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

Baroness Wheatcroft Excerpts

Wednesday 3rd February 2021 Grand Committee

[Baroness Wheatcroft (CB) [V]]

My Lords, it is a pleasure to follow the noble Baroness, Lady Fookes, who, after more than 50 years of continuous service in Parliament, is deserving of everyone’s attention when she speaks. I also thank the committee for its work in producing this report and the noble and learned Lord, Lord Saville of Newdigate, for his introduction to this afternoon’s proceedings. Given the believed scale of bribery on the international stage, either the Act is proving incredibly successful and, as the noble Lord, Lord Gold, said, frightening many companies into honesty, or bribery is going undetected.

As the report points out, bribery is a crime that is generally detected only when it goes wrong. I was therefore concerned by the comment in the report that suspicious activity reports have very little follow-up. Companies know when competitors seem to be enjoying disproportionate success: if they report suspicious activity, that report should be followed up. Will the Minister comment on how the follow-up of suspicious activity reports could be improved? If that were done, perhaps we would see more cases of bribery come to court.

The committee’s report was largely positive about the way the Bribery Act is working. It welcomed the refusal to allow facilitation payments, and I concede that while this can disadvantage British business in many markets, it is impossible to be, as the noble and learned Lord, Lord Mackay, once said, “a little bit pregnant”. Facilitation payments are bribery, however common they may be in some countries, so this country is right to rule out bribery of any kind—unlike the United States, for instance. I also agree with the committee’s endorsement of deferred prosecution agreements. It seems that these are proving effective in persuading companies to own up to partial failings and improve standards for the future, while not preventing prosecution of individuals.

The aspect of this report on which I shall concentrate my remaining remarks is that of vicarious liability for companies. The noble Baroness, Lady Bowles, was eloquent in her criticism of the way prosecutions for bribery have hit the small business sector rather than the large. The issue is that of the identification principle: that the controlling minds of the company do not have mens rea. I listened with interest to the noble Lord, Lord Stunell, as he drew his analogy with a captain escaping all liability as his ship went down. I share his discomfort with this situation.

The committee made no recommendation on the issue of vicarious liability, but neither did it rule it out. It was looking towards the report of the committee the Government had already established to examine corporate liability for economic crime. Indeed, when the Government published their response to this Select Committee report, in May 2019, they said that the issue of vicarious responsibility was under review, and their response would be issued “shortly”. That was in May 2019. “Shortly”, turned out to be 18 months later and, after such lengthy deliberation, the Government concluded that the call for evidence on corporate criminal liability was inconclusive. They therefore proposed to ask the Law Commission to examine the issue and report on the options by late 2021. By any standards, this looks like kicking a difficult issue into the long grass.

However, the evidence was not in everyone’s view inconclusive. Three-quarters of respondents to the call for evidence agreed that the identification doctrine inhibited holding companies to account for all economic crimes. The noble Lord, Lord German, called, earlier this afternoon, for a new Select Committee report into vicarious liability—I would be very interested to hear the Minister’s response to that. I would also like to hear his view on why there has been such reluctance to address the issue of vicarious liability, when it is quite clear that larger companies are not being held to account in the way that smaller companies are, because the people at the top are able to dodge the issue.

Finally, I raise again, as have others, the issue of the Government’s anti-corruption champion. This is not, by any standards, a high-profile position. Will the Minister tell the Committee whether the current incumbent, John Penrose MP, needs greater powers if he is to be an effective champion of anti-corruption, both in government and in business, as his job description says?