the much wider
constituents who are now regulated within the money laundering
law to deal with their duties, professional bodies for each constituent
part for banks, for lawyers, for accountants, for trust company
service providers and now for fine art dealers and a whole range
of very popular people, including estate agents—who may
even be said to be more unpopular than lawyers—draw up their
own guidance, submit this to the Treasury, the Treasury blesses
the guidance and then this is used in prosecutions. I do not know
if that might work here but at least it gives those in those sectors
something to look at and work on. Here I am a bit concerned about
all this discussion of guidance and how our clients are going
to get some certainty about how they should deal with this on
the risk management side.
Mr Cole: Good afternoon. Just
by way of background, I am, like Louise, a City lawyer advising
corporate clients on aspects of bribery and corruption. That is
really my perspective on this. The question I asked myself was
broadly will the Bribery Bill be effective. I think quite clearly
the answer to that is yes, but I went on to ask two specific questions.
One was: will corporates put in a stronger compliance regime as
a result of this Bill. Again, my response to that is yes. You
have heard from earlier witnesses this afternoon that they already
have strong procedures in place, sophisticated procedures. I think
even those corporations will review their procedures as a result
of this Bill, which must be a good thing. There are many out there
that do not have procedures. As a result of this Bill, my sense
is that they will look and inspect for themselves as to what they
are doing and put in procedures, which again is a good thing.
The second question I asked, which is coming at this in a slightly
different way, was will corporates self-report when they have
problems. My answer to that is probably no. Our system is focused
on prosecutions. As an aside, I was concerned that the Ministry
of Justice has already estimated that this new corporate offence
will result in additional prosecution an average of 1.3 per year,
which does not sound particularly threatening. Does the Committee
want to encourage a culture of self-reporting, as is very familiar
in the US? What are the advantages? It identifies positively which
corporates have issues and ensures that they clean up their act.
It enables prosecution authority resources to be spread far wider.
It assists in identifying the hotspots in particular industries
where there are problems of bribery. It clearly raises awareness
and publicity based on what we have seen in the US. Corporates
will not self-report unless there is a real opportunity to avoid
criminal prosecution. Many of these industries will be concerned,
as I am sure you have already heard, about mandatory debarment
in relation to defence procurement, so procurement contracts in
the defence industry and the construction industry. Some of these
businesses survive on procurement work. If they get a criminal
conviction, their business could collapse overnight. If they are
going to self-report, they have to know what the path is ahead
of them. They have to have a pretty clear understanding of what
that involves. In the US there is a well travelled track in terms
of deferred prosecution agreements with civil fines. In the UK
we do have a US-style approach adopted in the situation of cartels.
Both the European Commission and domestically the OFT do have
a guidance and leniency programme. The comparison is not quite
direct because in that situation the corporate is fined. There
are not criminal penalties. There are enough analogies there to
say maybe there is an environment here where we could encourage
corporates to self-report on the basis that they know or have
at least a better sense of what they are letting themselves in
for. Thank you.
|
