Examination of Witnesses (Questions 380
- 399)
WEDNESDAY 10 JUNE 2009
MR KEIR
STARMER, MR
RICHARD ALDERMAN
AND DETECTIVE
CHIEF SUPERINTENDENT
STEVE HEAD
Q380 Lord Anderson of Swansea: By
the prosecuting authority?
Detective Chief Superintendent Head:
By ourselves, the investigating authority, yes, and by the prosecuting
authority. I would anticipate that along the way the defendant
or the person under investigation would have the opportunity to
put exactly those arguments. I do not doubt that there will be
some early difficulties in the sense of the interpretation of
this, but I do not personally believe that this would be something
that is not going to be workable in terms of taking this before
people and asking them to say, with all of the information in
front of you, is this reasonable.
Q381 Lord Anderson of Swansea: That
does give an enormous discretion to the prosecuting authority,
does it not?
Mr Starmer: I am not sure. Under
clause three the defence would be trying to show there was no
reasonable expectation or a reasonable person would not expect
good faith, impartiality and a person would not reasonably expect—
Q382 Lord Anderson of Swansea: A
person being the English juror.
Mr Starmer: It is still quite
difficult. If this is conduct in an environment where someone
is seriously arguing, "I passed this advantage in circumstances
where nobody would reasonably expect good faith" or, "Nobody
would reasonably expect the official to act impartially",
that is a tricky defence to set up under clause three and that
is the intention behind clause three. If you pass from that clause
to clause four, there is the question whether it is legitimately
due under the law. If the law in the particular country provides
for an advantage to be passed in certain circumstances, the offence
simply is not made out.
Q383 Lord Anderson of Swansea: If
the practice in a country is such, are you saying that there is
no relevance for the context?
Mr Starmer: My understanding is
that the drafters were intending to knock out a defence which
is essentially that there is no expectation of good faith in this
country and therefore you cannot do anything about it. If that
is harsh on those in the locality, I think it is intended to be
so.
Q384 Lord Lyell of Markyate: How
many cases over the last five years have the CPS and the SFO prosecuted
for bribery or corruption?
Mr Starmer: Can I give a cautious
answer to that? We have tried to retrieve this information. We
have come up for the CPS with about five to seven cases. This
comes with a health warning because we do not input the information
on our system with a view to putting it out for committees such
as this. We input it for the purposes of charging. A number of
cases of bribery would be charged under different heads—misconduct
in public office etc.,—so pulling it back out to give an
accurate picture is fraught with difficulties. The best I can
do is to say it is definitely more than five or seven. It is a
small-ish number of that order and these are only cases that are
charged. I am not able to give you the number of cases where we
have considered something for prosecution and not proceeded, I
am afraid, but you get a sense of the sort of numbers, I hope.
Mr Alderman: In terms of the Serious
Fraud Office, we have had one prosecution for overseas corruption
that led to a conviction last year, an English lawyer who tried
to bribe the American authorities to unblock some accounts. He
was sentenced to six months in prison. That is the only conviction
that the SFO has obtained during the course of the last few years.
We have 17 ongoing investigations at the moment and we are expecting
to make some more announcements during the course of this year
about progress in ongoing cases.
Q385 Lord Lyell of Markyate: Mostly
my recollection from 1987 to 1997 is that most of the cases were
big, in so far as they were brought. You were mentioning big and
small. There may have been one or two small. I imagine you could
get some sustained acceptance in giving of bribes for small favours
which might lead to a prosecution, but it is pretty rare. Mostly,
this is a big, serious offence. I remember approving a planning,
one where some thousands of pounds had changed hands to get planning
permission. That is the kind of thing we are faced with in this
country, amongst others. The Law Commission talks about a drink
may be okay but a round of golf may not. I thought that was a
bit unrealistic.
Mr Alderman: When we look at the
amounts involved in dealing with cases and considering whether
to take them on, whether to prosecute, we look not just at the
amount of the bribe but the amount of the benefit that has been
paid by the alleged bribe, which could be the value of the contract.
In terms of the asset forfeiture legislation, which we would want
to be able to apply following a conviction, we would be interested
in the value of the contract. That could be very much more than
the amount of the bribe, so I entirely agree. We are looking potentially
at very large sums.
Q386 Lord Lyell of Markyate: You
would be unlikely to be going for it on the basis of a drink or
a round of golf. Usually, the bribes are at least what ordinary
people would think of as pretty substantial.
Mr Alderman: Yes.
Q387 Baroness Whitaker: To revert
to the relativity of conduct in different countries, although
there are of course huge differences in how people go about things,
surely almost all jurisdictions have laws against bribery, so
even if you think the law does not matter very much, or is not
going to catch you or people only pay lip service to it, most
people know that bribery is wrong. That is what a jury should
surely bear in mind?
Mr Starmer: I think that is undoubtedly
right. The countries do have those laws and there is an international
law that has developed as to what acceptable behaviour is. That
is why I do not see any difficulty in operating these clauses
from a prosecution point of view.
Mr Alderman: We would certainly
want to encourage those countries that have not signed up to the
international laws to do so.
Q388 Lord Williamson of Horton: Can
I ask whether our witnesses would see practical difficulties about
the operation of the brand new clause about the bribery of foreign
officials? To take an example, the American legislation refers
also to party political persons. In some countries there may be
no foreign officials but there may be party political officers
who nonetheless carry out such business. I just wondered whether
you foresee any practical difficulty about operating it.
Mr Alderman: There are indeed
practical difficulties in trying to apply clause four. They do
not relate to the clause itself, but they relate to the reality
of investigations. First of all, investigators and prosecutors
have to prove the trail of money. The money may not simply pass
from one person to another. It will pass through a succession
possibly of different bank accounts and different jurisdictions
and different legal entities. We would hope through mutual legal
assistance to be able to obtain assistance from those other jurisdictions
but that cannot always be guaranteed. Those involved in this area
may be seeking to choose locations that do not assist us. Another
area is, the more the ultimate beneficiary is involved at the
higher levels in the receiving state, the more difficult it could
become in practice for us to obtain mutual legal assistance from
the particular country, because we would need to show various
elements and we would need the assistance of that country in order
to be able to show it. These are issues not relating to the clause
itself, but how we go about the investigation. I think it is important
that a realistic view is taken of this. The clause will help us
in all sorts of ways but the task for investigators in being able
to establish what happened and bring people to justice is still
very difficult.
Q389 Lord Sheikh: We have referred
to prosecutions regarding anything committed overseas. Are there
any lessons we can learn where the prosecutions were not successful?
Is there something we can learn from what has happened in the
past?
Mr Alderman: There are lots of
lessons that we can learn and I think there is a lot that we can
learn from what has happened in the United States as well. There
is quite a contrast between the provisions in our law relating
to corruption and the provisions in the United States law and
also the tools available to investigators and prosecutors. That
is where the Bill makes quite a significant step forward, particularly
in relation to the clause dealing with corporate negligence. In
the United States—I am not sure it is fully appreciated
here—the law of corporate criminal liability is indeed very
different. A member of a corporate in the United States, even
at a comparatively low level, can bind the corporate and make
the corporate criminally liable if they act in such a way that
they believe will benefit the corporate. Our test is very different
because it involves us trying to find the controlling mind of
the corporate, a big global corporation, showing that the necessary
mens rea was at that level. That is why I think particularly
clause five strikes a very good balance here and certainly enables
us to learn from the American experience but to translate it into
something which we think will be workable here.
Q390 Lord Anderson of Swansea: There
is the difficulty of a member of a jury putting himself or herself
in the shoes of someone in a different context. I think you conceded
that possibly, if there was to be an other than objective test,
evidence would have to be called for the prosecution and the defence
as to what are the local conditions.
Mr Alderman: Even on the objective
test evidence will still need to be called about local conditions
and local law.
Q391 Lord Anderson of Swansea: It
sounds very complex. There would have to be a register of so-called
experts in the context and they would differ, one from the prosecution,
one from the defence. How is the ordinary juror to find their
way between competing interpretations of local practice?
Mr Starmer: This is where the
emerging international law is important. There is an international
law of accepted behaviour now and the jury would be entitled to
look at that.
Q392 Chairman: I wanted to ask about
the mens rea in relation to the payer and the recipient
because they are not the same. I wonder whether you have any comment
to make about that.
Mr Starmer: They are obviously
not the same. Clause one is reasonably straightforward and the
mens rea is spelt out. Clause two has a different situation
depending on whether you are in cases three through to six. Sub-clause
(7) in respect of cases four to six states that it does not matter
whether R knows or believes that the performance of the function
or activity is improper. As I understand it, the thinking behind
this is that, if you are the payer of the bribe, you have to have
a more specific mens rea. If you are the recipient, you
are expected to know what the rules about receiving financial
and other advantages are. Thus the mens rea is that much
narrower and you only have to have mens rea as to the act
itself.
Q393 Chairman: Can you see difficulties
in prosecuting a recipient?
Mr Starmer: No. Clause two makes
it rather easier to prosecute than it might otherwise be.
Q394 Lord Mayhew of Twysden: Mr Starmer,
in your very helpful note you say of clause four, bribery of foreign,
public officials, that the requirement that the prosecution must
prove that a payment to a foreign, public official is not "legitimately
due" places a heavy evidential burden on the prosecutor.
He will in effect have to lead evidence that the advantage is
not legitimately due or be able to rebut the defendant's assertion
that it is. We have touched on this already, but I wonder whether
you can tell us whether you are unhappy with the way that clause
four is drafted, the introduction of a discrete offence of bribery
of foreign, public officials, or whether you think that it may
contribute to what you say in paragraph 14 of your note: "I
believe that it is unlikely that there will be a significant increase
in the number of cases prosecuted by the CPS." What would
you say about requiring that evidence should be written evidence
if it is to be relied upon as being "legitimately due"
because the law applicable permits or requires acceptance?
Mr Starmer: Clause four does cause
one or two difficulties, one of which as you have identified is
that the prosecution would have to show that the financial or
other advantage is not "legitimately due". In order
to do that, the definition following on, you would have to show
that it was not legitimate under the law of the country or territory
in question. That would require some evidence of what the law
was to be led. In some jurisdictions that might be quite easy.
In other jurisdictions it might be more difficult. What would
be helpful would be for this clause to spell out in more express
terms what constitutes law for the purpose of this clause and
what does not, bearing in mind in particular the different jurisdictions
and the difference between the codified jurisdictions and the
common law jurisdictions. I do have an anxiety about that and
I think some further attention to that would be a good thing.
Certainly that would then have to be proven. That is the first
difficulty. The second issue in relation to clause four is the
reasonable belief defence which was there on the Law Commission
version and is not there now. There are, as I understand it, two
ways of dealing with this. You either have a reasonable belief
defence on the face of the statute in clause four or somewhere
else, or you leave it to the discretion of the prosecutor to look
at all the circumstances that have been investigated and take
a view on whether there ought to be a prosecution in the public
interest or not. Either of those is workable. I have some anxieties
about whether it is better that that is done by the prosecutor
exercising a discretion or not, because I think these days a prosecutor,
if exercising a discretion not to prosecute, ought to say in clear
terms why not and spell it out.
Q395 Chairman: You would like an
amendment, would you?
Mr Starmer: An amendment to clarify
the law and what constitutes and counts for law would be helpful
if this clause remains in this form, yes.
Q396 Chairman: That might not be
too difficult to draft.
Mr Starmer: No, I would not have
thought so.
Q397 Lord Lyell of Markyate: I quite
agree that this is a very difficult area. If one takes the highest
profile cases of recent times, the British Aerospace one and the
one that relates to the King and Prince Bandar, if I have the
name right, this would have focused pretty much on the question
of what was "legitimately due", as I understand it.
Of course in this country and in common law countries if something
is not prohibited then it is permitted. In an entirely different
jurisdiction, such as Saudi Arabia, it was the view of Lord Goldsmith
when Attorney General—I think he expressed this in the House—that
he was far from satisfied that it would be established that there
had been in fact a payment that was—he did not use the words
"legitimately due", but that is what in substance he
would have been referring to in the context of this drafting.
It seems to me that, in relation to some foreign jurisdictions
and the way that they conduct their affairs, there will be very
genuine questions of fact as to when particular methods of doing
business are legitimate and when they are corrupt.
Mr Starmer: I think that may be
the case although the number of countries that do have a law is
ever increasing, so it will be a diminishing problem. There are
problems in the way the law is articulated, whether it is a permissible
or a more codified approach. I think I ought to pass this to Mr
Alderman who has in particular the experience of Saudi Arabia.
Mr Alderman: There are a number
of issues there. Lord Goldsmith expressed certain views about
whether or not there was a defence available on the basis of alleged
consent. That was his particular view. My understanding is that
that is not an argument that is accepted by the OECD and others.
They do not regard consent as being a defence. I do take the point
there may be certain jurisdictions where there could be issues
about what the law is in relation to particular structures. In
that type of case, it is also relevant to look not just at clause
four but also at clause five and at what could be expected on
the part of the corporate, because we have been talking about
corporates here, in carrying out their due diligence and what
is expected from that.
Q398 Lord Lyell of Markyate: I am
sure that is right. It makes it highly relevant as to the American
practices. I think you would be rather surprised if you were asked
to give clearance in advance, whereas the Justice Department in
America seems to do that. We are dealing with very different climates.
Mr Alderman: We are. I talk to
a lot of corporates. I talk to their professional advisers about
all sorts of issues, particularly about corruption but about other
issues as well. They have been talking to me about a system of
advance appearances, rather like the Department of Justice offers.
We are thinking about that but only in connection with a certain
limited type of case. What we are not prepared to do—it
would be quite inappropriate for investigators and prosecutors—would
be for a company to come to us and say they are about to do business
in such and such a country with such and such people. Is that
all right by the SFO? Clearly, it would not be appropriate for
us to get into that. There may be other circumstances in which
we might be able to offer them some assistance along the lines
that the Department of Justice has.
Q399 Lord Lyell of Markyate: That
is very interesting but my mind instantly goes to the DPP's problems
with people who seek to commit suicidal fraud.
Mr Starmer: We are awaiting the
House of Lords judgment in that.
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