Law Commission Reforming the law Reforming Bribery Law Commission Reforming Bribery Law Com No 313 Law Com No 313 The Law Commission (LAW COM No 313) REFORMING BRIBERY Laid before Parliament by the Lord Chancellor and Secretary of State for Justice pursuant to section 3(2) of the Law Commissions Act 1965 Ordered by The House of Commons to be printed 19 November 2008 HC 928 London: The Stationery Office £34.55 0 Crown Copyright 2008 The text in this document (excluding the Royal Arms and other departmental or agency logos) may be reproduced free of charge in any format or medium providing it is reproduced accurately and not used in a misleading context. The material must be acknowledged as Crown copyright and the title of the document specified. Where we have identified any third party copyright material you will need to obtain permission from the copyright holders concerned. For any other use of this material please write to Office of Public Sector Information, Information Policy Team, Kew, Richmond, Surrey TW9 4DU or e-mail: [email protected] ISBN: 9780102958164 ii THE LAW COMMISSION The Law Commission was set up by the Law Commissions Act 1965 for the purpose of promoting the reform of the law. The Law Commissioners are: The Right Honourable Lord Justice Etherton, Chairman Professor Elizabeth Cooke Mr David Hertzell Professor Jeremy Horder Mr Kenneth Parker QC The Chief Executive of the Law Commission is Mr William Arnold. The Law Commission is located at Steel House, 11 Tothill Street, London SW1H 9LJ. The terms of this report were agreed on 2 October 2008. The text of this report is available on the Internet at: http://www.lawcom.gov.uk/bribery.htm iii THE LAW COMMISSION REFORMING BRIBERY CONTENTS Paragraph Page SUMMARY xiii PART 1: INTRODUCTION 1.1 1 Introduction 1.1 1 Outline of the scheme recommended 1.4 2 Structure of this report 1.9 3 PART 2: THE CURRENT LAW, ITS DEFECTS AND 2.1 5 PREVIOUS ATTEMPTS AT REFORM The current law 2.2 5 Bribery at common law 2.4 5 The bribe: “any undue reward” 2.5 5 A public officer 2.6 6 The mental element 2.8 6 The 1889 Act 2.9 6 The bribe: “gift, loan, fee, reward or advantage” 2.10 7 A “public body” 2.12 7 The 1906 Act 2.14 7 The bribe: “any gift or consideration” 2.15 8 An “agent” 2.16 8 The 1916 Act 2.18 9 Extra-territorial jurisdiction 2.20 9 Problems with the current law 2.23 10 Fragmentation 2.24 10 Imperfect distinction between public and private sector 2.25 10 bribery Inconsistencies and uncertainties in terminology and 2.27 10 scope The bribe 2.28 11 Those capable of being bribed 2.29 11 Connections between the bribe and the conduct 2.32 11 influenced The meaning of corruptly 2.33 11 Lacuna where bribery is committed outside England 2.34 12 and Wales The background to the project 2.35 12 Our previous report on corruption 2.35 12 iv Paragraph Page The Government’s response to the previous report 2.36 13 The Joint Committee on the draft Corruption Bill 2.37 13 The Government’s response to the Joint Committee 2.38 13 The most recent Government consultation and our 2.39 14 second referral PART 3: THE ELEMENTS OF THE GENERAL 3.1 15 OFFENCES Our recommendations in brief 3.2 15 The threshold condition 3.3 15 P’s offence 3.4 15 The basic element 3.4 15 The wrongfulness element: seeking a favour 3.5 16 from R The wrongfulness element: compromising R 3.6 16 R’s offence 3.7 16 The basic element 3.7 16 The wrongfulness element: when R provides a 3.8 16 favour The wrongfulness element: when R 3.9 17 compromises him or herself The “expectation” of propriety 3.10 17 The threshold condition: bribery’s limits as a form of criminal 3.12 17 wrongdoing Avoiding the enforcement of morality in inappropriate 3.12 17 contexts The functions and activities to which the general 3.18 18 offences of bribery will apply The definition of “functions of a public nature” 3.18 18 The definition of trade, profession, employment 3.21 19 or business Companies and unincorporated associations 3.25 20 Past or present functions, trade, employment or 3.26 20 business etc activities Recommendation 3.28 20 Two general offences of bribery 3.29 20 Recommendation 3.33 21 The offence committed by the payer 3.34 21 The basic element of P’s offence 3.34 21 The definition of “advantage” 3.35 21 The offer or promise of an advantage 3.41 23 Should the advantage conferred have to be 3.47 24 “undue”? v Paragraph Page Rewarding improper conduct 3.48 24 Recommendation 3.51 24 The wrongfulness element in P’s offence: seeking a 3.52 25 favour from R The proposals in the CP 3.53 25 The element of wrongfulness in P’s conduct 3.58 26 when P seeks a favour from R: consultees’ responses Our revised approach to the wrongfulness 3.67 28 element in P’s conduct when P seeks a favour from R Must the person P approaches be the 3.71 29 one to receive the advantage? Recommendation 3.72 29 The wrongfulness element in P’s conduct: 3.73 29 compromising R Recommendation 3.77 30 The offence committed by the recipient 3.78 30 The basic element of R’s offence 3.78 30 Recommendation 3.85 31 The wrongfulness element of R’s offence 3.86 31 The proposals in the CP 3.86 31 Should we retain the “legal or equitable duty” 3.88 32 restriction? Consultees’ alternative definitions of a “corrupt 3.99 34 breach of duty” Should the “improper act” (breach of 3.100 34 duty) in bribery be left undefined? Should the improper nature of an act be 3.111 37 linked to whether it was done “dishonestly”? Conclusion on the basic definition of the breach 3.119 38 of duty Escaping the confines of “legal or equitable 3.120 39 duty”: bribery and fraud The analogy between bribery and fraud 3.120 39 The overlap between bribery and fraud 3.126 40 The wrongfulness element in R’s conduct: general 3.133 41 considerations Expectations relating to good faith, to impartiality and to 3.136 42 a position of trust Acting in good faith 3.141 43 Remaining impartial 3.153 46 A position of trust 3.156 46 vi Paragraph Page Leaving the matter to the jury 3.170 49 Analogous approaches in other areas of the criminal 3.172 49 law How the jury is to approach the issue 3.175 50 Illustrative difficult cases 3.180 51 Conclusion on the nature of “improper” conduct 3.188 52 R’s awareness of the wrongful nature of his or her 3.190 53 conduct The link between the giving of the advantage and the 3.191 53 impropriety Paths to the commission of bribery by R 3.193 53 Are “public servants” in a special position, justifying a discrete 3.212 57 offence Recommendations 3.219 59 A “short form” summary of P’s and R’s obligations 3.226 60 PART 4: BRIBERY OF A FOREIGN POLICY OFFICIAL 4.1 61 – THE BACKGROUND TO AND DEFICIENCIES OF THE CURRENT LAW The United Kingdom’s obligations under the OECD 4.2 61 convention The current law 4.6 62 The parliamentary background 4.6 62 The part 12 provisions 4.10 63 Deficiencies of the current law 4.15 65 The agent/principal relationship 4.19 66 Uncertainty within and inconsistency between 4.21 67 definitions Application to intermediaries and third party 4.23 67 beneficiaries Possible inadequacies of corporate criminal 4.24 67 liability Consent to prosecution 4.26 68 PART 5: A DISCRETE OFFENCE OF BRIBING A 5.1 69 FOREIGN PUBLIC OFFICIAL Introduction: A new offence of bribing a foreign public 5.1 69 official Overview of our conclusions 5.3 69 The provisional proposals in the CP 5.9 70 The responses of consultees to the CP 5.12 71 Those in favour of a discrete offence 5.12 71 Those against the provision of a discrete offence 5.16 72 vii Paragraph Page The United Kingdom’s international obligations 5.26 74 The OECD’s Anti-Bribery Convention 5.26 74 The core obligation imposed by the OECD 5.28 74 Convention The limitations of the OECD Convention, 5.39 74 and our recommendations FPO exchanges influence for an 5.40 76 advantage for a third party Third party advantaged, with a view 5.41 76 to P influencing the FPO Providing advantages to a third 5.43 76 party to influence the FPO Advantage exchanged for influence 5.53 78 with prospective FPO FPOs and foreign political parties 5.58 79 The case for a discrete offence of bribing a foreign public 5.61 80 official Demonstrating a commitment to our international 5.62 80 obligations Making it easier to interpret the law in the light of 5.63 80 international obligations Facilitating a comparative approach 5.67 82 Recommendation 5.71 82 The elements of the discrete offence 5.72 82 The offence itself 5.72 82 Changes in the offence from the version in the CP 5.73 82 Illustrating the elements of the offence 5.77 83 The basic case of bribery 5.77 83 Requests by the FPO to benefit a third 5.79 83 party Advantages “not legitimately due”, and facilitation 5.81 84 payments The OECD Convention and the CP 5.81 84 The OECD’s and the CP’s position on 5.85 85 facilitation payments The views of consultees 5.91 86 The phrase “not legitimately due” 5.91 86 Facilitation payments 5.99 87 Our recommended approach to facilitation 5.108 89 payment Conclusion 5.111 89 The fault element of the offence 5.112 89 Intention alone, not recklessness 5.112 89 viii Paragraph Page Recommendation 5.119 91 Defining foreign public official 5.120 91 An autonomous definition 5.120 91 The problem of political parties and their 5.127 92 officials Officials of public international 5.130 93 organisations Recommendation 5.136 94 Should the discrete offence also inculpate the 5.137 94 foreign public official who accepts or solicits a bribe? The views of consultees 5.137 94 Conclusion 5.144 95 Should the offence extend to bribery of foreign 5.145 96 private persons? Conclusion 5.148 96 PART