“It has never been more important for the modern law to deter people from acting on the temptation to resort to bribery to secure business, both nationally and internationally”1
In its report published on 20 November 2008, the Law Commission sought to tackle accusations that the UK is failing to deal with corporate corruption matters by proposing a long awaited radical overhaul of the bribery laws in England and Wales2. The report recommended that the common law offence of bribery, the 1889, 1906 and 1916 Acts3 and all or part of a number of other statutory provisions will be repealed and replaced by a new set of statutory offences, a broad description of which is set out below:
- Offering or giving a bribe to induce someone to behave, or to reward someone for behaving, improperly;
- Requesting or accepting a bribe either in exchange for acting improperly, or where the request or acceptance is itself improper;
- Bribing a foreign public official (FPO), where the intention is to influence that official in his or her capacity as a FPO, in the obtaining or retaining of business advantages; and
- A negligent failure by a company or limited liability partnership to prevent bribes being given or offered on behalf of that organisation.
The Law Commission also recommended that Directors (or equivalent officers) of a body corporate who consent to or connive at the commission of the offences set out in (1), (2) and (3) by that body may be held criminally liable as individuals.
In addition, it was recommended that the law be extended to cover offences committed outside England and Wales by foreign nationals who reside in the UK and conduct their business here.
The draft legislation
The Government have broadly adopted the recommendations of the Law Commission. The four principal (categories of) offences will be:
- Offence of bribing another person
Offence (1) is concerned with the conduct of the payer. The payer must be shown, directly or through a third party, to have given, offered or promised an advantage to the recipient with the intention to induce the recipient to perform a relevant function or activity improperly or to reward the recipient for such conduct. It matters not whether the person to whom the advantage is offered is the same person who it is intended will perform the function improperly.
- Offences relating to being bribed
Offence (2) is concerned with the conduct of the recipient. The recipient must be shown to have requested, agreed to receive, or accepted an advantage intending that, in consequence, a relevant function or activity should be performed improperly. It does not matter whether the recipient receives or accepts the advantage directly or through a third party or whether it is for the recipient’s benefit or that of another.
- Bribery of a FPO
Offence (3) comprises a new discrete offence if it can be proved that an advantage not legitimately due was offered, promised or given to an FPO with the intention
- of influencing the FPO acting as an official; and
- of obtaining or retaining business.
- The new corporate offence: failure to prevent bribery
A commercial organisation (a corporate or a partnership) whose registered office is in England or Wales could be guilty where
- a bribe has been made; and
- the person responsible in the organisation for preventing bribes has been negligent in that duty.
The offence would be punishable by a fine. The offence creates a form of vicarious liability in order to deter companies from giving direct or indirect support to a culture of bribery on the part of those with whom they do business.
It is a defence for the organisation to show that there were adequate procedures in place designed to prevent employees or agents committing bribery. However, this defence will not apply if the person whose responsibility it was to prevent the bribery was a director, manager, or equivalent person within the organisation4.
The availability of this defence is an important limitation on liability for the offence and demonstrates that the key cause for concern is companies that fail to make continuing and systematic efforts to ensure that active bribery is not committed on their behalf.
The penalties on conviction would be the same as for fraud including, in the most serious cases, a sentence of up to ten years’ imprisonment following conviction on indictment.
Offences under the proposed legislation will be committed when any act or omission which forms part of the offence takes place within the jurisdiction or where any person ‘closely connected with the UK’ e.g. citizens, those ordinarily resident, bodies incorporated, does any act or omission which forms part of the offence wherever that may occur.
Conclusion and issues for consideration
The proposed legislation represents a long awaited simplification of the law on corruption and makes the UK compliant with its international obligations. But it will have a major impact on the way UK corporates manage their international business and the following issues are illustrative of that effect.
Some issues for consideration
- For a person to be convicted of bribery (either offence 1 or 2) the prosecution would have to establish “improper” performance of a relevant function or activity. The Bill defines improper in terms of breaches of an expectation that the function or activity would be performed in “good faith”, “impartially” or, when that function is being performed by a person in a position of trust, ‘consistently with that position of trust’. The test of what is expected is “a test of what a reasonable person would expect”5.
When one is deciding whether a payment in an overseas jurisdiction is improper, who will represent the reasonable person by whose standards the behaviour will be judged? Who is to judge whether something is being done “in good faith”, “impartially” or “in breach of a trust” in that other jurisdiction?
- The Law Commission recommended that it be a defence to an allegation of bribing a foreign official for the payer to show that he reasonably believed he was legally obliged or permitted to do so by the law of the foreign country, bearing in mind any steps the payer had taken to find out the true position. This defence has not been adopted in the proposed legislation, which means that any payment made to any foreign official with a view to influencing them in that capacity will be capable of being found to be a bribe if it is not “legitimately due”, whatever may be the view of the payer however reasonably held.
- The new corporate offence will be based upon the negligent acts of the person “within the organisation who is responsible for preventing the commission of the offences of paying bribes (Offences 1 and 3: note not 2) or if no such person exists, any “senior officer” of the organisation. But by reference to what standards will the court assess negligence? How will a jury decide whether the organisation had adequate procedures in place? These will surely need to be clear if criminal liability is to attach to any failure.