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

Lord Thomas of Gresford Excerpts

Wednesday 3rd February 2021 Grand Committee

[Lord Thomas of Gresford (LD) [V]]

My Lords, as a member of the committee, I, too, pay tribute to the careful chairmanship of the noble and learned Lord, Lord Saville, and I thank Michael Collon and his staff and the expert advisers for all the hard work they put in.

Bribery is an offence which occurs in the shadows. It is a transaction which brings advantages to both parties, neither of whom can complain, whether satisfied or dissatisfied with the corrupt bargain. Its detection may well depend on a chance: an auditor stumbling on it in the course of an audit, a report from a whistleblower, or a complaint from a competitor. Nevertheless, like all corruption, it can be highly corrosive and potentially damaging. Even when the active agents are identified, the individual in the higher echelons of a corporate body who authorised or turned a blind eye to what was going on may still be too hard to pursue. Hence, it is justifiable to introduce the concept of corporate criminal responsibility, although the company itself is a legal person which can neither speak nor hear, much less form an intention.

I was involved in the pre-legislative committee prior to the passing of the Bribery Act in 2010. The policy which emerged was to create a climate in corporate business which would lead to the elimination of bribery altogether. One way of doing that would be, as my noble friend Lord Stunell argued, to make a corporate body vicariously liable for crimes committed by its employees or agents. But it could not be right to criminalise a company with absolute liability, and therefore there would have to be a right to a statutory defence—for example, that the company had taken all reasonable steps to prevent bribery and, once its existence were known, had not covered it up.

Of course, if there is sufficient evidence that the director or manager of a company—the captain on the bridge of the sinking ship—was complicit in bribery, “wilfully blind”, as my noble friend Lord Stunell said, or if he covered it up, he will be charged accordingly under Sections 1, 2 or 6 of the Act or with conspiracy.

For corporate criminal responsibility, however, it was thought preferable not to introduce vicarious criminal responsibility but to encourage a company to put in place systems of training and supervision and to frame the criminal offence as “failure to prevent bribery”. Thus, the company is not prosecuted and convicted vicariously for the bribery which its agent has committed. As an inanimate legal person, the company can have no knowledge of the offence, nor can the company be convicted positively of failing to have adequate procedures in place, whether or not bribery has been proved. An offence delineated in those terms would put the onus on the prosecution to prove that the company did not have adequate procedures.

Under Section 7 of the Act, the burden of proof is where it ought to be. If bribery has taken place on behalf of a company, the onus under Section 7 is on the company to show, as a defence to the charge that it failed to prevent it, that it had adequate procedures to prevent bribery in place. My noble friend Lady Bowles was concerned that the phrase “adequate procedures” is too low a bar for a defendant company to surmount. However, I am happy that the decision as to what is adequate is one for the jury, which imports the standards of the ordinary citizen, not the standards of the City.

The investigation carried out by the committee demonstrated that the architecture of the Bribery Act has been well conceived—a tribute to the noble Lord, Lord Bach, in fathering it, and to my noble friend Lord McNally in acting as its midwife. Its definition of what constitutes bribery and its use of the defence of adequate procedures are well received and applauded internationally. It is regarded as the gold standard. No significant legislative changes have been recommended.

Where concerns are expressed in the report, they refer to advice, delay in investigation, and resources. Guidance could be improved in important areas, such as facilitation payments. But the idea that the Government should set up an advice bureau to authorise the conduct of an individual or a company before a transaction takes place was rightly rejected by the committee. Nevertheless, consular services to advise on overseas trade customs and norms should be strengthened, as the noble Baroness, Lady Fookes, emphasised.

An unintended consequence of the Act was that corporate sponsoring of events took a hit: sporting and musical events in particular. It is a matter of balance and common sense, as both the noble Lord, Lord Gold, and the noble and learned Lord, Lord Morris, noted, which defies statutory definition. However, the committee concluded that guidance could be improved by the inclusion of examples to illustrate what is or is not acceptable. I am sure that that would be helpful.

On investigations, the report points to the fact that only 12 out of 45 police forces had taken advantage of specialist training in the Bribery Act, and it recommended that a senior specialist investigator trained in the provisions of the Act should be employed in each of the 45 forces. As my noble friend Lord Bradshaw said, training is a long-term commitment. Can the Minister tell us whether this recommendation has as yet been taken up?

When guilt in a case against a corporate body depends on whether it has employed adequate procedures, the field to be covered will be much larger than establishing the mere fact of an incident of bribery. The report calls for investment in artificial intelligence, document sifting and similar modern technologies which can handle what have been in some of the cases millions of documents. Like my noble friend Lord German, I would welcome the Minister’s report on the Government’s up-to-date position on greater investment in these areas.

DPAs have been a success under strict judicial control. However, I underline the one concern of the noble and learned Lord, Lord Saville. In all criminal proceedings, lesser sentences encourage pleas of guilty; defence counsel always brings this to the attention of a defendant at the earliest moment. Self-reporting should similarly lead to similar discounts otherwise there is no benefit in self-reporting. I do not propose to debate whether the concerns expressed about co-operation in criminal investigations with the EU after Brexit have been met by the trade and security agreement, save to say that they manifestly have not. But that is surely for another day.

I hope that the work of the committee and the report it has produced has given direction to the investigators and prosecutors of bribery. I hope it also gives confidence to the business community that there is in place an effective weapon against bribery, and that it has encouraged the climate of honest and successful business that was intended without being too onerous a burden of time and cost, despite the many naysayers, to whom the noble and learned Lord, Lord Hope, and my noble friend Lord McNally referred. My noble friend Lord Bradshaw referred to the UK slipping down the league table, and money laundering is a real issue. However, in the field of bribery, this Act has served to uphold our reputation for fair dealing across the world and, as the noble and learned Lord, Lord Hope, said, without commercial disadvantage.