The Law Commission Consultation Paper No 185 REFORMING BRIBERY A Consultation Paper The Law Commission was set up by section 1 of the Law Commissions Act 1965 for the purpose of promoting the reform of the law. The Law Commissioners are: The Honourable Mr Justice Etherton, Chairman Mr Stuart Bridge Mr David Hertzell Professor Jeremy Horder Kenneth Parker QC Professor Martin Partington CBE is Special Consultant to the Law Commission responsible for housing law reform. The Chief Executive of the Law Commission is Steve Humphreys and its offices are at Conquest House, 37-38 John Street, Theobalds Road, London WC1N 2BQ. This consultation paper, completed on 31 October 2007, is circulated for comment and criticism only. It does not represent the final views of the Law Commission. The Law Commission would be grateful for comments on its proposals before 20 March 2008. Comments may be sent either – By post to: David Hughes Law Commission Conquest House 37-38 John Street Theobalds Road London WC1N 2BQ Tel: 020-7453-1212 Fax: 020-7453-1297 By email to: [email protected] It would be helpful if, where possible, comments sent by post could also be sent on disk, or by email to the above address, in any commonly used format. We will treat all responses as public documents in accordance with the Freedom of Information Act and we may attribute comments and include a list of all respondents' names in any final report we publish. Those who wish to submit a confidential response should contact the Commission before sending the response. We will disregard automatic confidentiality disclaimers generated by an IT system. This consultation paper is available free of charge on our website at: http://www.lawcom.gov.uk/bribery.htm THE LAW COMMISSION REFORMING BRIBERY – A CONSULTATION PAPER CONTENTS Paragraph Page PART 1: REFORMING BRIBERY 1.1 1 Introduction 1.1 1 Objective 1.2 1 Terms of reference 1.4 1 The problems with the current law 1.5 3 Specific problems 1.8 3 The distinction between public sector and private sector 1.8 3 bribery Should the law continue to draw a distinction 1.11 4 between bribery in the public sector and bribery in the private sector? Principal arguments for and against retaining a 1.13 4 distinction between the public and private sector Conclusion 1.15 5 Provisional proposal 1.17 5 Further problems caused by the co-existence of the 1889 1.19 6 Act and the 1906 Act Charging under the wrong statute 1.19 6 The scope of the respective statutes 1.20 6 No consistent terminology 1.21 6 The meaning of ‘agent’ 1.22 6 The meaning of ‘corruptly’ 1.23 6 Bribery committed outside England and Wales 1.24 7 General considerations 1.25 7 Summary of main proposals 1.33 9 Summary of the paper 1.34 11 PART 2: THE CURRENT LAW 2.1 13 The common law 2.2 13 The bribe: “any undue reward” 2.3 13 A “public officer” 2.4 14 The mental element 2.6 14 The 1889 Act 2.7 14 The bribe: “gift, loan, fee, reward or advantage” 2.8 15 A “public body” 2.10 15 iii Paragraph Page The 1906 Act 2.12 16 The bribe: “any gift or consideration” 2.13 16 An “agent” 2.14 16 Differences in scope between the 1889 and 1906 Acts 2.17 17 The meaning of “corruptly” 2.22 17 The 1916 Act 2.23 18 The presumption of corruption 2.24 18 Extraterritorial jurisdiction 2.26 18 Prosecution and conviction statistics 2.30 19 PART 3: PREVIOUS ATTEMPTS TO REFORM THE LAW OF 3.1 20 BRIBERY Introduction 3.1 20 Our previous project on corruption 3.2 20 The Government’s response to our previous report 3.4 21 Approval of our previous report 3.6 21 Proposals contrary to, or in extension of, our previous 3.7 22 report The Joint Committee on the draft Corruption Bill 3.8 22 The Government’s response to the Joint Committee 3.9 23 The most recent Government consultation 3.11 23 The Government’s response to consultation 3.13 24 Conclusion 3.24 25 PART 4: A MODEL FOR BRIBERY 4.1 26 The issues 4.1 26 The history 4.8 28 The principal and agent model 4.14 28 Cases where “principal” points to the wrong person 4.19 29 Cases where there is no principal 4.27 31 Why do we need a principal anyway? 4.29 31 Principal to principal bribery 4.33 32 Conclusion on principal/agent model 4.42 33 The market model 4.44 34 Improper payment model 4.48 35 The problem case 4.54 36 Option 1: Include all types of ‘breach of duty’ 4.55 36 Option 2: Create a separate offence for facilitation 4.60 37 payments Option 3: Exclude from the ambit of bribery those cases 4.62 37 where the only breach of duty is the acceptance of the conferred advantage Provisional proposal and question for consultees 4.63 38 iv Paragraph Page Improper influence model 4.65 38 Forms of the influence model 4.68 38 An example of the influence model 4.73 39 “Payment to do the right thing” 4.77 40 Further examples 4.84 41 Definition of impropriety 4.87 42 The first approach: requiring impropriety as an element 4.88 42 The second approach: relying on specific defences 4.92 43 Defence of principal’s consent 4.92 43 Abandoning the defence 4.95 44 Remuneration defence 4.99 45 Other criticisms of this approach 4.103 45 Conclusion 4.110 47 Provisional proposal 4.114 48 The improper conduct model 4.115 48 An example of the improper conduct model 4.118 48 Our previous proposal 4.121 49 Criticisms of our proposal 4.124 50 Under-inclusive: payment to do the right thing? 4.129 51 Over inclusive: what duties should be included? 4.134 52 Gifts after the event: whether to retain influence test 4.137 52 Provisional proposal 4.143 53 PART 5: THE CONDUCT ELEMENT OF THE NEW BRIBERY 5.1 54 OFFENCE Introduction 5.1 54 The structure of Parts 5 and 6 5.2 54 Core concepts 5.4 54 Improper conduct 5.6 55 Introduction 5.6 55 Using “improperly” without defining it 5.9 55 Purely moral duties 5.13 56 Provisional proposal 5.16 57 Legal and equitable duties 5.17 57 The duty of impartiality 5.18 57 Practical difficulties 5.22 58 Recipient’s belief in breach of duty 5.27 59 What kind of duty? 5.29 60 Crime 5.30 60 Tort 5.32 60 Contract 5.37 61 v Paragraph Page Public office 5.46 63 Conclusion 5.47 64 Provisional proposal 5.50 64 Question for consultees 5.52 65 Practicality and the bribery of foreign officials 5.55 65 Defining an ‘advantage’ 5.56 65 Provisional proposal 5.60 66 An ‘undue’ advantage 5.62 67 Provisional proposal 5.64 67 Applying the terms 5.65 67 The recipient’s conduct element 5.67 67 Soliciting an advantage by representing a willingness to 5.68 68 act improperly Provisional proposal 5.71 68 Trading in influence 5.73 69 Illustrating the problem 5.74 69 The problem case 5.78 71 Convention requirements 5.81 71 Current law and our previous 5.83 72 recommendations Options for reform 5.85 72 Provisional proposal 5.89 73 Receipt of the advantage 5.92 73 Does R, as opposed to some other person, have to 5.92 73 receive the advantage? Where the advantage is not conferred at all 5.93 74 Provisional proposal 5.95 74 Where the advantage is conferred on a third 5.96 74 party Provisional proposal 5.98 75 Does R have to hold a certain position when the 5.99 75 advantage is conferred? Provisional proposal 5.101 75 The payer’s conduct element 5.102 75 Soliciting or inducing an improper act by representing a 5.103 75 willingness to confer an advantage Provisional proposal 5.107 76 The circumstances surrounding the conferral of the 5.108 76 advantage Does R have to receive the advantage ‘personally’? 5.109 77 Where the advantage is conferred on a third 5.110 77 party in order to induce R to act improperly Where R is an intermediary 5.111 77 vi Paragraph Page Does P have to confer the advantage ‘personally’? 5.113 77 Does R have to have performed the improper act? 5.118 78 Provisional proposal 5.120 79 Does R have to hold a certain position when the 5.121 79 advantage is conferred? PART 6: THE FAULT ELEMENT OF THE NEW BRIBERY 6.1 80 OFFENCE Introduction 6.1 80 The recipient’s fault element 6.3 80 R does an improper act after P confers an advantage 6.5 81 (scenario 1) Introduction 6.5 81 Must the advantage have to influence R’s decision to do 6.7 81 the improper act? The current law and our previous recommendations 6.7 81 Departing from our previous recommendation 6.10 82 To what extent must the advantage influence R’s 6.16 83 decision to act improperly? Provisional proposals 6.19 83 If the primary reason for R doing the improper 6.21 84 act is the advantage, should it make any difference that R realises that P is not conferring the advantage in order to influence R to do the improper act? Question for consultees 6.27 85 Must R know or believe that the act is an ‘improper’ act? 6.28 85 Provisional proposal 6.30 85 The improper act done by R is different from that which 6.31 86 was intended or agreed Provisional proposal 6.36 87 R does an improper act before P confers an advantage 6.37 87 (scenario 2) Introduction 6.37 87 The current law and our previous proposals 6.38 88 Departing from our previous recommendations 6.42 89 Provisional proposals 6.46 90 Ancillary matters relating to the fault element required of 6.48 90 R R represents a willingness to do an improper act (scenario 3) 6.49 90 Our previous recommendations 6.50 91 Departing from our previous recommendations 6.52 91 Provisional proposal 6.58 92 Ancillary matters relating to R’s fault element 6.61 92 vii Paragraph Page The payer’s fault element 6.62 93 P confers an advantage on R before R does an improper act 6.65 93 (scenario 1) Introduction 6.65 93 Legitimate and illegitimate influence 6.68 94 Our previous provisional proposals 6.75 95 Our previous report 6.78 96 Going beyond our previous recommendations 6.81 97 Provisional