3 The Bill
- the options
64. In the light of all the many criticisms and suggestions
that have been made, we have to consider whether the best way
forward is to retain the present structure of the Bill based on
the Law Commission Report with some amendments or look for a different
approach which avoids the criticisms which have been made of the
65. The central problems with the present Bill appear
meaning and scope of corruption for the purposes of the criminal
there should be specific or broad offences
producing offences which cover both the public and private sectors
has created artificial definitions which meet neither situation
66. The first question is to analyse what the law
is trying to do. What is the conduct which the offence of corruption
is seeking to deter or to punish? Is it the betrayal of
the duty of loyalty which is owed by the agent to his principal
or by the employee to his employer? Is corruption to cover only
that or does it go wider? Is it the undermining of the efficiency
of and trust in public administration and, in the private sector,
an attack on fair dealing and proper behaviour? These two approaches
are not necessarily mutually exclusive. The proponents of the
Bill have proceeded on the basis that it is disloyalty which is
the essence of the offence and that that alone should be covered.
67. The draft Bill contains this definition of corruption:
Conferring an advantage: meaning of corruptly
1) A person (C) who confers an advantage, or
offers or agrees to confer an advantage, does so corruptly if
a) He intends a person (A) to do an act or make an
omission in performing functions as an agent of another person
(B) or as an agent or the public;
b) He believes that if A did the act or made the
omission it would be primarily in return for the conferring of
the advantage (or the advantage when conferred), whoever obtains
c) The exception provided by section 6 does not apply;
d) The exception provided by section 7 does not apply.
2) A person (C) who confers an advantage, or
offers or agrees to confer an advantage, does so corruptly if
a) He knows or believes that a person (A) has done
an act or made an omission in performing functions as an agent
of another person (B) or as an agent for the public;
b) He knows or believes that A has done the act or
made the omission primarily in order to secure that a person confers
an advantage (whoever obtains it);
c) He intends A to regard the advantage (or the advantage
when conferred) as conferred primarily in return for the act or
d) The exception provided by section 6 does not apply;
e) The exception provided by section 7 does not apply.
3) For the purposes of subsection (1) the nature
of the intended act or omission, and the time it is intended to
be done or made, need not be known when the advantage is conferred
or the offer or agreement is made.
68. The Committee proceeded to consider whether the
problems with the Bill and the definition of corruption could
be solved by minor modification; whether a different analysis
was needed; or whether a whole new structure for the Bill was
necessary. These three options are examined below.
1: Modifying the Bill
69. The Committee considered whether the Bill would
be improved by the addition of 'dishonesty' or 'dishonestly' in
the offence. If, however, the offence is based on a breach of
loyalty there are arguments against using these words. 'Dishonesty'
may not be the same as corruption. The courts have avoided giving
a precise definition of 'dishonesty' saying that ordinary men
and women know what it means. Yet the Committee believe that the
offence does need to express some element of immoral or improper
behaviour. Nothing can convey this as well as 'dishonest' but
we accept the difficulties of relying on the word. We note that
the Law Commission has undertaken a review of the law of fraud.
Introduction of a bribery offence of which dishonesty is an element
will involve a very considerable overlap with the common law offence
of conspiracy to defraud and should perhaps best be considered
alongside other offences of dishonesty.
70. Another suggestion made is that the word 'undue'
should be added. This word appears to have a technical meaning
in civil law, but to introduce the phrase 'undue advantage' may
raise more questions than it answers. We believe that juries would
better understand the concept if the word 'improper' appears before
'advantage'. On the other hand we consider that an 'advantage
to which a person is not entitled' would be an alternative formulation
to 'improper advantage'.
71. We do not believe that the use of the word 'primarily'
adequately meets the concerns about the unqualified use of the
word 'advantage'. It does not clearly express the concept of improper
or immoral even if it puts emphasis on the necessary intention.
While we accept that many other countries have included the OECD
wording of 'bribery of a foreign public official' we think there
is some force in the Home Office view that the draft Bill adequately
covers this point.
72. While accepting the advantages for prosecutors
of having broadly-based offences, we do not believe this excludes
having in addition some specific offences. It would be up to the
prosecutors to choose which offence would be most appropriate
for the circumstances. People involved in corruption may currently
be pursued for a variety of offences. Although this might add
to the complexity of the law, specific offences will also be more
73. At first glance the blurring of the distinction
between the public and private sectors in economic life would
support the combining of the old statutory offence into new ones
which apply across all sectors. This is the approach the Law Commission
took in 1998. This leads however to the awkwardness of using the
agent/principal relationship in the public sector and the defence
of consent of the principal applying only in the private sector.
Another approach would have been to produce offences some of which
might apply in both the public and private sectors and others
which were specific to only one sector.
74. The Crown Prosecution Service drew our attention
to doubts about the meaning of 'functions' in the Bill.
The Home Office has told us that this word is widely used across
the statute book and recently in the Human Rights Act 1998. Mr
Justice Silber set out the case for replacing the word 'functions'
This would be a return to the wording originally proposed by the
Law Commission in 1997 but changed in their 1998 draft Bill. We
also note the willingness of the Attorney General to express the
offence in terms of breach of duty.
75. We considered whether the Bill could be made
clearer by re-casting its various Clauses and provisions and Mr
Justice Silber in his latest submission sets out a way in which
this could be done by including the relevant words of Clause 5
in the earlier Clauses.
But the Home Office states that such a change would have to be
reflected throughout the early part of the Bill and would substantially
lengthen it. And in our view we would after all these changes
still be left with a Bill lacking in clarity. This kind of redraft
is not therefore the way forward.
76. Is it however right or sufficient to look only
at the loyalty of the agent to the principal? We are persuaded
that this approach is too narrow. There could well be cases where
the giving of a secret or underhand advantage to the prejudice
of competitors or members of the public is corrupt in the eyes
of the ordinary public. The head of a company who bribes another
not to bid for a contract would be guilty of an offence even though
no agent were involved. Lord Falconer and the representatives
of the CBI
took the view that these cases were already covered by appropriate
parts of anti-competition law, and that this was sufficient regulation.
The Enterprise Act 2002, which came into force on 20 June 2003,
introduces criminal penalties for individuals who dishonestly
engage in the worst types of cartels such as horizontal price
fixing, limiting supply or production, market sharing or bid-rigging.
We are not satisfied that this is sufficient and we consider that
there should be legislation dealing with this type of corruption.
77. We have also considered adding separate specific
offences to the Bill such as:
explicit the liability of UK companies for the actions of foreign
subsidiaries and agents
a separate offence of trading in influence
misconduct in public office a statutory offence (with a wider
definition of public office).
78. We are not persuaded that UK companies
should be made explicitly liable for the actions of non-resident
foreign subsidiaries and agents because the individuals - in many
cases nationals of the countries concerned - will be subject to
national law in that jurisdiction.
79. The case for a separate offence of
trading in influence is not, in our view, convincing.
80. The draft Bill does not seem to us
the appropriate vehicle for giving a statutory definition of misconduct
in public office.
81. Our overall conclusion, however, is
that by adopting only the agent/principal approach the Bill does
not proceed on the right basis and that corrupt acts outside that
relationship ought to be included in the Bill.
2: An alternative analysis of the harm in corruption
82. As we have said, the essence of the offence in
the draft Bill is the breach of loyalty owed by an agent to his
principal. Another approach is to look at the harm corruption
does to public administration or the efficient operation of the
economy. Taking such a different approach could solve many of
the problems which have been identified in the evidence we have
received. A full explanation of this alternative is set out in
the opinion given by our specialist adviser, Peter Alldridge.
In the introduction to the draft Bill, Lord Falconer wrote:
"Corruption is potentially devastating. If it
is not kept in check, it has the potential to cause serious damage
to government and business - indeed to every aspect of economic
and social life. We need to be constantly on our guard against
corruption - it is a complex crime, by its nature very insidious
and its effects stretch across international borders. Corruption
world-wide weakens democracy, harms economies, impedes sustainable
development and can undermine respect for human rights by supporting
corrupt governments, with widespread destabilising consequences".
83. The alternative approach identifies serious consequential
harm in bribery as having greater significance than disloyalty.
A Bill based on the harm done to the system would make it an offence
to confer or receive a benefit with the intention of corrupting
or frustrating the proper functioning of government and public
services or with the intention of corrupting or frustrating the
proper functioning of a regulated market. An offence along these
lines was contemplated by Mr Justice Silber.
As against the draft Bill the advantages of this model are:
· it is
no longer necessary that the consent of the principal be a defence
vice is clear, because now "corrupting" is used as a
transitive verb. The reader knows that the statute is intended
to prevent corruption: (i) of government (ii) of markets. Clearer
identification of the vice will enable judges to sentence more
rationally and consistently;
adoption of extra-territorial liability is in principle easier
to justify. The criminal law of England and Wales has far greater
cause to be concerned with proper operation of the organs of government
and markets than with the loyalty of individual public servants.
84. This is an interesting way of looking at corruption
in terms of its legal and economic impact. It makes a stimulating
contrast to the more conventional approaches to the criminal law.
Yet we have received no evidence from those who would be affected
by the new law which would support such a radical departure at
this stage. We therefore have used this analysis as a means of
comparison with the approach in the Bill and as an indication
that a wider approach should be adopted.
3: An alternative structure to the Bill
85. As has been seen, much of the concern of our
witnesses has centred around the decision to draft the Bill on
the agent/principal model. Experienced lawyers and professionals
in the anti-corruption field expressed doubt as to whether the
new legislation would be intelligible to juries - or indeed to
companies and individuals who wanted to be clear that they were
acting within the law. The definition of 'corruptly' given in
Clause 5 caused particular concern, and we too found it to be
86. The defences in Clauses 6 and 7 are not clear.
Their inclusion is a consequence of the reliance on the agent/principal
relationship. If the Bill is based on a breach of loyalty, then
the consent of the principal must be a defence. But we still believe
that these two Clauses are very complex and hard to understand.
It seems to the Committee that in a private sector case, even
if the employer consents to his purchasing agent accepting bribes
from contractors, this is dishonest, immoral and done to get an
unfair advantage at the expense of competitors and /or the public,
and there is a strong argument for saying it should be categorised
as criminal. We note that there is a case for specifying that
the belief in the principal's consent should be genuine or reasonable
but this was not accepted by the Home Office (see paragraph 31).
87. Finally, as we have indicated, the agent/principal
model fails to cover corruption which takes place between two
principals. It is as corrupt for one owner of a firm to give money
to an owner of another firm to persuade him not to tender for
a particular contract, as it is to give money to the buyer to
recommend a particular seller to his principal. The former example
would fall outside the offences created by the draft Bill since
the two firm owners are not necessarily agents. Moreover, as Lord
Falconer pointed out, where the enterprise is incorporated, the
owner of the company may be its agent.
88. These problems with the agent/principal model
go to the heart of the Bill. The culpable mental state in Clause
5 is directed against the breach of the agent/principal relationship.
But the agent/principal relationship is defined so widely in Clause
11 that almost any legal relationship giving rise to duties and
functions will be an agent/principal relationship. Where there
is a civil law duty, there will be a principal-agent relationship.
It is better to rely on the element of duty rather than the principal-agent
89. The Committee has therefore concluded
that the only way to address the problems which are inherent in
the Bill (which arise from agent/principal model) is to move away
from the definition of 'corruptly' in Clause 5.
90. For this purpose it is valuable to see how corruption
is defined in different legal systems across the world. Some of
the legal provisions relate specifically to the bribery of a foreign
public official but it may be that a similar definition would
apply equally to domestic public sector corruption.
"It is a criminal offence
. for any person
intentionally to offer, promise or give any undue pecuniary or
other advantage, whether directly or through intermediaries, to
[a foreign] public official
. in order that the official
act or refrain from acting in relation to the performance of official
duties, in order to obtain or retain business or other improper
advantage in the conduct of international business".
"Corruptly" means in contravention of or
against the spirit of any law, provision, rule, procedure, process,
system, policy, practice, directive, order or any other term or
condition pertaining to:
a) any employment relationship;
b) any sporting event;
c) any agreement; or
d) the performance of any function in whatever capacity.
A person is guilty of an offence if the person:
a) provides a benefit to another person; or
a benefit to be provided to another person; or
c) offers to provide or promises to provide a benefit
to another person; or
d) causes the offer of a provision of a benefit,
or the promise of the provision of a benefit, to be made to another
e) The benefit is not legitimately due to the other
f) The first-mentioned person does so with the intention
of influencing [a foreign] public official (who may be the other
person) in the exercise of the official's duties as [a foreign]
public official in order to:
i. obtain or retain business; or
ii. obtain or retain a business advantage that
is not legitimately due to the recipient, or intended recipient,
of the business advantage (who may be the first-mentioned person).
"Every person commits an offence who, in order
to obtain or retain an advantage in the course of business, directly
or indirectly gives, offers or agrees to give or offer a loan,
reward, advantage or benefit of any kind to [a foreign] public
official or to any person for the benefit of [a foreign] public
official as a consideration for an act or omission by the official
in connection with the performance of the official's duties or
functions; or to induce the official to use his or her position
to influence any acts or decisions of the foreign state or public
international organisation for which the official performs duties
or functions." 
"Anyone who offers, promises or grants an undue
advantage to a person acting for [a foreign] state or an international
organisation, as a member of a judicial or other authority, a
civil servant, expert, translator, or interpreter employed by
an authority, or an arbitrator or military person, for that person
or for another, for him to act or not to act in his official capacity,
contrary to his duties, or using his discretionary powers, will
be punished by five years of imprisonment."
Council of Europe
"For the purpose of this Convention, 'corruption'
means requesting, offering, giving or accepting, directly or indirectly,
a bribe or any other undue advantage or prospect thereof, which
distorts the proper performance of any duty or behaviour required
of the recipient of the bribe, the undue advantage or the prospect
"When committed intentionally, the promising,
offering or giving by any person, directly or indirectly, of any
undue advantage to any of its public officials, for himself or
herself or for anyone else, for him or her to act or refrain from
acting in the exercise of his or her functions".
"When committed intentionally, the request or
receipt by any of its public officials, directly or indirectly,
of any undue advantage, for himself or herself or for anyone else,
or the acceptance of an offer or a promise of such an advantage,
to act or refrain from acting in the exercise of his or her functions".
"The promising, offering or giving, directly
or indirectly, of any undue advantage to any persons who direct
or work for, in any capacity, private sector entities, for themselves
or for anyone else, for them to act, or refrain from acting, in
breach of their duties".
" 'Corruption' means -
an offence under any of the provisions of sections
39 to 44, 46 and 47;
39.(1) This section applies with respect to a benefit
that is an inducement or reward for, or otherwise on account of,
an agent -
a) doing or not doing something in relation to the
affairs or business of the agent's principal; or
b) showing or not showing favour or disfavour to
anything, including to any person or proposal, in relation to
the affairs or business of the agent's principal
40.(2) A person is guilty of an offence if the person
a) receives or solicits, or agrees to receive or
solicit, a benefit to which this section applies if the person
intends the benefit to be a secret from the person being advised;
b) gives or offers, or agrees to give or offer, a
benefit to which this section applies if the person intends the
benefit to be a secret from the person being advised
e) embezzlement or misappropriation of public funds;
f) abuse of office;
g) breach of trust;
h) an offence involving dishonesty - in connection
with any tax, rate or impost levied under any Act; or under any
written law relating to the elections of persons to public office".
91. The World Bank refers to the classic definition
of corruption as " the exercise of public power for private
The Asian Development Bank uses the phrase "the abuse of
public or private office for personal gain".
92. The diversity of these definitions illustrates
how difficult it is to arrive at an agreed definition of corruption.
Some definitions rely on a single, general, overarching offence:
others rely on a number of specific offences. Having
examined all these different models, we consider that (leaving
aside related offences) the essence of corruption could be expressed
in the following terms:
A person acts corruptly if he gives, offers or agrees to give
an improper advantage with the intention of influencing the recipient
in the performance of his duties or functions;
A person acts corruptly if he receives, asks for or agrees
to receive an improper advantage with the intention that it will
influence him in the performance of his duties or functions.
93. As we have already indicated, it could
be possible to substitute for 'improper advantage' the words 'advantage
to which a person is not legally entitled'.
94. It might be helpful to give some examples of
how our definition might work in practice. To take a simple example
from the private sector, it is corrupt to give a bribe to a buyer
to persuade him to buy his supplies from one company rather than
from another: and in the public sector it is corrupt to give a
bribe to someone involved in a local planning authority so as
to obtain planning permission which the giver would otherwise
be unlikely to obtain. From the receiver's point of view it is
corrupt to receive the bribe knowing of the giver's intention
and acting accordingly.
95. The advantages of having a clear and simple definition
of corruption such as this are as follows:
is no need for the agent/principal relationship and the obscurity
and complexity it brings;
definition applies equally to the public and private sectors;
between principals is covered;
· It leaves
open the question of whether further, specific offences could
be created, or whether a single, general offence of corruption
the Bill be restructured if the new definition were adopted?
96. If a definition such as the one proposed above
were used instead of the definition given at Clause 5 of the current
Bill, it follows that all references in the draft Bill to agents
and principals would fall from the Bill. Thus the first two Clauses
would remain broadly as they are and Clause 3 would no longer
be necessary as a separate offence. Clause 5 would be replaced
with a new Clause containing the new definition. These three Clauses
would form the heart of the new Bill and Clauses 6, 7 and 10 would
97. In addition, it would be possible to implement
some of the suggestions given in paragraphs 69 to 81 above (under
"Modifying the Bill"). In particular, it would be right
to consider whether to add the text of Article 1 of the OECD convention,
appropriately modified, for 'bribery of foreign public official',
and whether to replace 'functions' with 'functions and duties'
98. In the light of the criticisms which
have been made of it, we do not consider that the draft Bill should
be left as it stands on the essential issue.
The choice is between modifying the Bill by trying to improve
it marginally (by, for instance, making clear that the offences
created include an element of moral turpitude) and restructuring
the Bill on a new definition of corruption. We conclude
that the Bill would still be obscure and unsatisfactory if the
offences remain based on the concept of agency.
On the other hand we can adopt a completely different approach
which concentrates not on breach of the duty of loyalty which
an agent owes to his principal but on the giving or receipt of
an improper advantage in secret and underhand dealing to the prejudice
of the interests of competitors or the public. This alternative
course is, we believe, the right one.
99. We believe that a Bill centred on a
simple definition such as ours would be clearer and would work
better. We also believe it would be more likely to receive general
100. We consider that this approach would equally
apply to the bribery of a foreign public official. The Home Office
may wish to consider whether one broad offence is in itself sufficient
or, as in many other jurisdictions, it should be supported by
certain specific offences such as bribing a foreign public official.
100 Law Commission Report no 276 Back
Ev 75 para 14 Back
Ev 17 DCB 15 para 1.1 Back
Ev 170 DCB 33 Back
Ev 170 Back
Q487 (Lord Falconer) and Q752 (Mr Berkeley) Back
Annex 4 Back
Q657 Ev 171 Back
Convention on Combating Bribery of Foreign Public Officials in
International Business Transactions (1997) Article 1 Back
Prevention of Corruption Bill 2002 Clause 1 (iv) Back
Chapter 4, Division 70 of the Criminal Code Back
Title 19, Article 322 of the Penal Code Back
Council of Europe Civil Law Convention (1999) Article 2 Back
Council of Europe Criminal Law Convention (1999) Article 2 Back
Council of Europe Criminal Law Convention Article 3 Back
Council of Europe Criminal Law Convention Article 7 Back
Anti-Corruption and Economic Crimes Act 2003 Section 2 Back
World Development Report 2002 p 101 Back
Cited in 'Turning a Blind Eye - Corruption and the UK Exports
Credit Guarantee Department' June 2003 p 17 Back