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Judgments - R (On The Application of Corner House Research and Others) V Director of The Serious Fraud Office

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45.  Step (2) in the claimants’ argument calls for consideration of article 12 of the Convention. This provides:

Monitoring and Follow-up

The Parties shall co-operate in carrying out a programme of systematic follow-up to monitor and promote the full implementation of this Convention. Unless otherwise decided by consensus of the Parties, this shall be done in the framework of the OECD Working Group on Bribery in International Business Transactions and according to its terms of reference, or within the framework and terms of reference of any successor to its functions, and Parties shall bear the costs of the programme in accordance with the rules applicable to that body".

It was pointed out, correctly, that this provision does not provide for a binding judicial interpretation of the Convention. It does, on the other hand, provide for a forum in which and a means by which differences of approach to the interpretation and application of the Convention can be discussed and either reconciled or resolved. As the Divisional Court rightly recognised, uniformity in these respects is highly desirable. For that reason, a national court should hesitate before undertaking a task of unilateral interpretation where the contracting parties have embraced an alternative means of resolving differences.

46.  The clear effect of article 5 is to permit national investigators and prosecutors to act in accordance with the rules and principles applicable in their respective states, save that they are not to be influenced by three specific considerations: (i) national economic interest, (ii) the potential effect upon the relations with another state, and (iii) the identity of the natural or legal persons involved. It is obvious why the parties wished to prohibit the paying of attention to (i): a bribery investigation or prosecution may very probably injure commercial, and thus economic, interests. The reason for excluding consideration of (iii) is also obvious: investigators and prosecutors should not be deterred from acting by the high ministerial office or royal connections of an allegedly corrupt person. The ambit of consideration (ii) is more doubtful. Clearly the investigator or prosecutor is not to be deterred by the prospect or occurrence of a cooling of relations between his state and that of the allegedly corrupt official, even if this escalates into a diplomatic stand-off involving (for instance) the denial of visas, the cutting off of cultural and sporting exchanges, the obstruction of trading activities, the expulsion of diplomats and the blocking of bank accounts. But can the negotiators have intended to include multiple loss of life within the description “potential effect upon relations with another State"? And can they, if so, have intended to deny to member states the right to rely on a severe threat to national security? An affirmative answer is given by Rose-Ackerman and Billa, “Treaties and National Security Exceptions” (Yale Law School, 2007). A negative answer was given by the Attorney-General in Parliament on 1 February 2007 (HL Debates, Hansard, col 378):

“I do not believe that the Convention does, or was ever intended to, prevent national authorities from taking decisions on the basis of such fundamental considerations of national and international security. I do not believe that we would have signed up to it if we had thought that we were abandoning any ability to have regard to something as fundamental as national security, and I do not believe that any other country would have signed up either".

The extreme difficulty of resolving this problem on a principled basis underlines the desirability of resolving an issue such as this in the manner provided for in the Convention.

47.  In my opinion, it is unnecessary and undesirable to resolve these problematical questions in this appeal, for two reasons. First, it is clear that the Director throughout based his adherence to article 5 on a belief that it permitted him to take account of threats to human life as a public interest consideration. Secondly, the Director has given unequivocal evidence that he would undoubtedly have made the same decision even if he had believed, which he did not, that it was incompatible with article 5 of the Convention. I cannot doubt, given its conclusion in para 41 above, that he would indeed have done so.

48.  I would allow the appeal and set aside the order of the Divisional Court save as to costs. The costs provision imposed by the Divisional Court on the Director as a condition of granting him leave to appeal will be given effect.

LORD HOFFMANN

My Lords,

49.  I have had the advantage of reading in draft the speech of my noble and learned friend Lord Bingham of Cornhill. For the reasons he gives, with which I agree, I too would allow this appeal.

LORD RODGER OF EARLSFERRY

My Lords,

50.  I have had the privilege of considering the speeches of my noble and learned friends, Lord Bingham of Cornhill and Lord Brown of Eaton-under-Heywood, in draft. For the reasons which they give, with which I am in entire agreement, I too would allow the appeal.

51.  In particular, I am satisfied that, as he deposed in his affidavit, the Director would have made the same decision, even if he had believed that it was incompatible with article 5 of the OECD Convention. That is consistent with the other evidence. The Director had received advice from a number of sources about the threat to national security if the investigation continued. It is plain that he weighed the advice carefully before acting on it, as he was fully entitled to do. In the light of the advice, the Director concluded that he had no option but to discontinue the investigation because of the potential threat to national and international security - British lives would be put at risk. In these circumstances, it is unnecessary, even supposing that it would be competent, for the House to interpret article 5.

BARONESS HALE OF RICHMOND

My Lords,

52.  I confess that I would have liked to be able to uphold the decision (if not every aspect of the reasoning) of the Divisional Court. It is extremely distasteful that an independent public official should feel himself obliged to give way to threats of any sort. The Director clearly felt the same for he resisted the extreme pressure under which he was put for as long as he could. The great British public may still believe that it was the risk to British commercial interests which caused him to give way, but the evidence is quite clear that this was not so. He only gave way when he was convinced that the threat of withdrawal of Saudi security co-operation was real and that the consequences would be an equally real risk to “British lives on British streets". The only question is whether it was lawful for him to take this into account.

53.  Put like that, it is difficult to reach any other conclusion than that it was indeed lawful for him to take this into account. But it is not quite as simple as that. It is common ground that it would not have been lawful for him to take account of threats of harm to himself, threats of the “we know where you live” variety. That sort of threat would have been an irrelevant consideration. So what makes this sort of threat different? Why should the Director be obliged to ignore threats to his own personal safety (and presumably that of his family) but entitled to take into account threats to the safety of others? The answer must lie in a distinction between the personal and the public interest. The “public interest” is often invoked but not susceptible of precise definition. But it must mean something of importance to the public as a whole rather than just to a private individual. The withdrawal of Saudi security co-operation would indeed have consequences of importance for the public as a whole. I am more impressed by the real threat to “British lives on British streets” than I am by unspecified references to national security or the national interest. “National security” in the sense of a threat to the safety of the nation as a nation state was not in issue here. Public safety was.

54.  I also agree that the Director was entitled to rely upon the judgment of others as to the existence of such a risk. There are many other factors in a prosecutor’s exercise of discretion upon which he may have to rely on the advice of others. Medical evidence of the effect of a prosecution upon a potential accused is an obvious example. Of course, he is entitled, even obliged, to probe that evidence or advice, to require to be convinced of its accuracy or weight. But in the end there are some things upon which others are more expert than he could ever be. In the end there are also some things which he cannot do. He is not in a position to try to dissuade the Saudis from carrying out their threat. Eventually, he has to rely on the assurances of others that despite their best endeavours the threats are real and the risks are real.

55.  I am therefore driven to the conclusion that he was entitled to take these things into account. I do not however accept that this was the only decision he could have made. He had to weigh the seriousness of the risk, in every sense, against the other public interest considerations. These include the importance of upholding the rule of law and the principle that no-one, including powerful British companies who do business for powerful foreign countries, is above the law. It is perhaps worth remembering that it was BAE Systems, or people in BAE Systems, who were the target of the investigation and of any eventual prosecution and not anyone in Saudi Arabia. The Director carried on with the investigation despite their earnest attempts to dissuade him. He clearly had the countervailing factors very much in mind throughout, as did the Attorney General. A lesser person might have taken the easy way out and agreed with the Attorney General that it would be difficult on the evidence to prove every element of the offence. But he did not.

56.  As to whether the safety of British lives on British streets is a prohibited consideration under article 5 of the OECD Convention, we do not need to express a view. Professor Susan Rose-Ackerman and Benjamim Billa of Yale Law School make a powerful case that there is no implicit exception for “national security” under the OECD Convention (“Treaties and National Security Exceptions", Yale Law School, 2007). But the Director has made it clear that he would have reached the same conclusion in any event and as a matter of domestic law he was entitled to do so.

57.  For these reasons, although I would wish that the world were a better place where honest and conscientious public servants were not put in impossible situations such as this, I agree that his decision was lawful and this appeal must be allowed.

LORD BROWN OF EATON-UNDER-HEYWOOD

My Lords,

58.  I have had the advantage of reading in draft the opinion of my noble and learned friend Lord Bingham of Cornhill and agree with everything that he says. On the first part of the case—the question whether the Director acted lawfully in “surrender[ing] to a threat” as the first certified question puts it—there is almost nothing that I wish to add to my Lord’s opinion. The Divisional Court appears to have founded its decision very largely on my judgment in the Divisional Court in the Phoenix Aviation case: R v Coventry City Council, ex parte Phoenix Aviation and others [1995] 3 All ER 37. That was, however, a strikingly different case. As I pointed out (at p.62), on the assumption that the port authorities there had a discretion whether or not to handle the export of live animals, they (or, in the case of Plymouth, the city council who were trying to stop their own port authority from continuing to permit this trade) “gave [not] the least thought” to the implications for the rule of law in barring this trade because of threats of disruption. The contrast with the position here could hardly be starker. As Lord Bingham has explained, the Director (and the Attorney General to whose superintendence he was subject) gave prolonged and profound thought to the implications for the rule of law in suspending this investigation in response to the Saudi Arabian threat. It is, indeed, some indication of the Director’s recognition of the extreme undesirability of doing so that he stood out for so long. In the end, however, the reality and the gravity of the threat having become ever more apparent to him, he concluded that there was no alternative:

“I considered the threat to the UK’s national and international security to be of such compelling weight that it was imperative that I should halt the SFO investigation at this point, in the public interest. It was this feature of the case which I felt left me with no choice but to halt the investigation. This was not a conclusion which I arrived at lightly; far from it.”

59.  The second certified question goes to the true construction and application of article 5 of the OECD Convention and the respondents’ argument here, powerfully advanced by Ms Dinah Rose QC, is that the Director wrongly believed himself to be acting consistently with article 5 and should now be required to exercise his discretion afresh. True it is that he has stated:

“[E]ven had I thought that discontinuing the investigation was not compatible with article 5 of the Convention, I am in no doubt whatever that I would still have decided, by reason of the compelling public interest representations . . ., that the investigation should be discontinued. The threat which I considered existed to UK national and international security if the investigation continued was so great that I did not believe there was any serious doubt about the decision I should make.”

Nevertheless, submit the respondents, there could be no certainty that he (or rather his successor) would reach the same decision once the Court had stated publicly that this would involve a breach of the Convention. He would then have to face up to the political consequences of such an act.

60.  The position here is not, submit the respondents, as it was in R v Secretary of State for the Home Department ex parte Fininvest Spa [1997] 1 WLR 743. There the Italian prosecuting authorities had requested the UK’s assistance under the European Convention on Mutual Assistance in Criminal Matters, 1959 (which was incorporated into domestic law). Article 2 of the Convention imposed a duty on the Secretary of State to assist save in the case of a political offence where he had a discretion to refuse. The Secretary of State, rightly as the Divisional Court ultimately held, declined to regard the particular offences in question as political and accordingly gave no thought to the exercise of a discretion. I pointed out, however, that in any event the Secretary of State had no need to have reached a decision on whether the offences were political:

“He could instead, had he wished, have decided that whether or not they were—whether or not in other words a discretion arose under article 2(a)—he would not in any event exercise it to refuse cooperation with the Italian authorities in the particular circumstances of this case. Had he followed that course or, indeed, had he deposed in the present proceedings that, even had he reached a contrary view on the political offence question, he would still have decided to comply with the request, his decision would in my judgment be proof against this particular ground of challenge, irrespective of whether or not he directed himself correctly on the substantive issue.”

61.  The respondents submit that it is one thing for a decision-maker to say, and for the Court to accept, that even had he understood the law correctly he would still have reached the same decision in circumstances where, as in Fininvest, the decision would have remained perfectly lawful; quite another where, as here, the same decision taken on a correct legal understanding would ex hypothesi have been unlawful.

62.  I see the force of this (although, of course, in this case, unlike the position in Fininvest, any unlawfulness would be under international law, not domestic law), and I accept also the respondent’s submissions, first, that there are indeed occasions when the Court will decide questions as to the state’s obligations under unincorporated international law (two such cases being R v Secretary of State for the Home Department ex parte Launder [1997] 1 WLR 839 and R v Director of Public Prosecutions ex parte Kebilene [2000] 2 AC 326, both concerned with the European Convention on Human Rights before it took effect in domestic law) and, secondly, that nothing in either R (Campaign for Nuclear Disarmament) v Prime Minister [2002] EWHC 2777 (Admin) or, more recently, in R (Gentle) v Prime Minister [2008] 2 WLR 879 (both concerning essentially unreviewable decisions) would preclude the Court from doing so here.

63.  Why, then, should the Court here not accede to the respondents’ invitation to construe article 5 and, if it accepts the respondents’ contended for construction, quash the Director’s decision and require it to be re-determined?

64.  There is not to my mind any one simple answer to this question although I am perfectly clear that the invitation must be declined and that the Divisional Court was right to have done so.

65.  Although, as I have acknowledged, there are occasions when the Court will decide questions as to the state’s obligations under unincorporated international law, this, for obvious reasons, is generally undesirable. Particularly this is so where, as here, the Contracting Parties to the Convention have chosen not to provide for the resolution of disputed questions of construction by an international court but rather (by article 12) to create a Working Group through whose continuing processes it is hoped a consensus view will emerge. Really this is no more than to echo para 44 of Lord Bingham’s opinion. For a national court itself to assume the role of determining such a question (with whatever damaging consequences that may have for the state in its own attempts to influence the emerging consensus) would be a remarkable thing, not to be countenanced save for compelling reasons.

66.  Are there such compelling reasons here? In my judgment there are not. There seem to me to be very real differences between this case and both Launder and Kebilene. In the first place, as Lord Bingham points out at para 43, there is a marked distinction between seeking to apply established Convention jurisprudence to the particular case before the court (as there) and determining, in the absence of any jurisprudence whatever on the point, a deep and difficult question of construction of profound importance to the whole working of the Convention (as here). Secondly, it seems to me tolerably plain that the decision-makers in both Launder and Kebilene, deciding respectively on extradition and prosecution, would have taken different decisions had their understanding of the law been different. In each case the decision-maker clearly intended to act consistently with the UK’s international obligations whatever decision that would have involved him in taking. That, however, was not the position here. Although both the Director (and the Attorney General) clearly believed—and may very well be right in believing—that the decision was consistent with article 5, it is surely plain that the primary intention behind the decision was to save this country from the dire threat to its national and international security and that the same decision would have been taken even had the Director had doubts about the true meaning of article 5 or even had he thought it bore the contrary meaning. All that he and the Attorney General were really saying was that they believed the decision to be consistent with article 5. This clearly they were entitled to say: it was true and at the very least obviously a reasonable and tenable belief. Both the Director’s and Attorney General’s understanding of article 5 was clearly apparent from their public statements: it was implicit in these that they understood article 5 not to preclude regard being had to fundamental considerations of national and international security merely because these would be imperilled by worsening relations with a foreign state.

67.  The critical question is not, as the respondents’ arguments suggest, whether the Director’s successor would make the same decision again once the Courts had publicly stated that this would involve a breach of the Convention; rather it is whether the Court should feel itself impelled to decide the true construction of article 5 in the first place. It simply cannot be the law that, provided only a public officer asserts that his decision accords with the state’s international obligations, the courts will entertain a challenge to the decision based upon his arguable misunderstanding of that obligation and then itself decide the point of international law at issue. For the reasons I have sought to give it would certainly not be appropriate to do so in the present case.

68.  Since writing the above I have chanced upon an article in the July 2008 Law Quarterly Review Vol. 124, p.388, International law in Domestic Courts: The Developing framework, by Philip Sales QC and Joanne Clement. This has strongly confirmed to me the view I have already taken. The following passage in particular seems to me worth quoting (omitting the footnoted references ) at pp 406 and 406:

“Part of the problem here is that the executive may not have any practical option but to direct itself by reference to international law, and if the rule of law in Launder is treated as unlimited it will lead to very extensive direct application of treaties and international in the domestic courts, thereby for practical purposes undermining the basic constitutional principle about non-enforceability of unincorporated treaties. One solution might be for the domestic courts, in recognition of the limits of their competence to provide a fully authoritative ruling on the point, the limits of their competence under domestic constitutional arrangements to rule on the subject-matter in question and the dangers posed to the national interest by them ruling definitively on the point at all, either to decline to rule or to allow the executive a form of ‘margin of appreciation’ on the legal question, and to examine only whether a tenable view has been adopted on the point of international law (rather than ruling on it themselves, as if it were a hard-edged point of domestic law). This is the approach which has been adopted by the ECtHR, when it has to examine questions of international law which it does not have jurisdiction to determine authoritatively itself. Adoption of a ‘tenable view’ approach would be a way—under circumstances where the proper interpretation of international law is uncertain, the domestic courts have no authority under international law to resolve the issue and the executive has responsibility within the domestic legal order for management of the United Kingdom’s international affairs (including the adoption of positions to promote particular outcomes on doubtful points of international law)—to allow space to the executive to seek to press for legal interpretations on the international place to favour the United Kingdom’s national interest, while also providing a degree of judicial control to ensure that the positions adopted are not beyond what is reasonable.”

The article goes on to suggest that the Launder approach must indeed be subject to limitations, dependent perhaps upon “the intensity of judicial scrutiny judged appropriate in domestic law terms in the particular context". I have no doubt this is so and that the question will require further consideration on a future occasion. I have equally no doubt, however, that in this particular context the “tenable view” approach is the furthest the Court should go in examining the point of international law in question and, as I have already indicated, it is clear that the Director held at the very least a tenable view upon the meaning of article 5.

 
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