Bribery Act 2010: Post-legislative Scrutiny (Select Committee Report)

Debate between Lord German and Baroness Henig

Wednesday 3rd February 2021 Grand Committee

[Lord German (LD) [V]]

This is a very welcome report, and it is pleasing to note that the Act in itself is robust, and that most of the concerns expressed are related to the operation of the Act. Of course, this debate has been a long time coming, as noble Lords have said. Between its publication in March 2019 and the Government’s response in May 2019 and now, nearly two years later, a great deal of time has elapsed, and progress in our courts has been held up significantly by the pandemic. Looking at this in a positive way, this delayed debate provides an opportunity to review the report and the response by looking at what has changed over the intervening period since their publication.

I have the impression that at, about, or close to the period of publication, a major change of internal emphasis took place in the Serious Fraud Office. I got a sense of a clearing out, a refreshment, and a new approach to its work. This was very encouraging. However, I would be grateful if the Minister in reply could indicate whether my impression is born out of reality.

I note the report’s comments on how the SFO handled large amounts of documentation, which was a contributory factor to the long delays in producing outcomes to its investigations. For example, it talks of millions of documents being scrutinised in the course of the Rolls-Royce investigation. The reality is that data, by which I mean documents and digital information, will increase, not decrease. The report mentions the introduction of artificial intelligence as a means of aiding this scrutiny. That approach is essential, because the demand for better correlation of information and timeline creation, sometimes spanning multiple sources of information, will increase as the number of data sources increase. I would be grateful for an update from the Minister on how this challenge is being met. Does the Minister agree that this approach will be an important tool in the armoury of the SFO in dealing with the complexity of modern business activity? Much evidence will be in electronic form on a multitude of different platforms. Identifying and comparing strands of an investigation will be much enhanced by the use of AI.

The SFO evidence provided to the inquiry and the report itself raise the question of vicarious liability. That case has just been outlined by my noble friend Lord Stunell; the report does not rule it out but says that it is beyond its scope. The SFO, in supporting the case for this approach in its evidence, states:

“From a prosecutor’s point of view this lack of clarity”—


—that is, the identification principle approach—

“is a significant disadvantage in attributing corporate liability”,

and says that

“the clear principle of vicarious liability for criminal acts by employees acting for a company creates a much stronger enforcement regime.”

In response, the committee’s report states that this issue goes beyond offences under the Bribery Act. In view of that response, can the noble and learned Lord, Lord Saville, the chair of the committee, say whether he considers that a further investigation into that measure alone by the House of Lords would be appropriate, and whether he might consider recommending it to the House? It would also be important to understand the view of the Government in their response to this debate.

I turn to another matter that has arisen in the period between the publication and response to this report, which is the OECD Working Group on Bribery conclusions on the UK Government’s report on the follow-up to the phase 4 evaluation. The Government’s follow-up report was presented in March 2019, and the OECD gave its evaluation later that year. Many of the OECD recommendations have been fully or partially implemented, but there are several where no progress has been made, and where there is a read-across to the committee’s report.

There are two issues in the OECD report which are of particular concern. The working group welcomed the committee report’s recommendation that the Government should review the guidance to commercial organisations, but noted that

“no steps have yet been taken to address the Working Group’s Phase 4 recommendations in this respect”.

Those OECD recommendations in 2017 preceded the committee report that we are now considering. I would be grateful for the Government’s response to this matter, given the time that has elapsed.

The second issue relates to the independence of investigation and prosecution of foreign bribery and in particular the implementation and use of Shawcross exercises in foreign bribery cases. Taken alongside what noble Lords have previously talked about in terms of the European arrest warrant, could the Government say whether this matter has now been corrected or needs to be put right, and what deficiencies there are now in the system?

Finally, I turn to SMEs. The report outlines a number of recommendations on the approach to gifts and hospitality and on better guidance. The Government’s response to better guidance is that SMEs could find information on bribery on the Government’s web pages or by phoning a helpline. So they say that the information is there, if you want to look for it. But above all SMEs need to be aware of the issue, because you cannot look for things that you do not know exist. There is certainly room for a more systematic approach to awareness raising, and the Government as yet seem to have not taken the opportunity to take this forward. This is crucial if we are to encourage more and more companies to look for export opportunities across the globe.

Awareness-raising can follow a wide range of routes, but the Government need to address this matter urgently. The committee witness who said that you cannot take someone out to dinner without committing a crime exemplifies the need for a balanced and understood approach to these matters. As the report states, corporate hospitality is a necessary and legitimate part of doing business. The Government must do more to raise awareness of that balance—

[The Deputy Chairman of Committees (Baroness Henig) (Lab)]

My Lords, I reinforce the point that the time limit for speeches is six minutes.