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

Lord Saville of Newdigate Excerpts

Wednesday 3rd February 2021 Grand Committee

Moved by

[Lord Saville of Newdigate]

That the Grand Committee takes note of the Report from the Select Committee on the Bribery Act 2010 The Bribery Act 2010: post-legislative scrutiny (HL Paper 303, Session 2017–19).

[Lord Saville of Newdigate (CB) [V]]

My Lords, the report of the committee charged with post-legislative scrutiny of the Bribery Act 2010 was published almost two years ago. The delay in the report coming before this House was caused by general elections, Brexit and, to some extent at least, the Covid epidemic.

I start with the good news. In the view of the committee, a view shared among all our witnesses, the Act is an excellent piece of legislation, sweeping away many unsatisfactory features of the previous law and instead creating offences that are clear and all-embracing. In particular, the new offence of corporate failure to prevent bribery puts the onus on companies to conduct themselves in an ethical way and, where necessary, to take adequate steps to prevent persons associated with them from indulging in bribery. In light of this provision, the committee was not persuaded by the suggestion that companies should be made criminally vicariously responsible for bribery. The report is therefore mainly devoted to considering how the Act has operated in practice and whether improvements can be made to the way it is being implemented.

Time does not permit me to address all of the matters that we considered, but there are some that I would like to raise today. The first relates to deferred prosecution agreements, a novelty in English law. These are bargains between prosecutors and a company under which the prosecutor agrees not to proceed with a prosecution against the company for a fixed time in return for the company mending its ways and paying a financial penalty. DPAs were a creation not of the Bribery Act but of the Crime and Courts Act 2013. However, the Liaison Committee, when recommending the setting up of the bribery committee, specifically invited us to consider DPAs as they have affected the conduct of companies, both to prevent corrupt conduct and in the investigation of such conduct when it is suspected of having occurred.

DPAs apply to many economic crimes other than bribery, but it appears that their principal use to date has been in relation to corporate bribery. As your Lordships will see from the report, the committee considered that DPAs can perform, and have to date performed, a very useful function in combating corporate bribery. We were not persuaded, as some have suggested, that they provide an easy way out for rich companies, but not poor ones, to avoid prosecution. There are, however, three aspects that I want to stress.

The first is that we consider it vital that, unlike in other countries, DPAs continue to be subject to judicial control—in other words, only initiated after judicial scrutiny if the judge is satisfied that an agreement is likely to be in the interests of justice and that the proposed terms are fair, reasonable and proportionate, and sanctioned publicly by the court only if the judge is satisfied that the final terms do in fact satisfy these requirements. The second point is that DPAs must not be used as a means of avoiding the prosecution of the individuals actually responsible for the bribery in question. The third point relates to the financial penalty. Under the present law, the amount of the penalty should be broadly comparable to the fine that a court would have imposed on conviction following a guilty plea. In general terms, this results in a discount of one-third of the maximum that could be ordered. However, the discounts given in some DPAs in recent years have been as high as 50%.

I stress that the committee in no way considered that the judgments in these cases were wrong, as there was clearly ample justification for the greater discount. However, they were cases where the company had not self-reported the bribery. We took the view that self-reporting by companies should be encouraged and that, accordingly, a company that has not self-reported should normally receive a lesser discount than a company that has done so, whatever co-operation the company later provided. In their response to the report, the Government noted this recommendation but made no commitment towards encouraging self-reporting by companies. I, for one, hope that they will at least keep this matter under review as, at present, we see a risk that companies will consider that there will be little or no benefit to be gained from self-reporting.

On another topic, we were firmly of the view that there should be no exceptions to the offence of bribery in cases of so-called facilitation payments. These are, in general, small payments in cash or kind to bribe officials into properly performing their public duties rather than failing to do so or taking undue time. There is no doubt that there are some countries where officials are low paid in the expectation that they will add to their wages by this means. This state of affairs often puts the person asked for a bribe in a very difficult position. For example, a ship’s captain with a valuable perishable cargo on board risks losing it through delay if he does not sweeten the harbour-master to let him berth in due time, by giving him a bribe of cigarettes or whisky of miniscule value compared with that of the cargo. The committee is heartened by the fact that the Government have stated unequivocally that no exceptions should be made for facilitation or similar small bribes. It is noteworthy that some countries that did enact exceptions have now abolished them.

A good deal of the report is taken up with the question of educating people on the Bribery Act. We had quite a considerable body of evidence to the effect that people were either ignorant of its provisions or misunderstanding them. There is not sufficient time today to go into this question in detail, but for example, many seem to have had difficulty in distinguishing between unobjectionable corporate hospitality and attempts to gain an improper advantage. This is said, among other things, to have had an adverse effect on financial support through corporate hospitality for sporting activities.

On the general matter of guidance on the Bribery Act, we made a number of specific recommendations for improvement. As will be seen from the Government’s response to the report, we failed to persuade them to adopt or carry forward many of the suggestions that we made. However, we do urge the Government to ensure that these matters are best kept under constant review, especially in the case of SMEs seeking to open or enlarge their trade with other countries, a vital part of our economy. Greater knowledge and understanding of the Bribery Act can, in our view, only assist in combating corruption. Corruption is an evil that, if allowed to flourish, is extremely damaging to our society.

At the time of our report, we did not know what the Brexit outcome would be. Concerns were expressed about the possible effects on European co-operation, since there were many EU measures in force to support and enhance security and law enforcement, some of which were of particular importance in the investigation and prosecution of bribery offences, which often cross national borders. I have asked the Minister present today to give us an update on the position.

On a final note, I pay tribute to those who fashioned the Bribery Act. Faced with an extremely unsatisfactory state of affairs and a long history of less-than-successful attempts to remedy matters, they produced what I would describe as a model piece of legislation, bringing simplicity, clarity and certainty to an important part of our criminal law. I beg to move.

--- Later in debate ---

[Lord Saville of Newdigate (CB) [V]]

My Lords, during the course of the debate, a number of speakers raised the question of applying vicarious criminal liability to companies in cases of bribery. There are very strong views held on both sides of this question, but I simply draw attention, once again, to Section 7 of the Act, on the failure to prevent bribery. This avoids all questions of mens rea and other difficulties and provides, in my view, a ready means of catching out the company if it has failed properly to take adequate measures. If we apply that section to the ship captain who has lost his ship, then he would not get away with it if he had failed to take adequate measures to keep his ship seaworthy.

I take this opportunity to publicly thank the staff who worked for this committee. The advice and guidance of our clerk, Michael Collon, proved quite invaluable. We could not have been better served. I wish him a long and happy retirement. The same could be said—except that he is not retired—of Ben Taylor, our policy analyst. His historical and other research was of the highest quality. Alasdair Love and Rebecca Pickavance also formed part of the team, and we were all very impressed by the hard and good work that they did for us. I also thank Anne-Marie Ottaway, a solicitor with extensive knowledge of the working of the Bribery Act, whose assistance as our specialist adviser made an important contribution to our work. Finally, I thank the other members of the committee, all of whom played a vital part in our deliberations. It was a very great pleasure to work with such people.

Motion agreed.