Examination of Witnesses (Questions 560
- 579)
WEDNESDAY 17 JUNE 2009
RT HON
JACK STRAW,
MR MICHAEL
DES TOMBE
AND MR
RODERICK MACAULEY
Q560 Chairman: So you say—if
there are ever any prosecutions at all.
Mr Straw: I think there will be
prosecutions. Obviously, if there are no prosecutions there will
be no great debate, but I suspect there will be prosecutions.
I do not think one should measure the success of the legislation
by whether there are scores and scores of prosecutions because,
with a bit of luck, this legislation would have a strong deterrent
and chilling effect, so it would change behaviour. If we were
to measure the success of, for example, the anti-smoking legislation
which came into force in July two years ago, we could say it is
a total failure because there has been one prosecution, but if
we use our own powers of observation we would say it has changed
people's behaviour and been a great success. In some areas when
you change the criminal law you measure the success by prosecutions
and convictions, in others you measure it by changes in behaviour,
but I think, generally, it will have a deterrent effect. However,
one way we will get a change of behaviour is by some prosecutions
which otherwise would not have taken place.
Chairman: We will come back to guidance
a little later on, but in general, I think, that is a round answer.
Thank you very much.
Q561 Dr Iddon: Thank you, my Lord
Chairman. Dealing with the main offences containing clauses 1
and 2, why does the active bribery offence require knowledge or
intention to be proven, whereas the passive bribery offence does
not? Is it fair to impose strict liability for a serious crime
such as bribery?
Mr Macauley: The clause 1 offence
requires mens rea in both cases, in both case 1 and 2.
In case 1 it is "intention" and in case 2 it is "knowledge
or belief". The clause 2 offences require intention in relation
to case 3 but for cases 4 to 6 there is no requirement for intention
or any kind of mens rea on the part of the person receiving
the bribe.
Q562 Chairman: Yes, we know that
but what is the justification for it?
Mr Straw: This is an offence of
being bribed, and the assumption in those cases is that it is
perfectly obvious to the person who is taking the money that they
are acting dishonestly. So you do not have to labour the point.
If you take, say, case 5, which is subsection 4 of clause 2, if
I agree to receive or accept a financial or other advantage as
a reward for the improper performance of a function, then I think
I should be guilty if I know it is improper. For these purposes,
I am a public official; I have to agree all the time plenty of
exercises of discretion, for example, about the liberty of individuals
or the partial liberty—whether they go into open conditions
in prison or whether they, in certain circumstances, may be released
early, and so on. If I were to accept a financial or other advantage
for the improper performance of my discretion there, I do not
think the prosecution should have to prove anything else but that
I exercised my discretion improperly and I took the money. To
ask the prosecution, on top of that, to show that I had acted
dishonestly, I think the matter would speak for itself. That is
really what we are seeking to capture in those later cases in
clause 2. Is that the correct answer, Mr Macauley?
Mr Macauley: Yes.
Q563 Chairman: It really is a strict
liability?
Mr Straw: I do not regard this
as strict liability (if I am not being pedantic) in the strict
sense of the term. Strict liability is: you commit an offence
if you stray across a double white line or you leave your car
parked on a double yellow line, and if you do then that is an
offence. I do not accept that the phrase "strict liability"
is appropriate here. What I believe is that the mens rea—the
guilty mind—is embedded in the circumstances of the offence.
It talks about "improper performance"; well, if you
are defence counsel you can have a lot of fun about whether their
performance was proper or improper, and that begs a moral question
about whether it was proper or was not proper. As I say, I do
not accept it is strict liability, in the sense in which you say
it. What we are trying to do is get a balance here between having
an offence which would be unjust and would lead to the conviction
of people who had not acted improperly or dishonestly and, on
the other hand, not creating so many hurdles so that the jury
are being invited to come to a judgment on which the only evidence
could be that of the defendant, which he declined to give, about
exactly what was going on in his mind, and try to make a judgment
instead about whether he had performed properly or improperly.
The other things are matters of fact. In many other crimes it
is the facts which speak for themselves, and the dishonesty is
implicit in the acts. If I take Mr Macauley's jacket and go and
sell it, then the court does not have to enquire exactly into
my state of mind; unless I have a really, really good reason for
why I did that, I think I am up for theft and one or two other
offences.
Q564 Mr Cox: Prosecutors have to
prove intention, whereas this section clearly makes it regardless
of whether he knows or believes it is improper.
Mr Straw: I am sorry, Mr Cox,
I do not accept that; I think in practice—
Q565 Mr Cox: It is subsection (7)
of section 2: "In cases 4 to 6 it does not matter whether
R knows or believes that the performance of the function or activity
is improper". So you could commit the offence sublimely oblivious
to the fact that you are doing anything wrong at all.
Mr Straw: If it is for the improper
performance of an act and you have accepted a financial or other
advantage. If you accept a financial or other advantage—that
is the first thing. If I am working for a company, so I am working
as a buyer in a company and working in my current job, and I accept
a financial or other advantage, first of all, are not the bells
supposed to be ringing in my head as to why I have accepted that
when it is not normal? You have to work in the real world here,
and I am sure you would have quite a lot of fun with this, Mr
Cox, if you were defending such individuals.
Q566 Mr Cox: It would not be fun
for the person prosecuted if he did not think he had done anything
wrong.
Mr Straw: If he had done nothing
wrong there would not necessarily be a prosecution, but I am saying
if the individual has accepted a financial or other advantage
as a reward, in circumstances where they are not supposed to accept
any financial or other advantage, to begin with, then that seems
to me a pretty good starting point for a prosecution. Then there
is the question of whether he has improperly performed his duties.
He is likely to have a fairly shrewd idea of whether his performance
of his duties is improper or not, but if he does not—and
he has been negligent about that—I think he would have to
take the consequences. We have to ensure that this bites, and
what we have sought to do is make it consistent with the OECD
arrangements which, on the whole, work elsewhere and work pretty
well. So the protection here, Mr Cox, my Lord Chairman, is that
of the jury; they will be able to come to a common-sense view,
if it is palpable that the person had entirely proper motives
all the way through and acted entirely properly, and the whole
thing was a mistake and, indeed, it was routine for buyers in
Tesco's to accept commissions which they did not disclose to their
employer and other such matters. Wholly improbable, but then that
would be taken into account, and there is a high level of prosecutorial
discretion as well.
Chairman: I think, Secretary of
State, what has been left out here is the material upon the basis
of which the prosecution is brought and the witness statements
and other investigative proceedings. These themselves would give
an indication to the prosecution on what should and should not
be pursued.
Q567 Lord Anderson of Swansea: A
possible example where mens rea may be relevant is where
a developer negotiates with a planning officer of a local authority
on planning gain and it so happens that the planning gain is a
benefit to a local community but, also, happens to benefit relatives
of the planning officer. Is not mens rea relevant in that?
Mr Straw: You are talking about
section 106, which I talked about yesterday in a briefing session.
My Lord Chairman, I will give you a more detailed answer after
the vote.
The Committee suspended from 3.19 pm to 3.32
pm for a division in the House of Commons
Chairman: We have got three questions
on some of the technicalities about "legitimately due",
and the possibility of removing that, and the question of whether
it should be tied up in written law rather than anything else.
Q568 Dr Turner: Can we look at clause
4, which relates to bribery of foreign officials? Could you explain
the rationale for including the "not legitimately due"
test in clause 4? Can you give specific examples of the types
of advantage that it may be legitimate to give to an official?
Mr Straw: One of the behaviours
that I can think about was referred to in the last question I
was asked before the division, and which I raised yesterday in
my briefing session. This is circumstances in which there is a
debate and then a decision made under section 106 of the Town
and Country Planning Act 1990, which provides that the developer
pays over to the benefit of the community, or for individuals
within the community, part of the planning gain that they are
otherwise achieving. This involves what amounts to offsetting,
common and acceptable business practices but, also, common here
in that: "I am a developer, I want to put up a shopping centre,
I am going to make a lot of money out of it", and the planning
authorities say: "Okay, you can provide this amount of social
housing or you can provide this community centre." If, say,
it is social housing, you could end up in a situation where, incidentally,
the official is benefiting himself—not improperly but is
benefiting himself—from this social housing. It is exactly
that circumstance, using an example in English law, that this
excludes, and it is essentially a protection for officials who
might otherwise (and, indeed, for P, who is the person guilty
of the offence) be thought to be bribing a foreign public official.
I use that domestic example but I assume that there are plenty
of cases where the equivalent of section 106 applies in other
countries.
Q569 Dr Turner: The example of section
106 is, perhaps, not an especially apposite one because normally
an individual official does not personally benefit from a section
106 agreement; it is the community at large which normally benefits
from that. Can you give an opinion on the possibility of withdrawing
the test of "legitimately due", which has been suggested
by several serious players? What are the implications of removing
that test? In particular, would the removal of the phrase lead
to clause 4 catching conduct which should not be viewed as criminal?
Mr Straw: Obviously, if your Committee,
my Lord Chairman, comes to the view that "not legitimately
due" should be excluded from the drafting, I will give very
careful consideration to that, but I do not want to give a snap
answer here. My judgment up to now has been that this is a sensible,
as it were, additional condition for a prosecution. I, for the
reasons I have suggested, think that it helps to deal with, as
it were, the equivalent of section 106 situations. The answer
to your point about whether the official would not normally benefit—that
may or may not be the case—was provided by Lord Anderson
in the question that he asked me before the break. He might be
benefiting. If I am an official and I negotiate a section 106
agreement, and I happen then to benefit from, say, the social
housing which has resulted, that is not improper, but it could
be construed as being improper unless there is protection. That
is the sort of thing we are talking about.
Q570 Chairman: Would it, at least,
be necessary that there should be a written provision in the law?
Mr Straw: We have also had a debate
about this in the briefing session. If you are not dealing with
written law then you are down the track of custom and practice,
which typically, in certain states which I could quote, differs
very markedly from what is written. As far as I know, I cannot
think of a single state which says it is entirely legitimate to
accept bribes and to act improperly. So if you go through some
of the nations whose practices are some of the dodgiest, the black
letter text of their law will, on the whole, be pretty impeccable.
What is not impeccable is their enforcement of the law and their
custom and practice, part of which is to ignore what is in the
black letter law. If you admit that part of the law is what they
say it is—and literally say it is rather than having it
written down and having been properly approved—they might
as well, I think, tear up this offence. As I say, I can think
of, certainly, one foreign jurisdiction (which I will not quote),
to my certain knowledge, where what is written down in black letter
law is perfectly good—similar to ours, both in the criminal
law and areas of public administration law—but what actually
happens is something completely different. What we are trying
to do is to ensure that we subscribe to the OECD criteria and
standards, and the OECD is trying to raise the standards of behaviour.
It will not achieve that if it actually ends up by conniving about
the worst kind of practices. So if you do not add that in, as
I say, it makes the offence risible.
Q571 Dr Turner: Where do you draw
the line, Jack, between a bribe, under these circumstances—because
no state is going to have a law which says: "It is perfectly
legitimate to bribe our officials" (it just does not happen)—and
a perfectly legitimate commission to a law officer or whatever?
Mr Straw: That is straightforward
because if it is legitimately due it is fine. That answers your
question.
Q572 Dr Turner: It will not necessarily
be defined in law.
Mr Straw: What has happened up
to now is this: businesses here and in other OECD countries, and
business people, have been in the really invidious position of
being, really, forced—in fact, have been blackmailed—by
foreign officials in the local jurisdiction to pay some kind of
"commission" because they say: "That's how we do
things, and if you want this business you are going to have to
pay us a commission." The moment they do that then they are
compromised. What the OECD is trying to do is establish its own
norms of behaviour and say: "Sorry, these things are not
acceptable. If, state X, you have said in your black letter law,
that you say is your law, that something is unlawful, well, that
is the standard against which you are going to be judged."
What we are trying to get to achieve is a situation where business
men and women from all over OECD states say to these public officials
in this foreign jurisdiction: "We cannot do business with
you on that basis, and we are going to treat you like a pariah".
Q573 Dr Turner: Jack, how would this
apply to officials being given hospitality by potential suppliers—if
you like, oiling the wheels of a deal—which is pretty normal
behaviour in commercial practice? Could this be criminalised here?
Mr Straw: Whether hospitality
is legitimate or outrageous is a matter of degree and of judgment.
I was thinking, on the way back up here, about the Poulson case.
If I may say so, Dr Turner, you may be of the same antiquity as
me so will remember the Poulson case. A large part of the advantage
that John Poulson lavished on those he was corrupting and bribing
was in terms of hospitality. If it is corporate hospitality—if
it is one lunch, one party, in a UK context, one ticket to Ladies
Day at Ascot, one day at Wimbledon—fine; if it is a corner
table at the Connaught whenever you want to use it for whoever
you wish to entertain, then that raises very big questions. As
I say, it is a matter of degree and it would be a matter for prosecutorial
judgment, but if it is something which is an accepted norm—normal
hospitality—no prosecutor is going to prosecute and no jury,
more importantly, would convict. On the other hand, if it is up
at the level of Poulson hospitality—that was his excuse:
this was just normal hospitality and the fact that he took people
to the races and provided them with money with which to bet and
there was a running free table was all fine, he said; that was
just normal. In the end, the police, prosecutors and juries did
not share that view.
Chairman: Dr Turner, I am terribly sorry,
we must move on. Lord Williamson, you wanted to ask about the
"reasonable belief" defence.
Q574 Lord Williamson of Horton: Mr
Straw, we spend hours in this Committee talking about foreign
officials. Can I just ask you one more question? In the Law Commission's
version there was a "reasonable belief" defence, that
is to say that someone reasonably believed that a foreign official
was required or permitted to accept the advantage. The Government
struck that out in the draft Bill. Some people think it was a
good decision to strike it out and some of our witnesses think
that it should still be there. Can you say whether you think there
is any risk, without the "reasonable belief" defence,
that some businesses would be open to prosecution because they
had poor legal advice and also that there would be too much weight
on the prosecutor's discretion, which the Director of Public Prosecutions
thought when he spoke to us?
Mr Straw: I am sorry, Lord Williamson,
too much weight on the prosecutor?
Q575 Lord Williamson of Horton: On
the prosecutor's discretion whether to open a prosecution.
Mr Straw: As I say, this goes
to some of the earlier questions, particularly in respect of clause
2, about how you achieve the correct balance with these offences,
on the one hand to ensure that they are fair to defendants (and
that is of fundamental importance), on the other hand that you
do not provide so many rabbit holes that you are never able to
convict a defendant who the public would regard as guilty of this
particular offence. Our judgment, in the end, but I am happy to
consider this further, is that the "reasonable belief"
test was unnecessary and would simply overburden the offences.
I have quite a lot of faith in prosecutors, and I have got even
more faith in juries. Juries operate by looking at behaviours
in the round, on the whole. They can be eccentric but, taking
one jury or another, that is what they do. So that is my view.
Chairman: Can we go on to the
corporate offence, negligence or gross negligence.
Q576 Martin Linton: Clause 5 provides
the corporate offence, and Professor Wells pointed out that there
is something of a belt and braces approach here, in that you have
to show that failure is negligent, but there is also the defence
of adequate procedure. She suggests that we do not actually need
the word "negligent" and we could just rely on the "adequate
procedures" defence. What is your view about that?
Mr Straw: I think that would be
unfair. Here, in a sense, we are leaning towards defendants, but
this is where there would be a prosecution of a commercial organisation,
the vicarious liability of the senior people in it. My own belief,
Mr Linton, is that it is reasonable to have negligence as well
as a failure to operate a proper system as one of the tests and,
as to negligence, the courts are very well practised in making
judgments about what is negligent and what is not negligent. Ultimately,
these are judgments on the facts of the case, but the courts have
spent decades and decades assessing what is a standard of care
and whether or not it has been breached.
Q577 Martin Linton: Is there not
a danger that this would provide too great an onus? Bearing in
mind the history of the last Bill, which resulted in, I think,
one prosecution, are there not dangers in making the threshold
too high, too difficult?
Mr Straw: For a prosecution?
Q578 Martin Linton: Yes.
Mr Straw: I know from the question
sheet that one of the suggestions would be to raise the threshold
to gross negligence. I certainly would not go there. This is a
matter of judgment, but, as I say, I think that where you are
dealing with a criminal prosecution—we are not talking about
civil liability but a criminal prosecution of senior people in
a company in respect of the behaviour of others—
Q579 Martin Linton: You would not
have to prove negligence for the senior people, only the junior
managers.
Mr Straw: As I say, in these circumstances
you have to be really careful. That is my view.
Martin Linton: I was going to
ask about the gross negligence as well, but that has already been
covered.
Chairman: I would like you to
do so, because there has been such trouble about corporate liability.
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