Joint Committee on The Draft Corruption Bill Minutes of Evidence


Examination of Witnesses (Questions 520-538)

LORD FALCONER OF THOROTON QC, MR PAUL STEPHENSON AND MS MICHELLE DYSON

4 JUNE 2003

  Q520  Chairman: The question that people will be asking is, have you changed the legislation in order to bring in things which were okay before or to exclude things that were banned before?

  Lord Falconer of Thoroton: Yes, and I am trying to say that we are trying to make it clear what is caught and what is not.

  Q521  Lord Campbell-Savours: George Staple, the former Director of the Serious Fraud Office from 1992 to 1997, said that he had considered whether the proposed definitions would be readily understood by police prosecutors, juries and the public, and that that extending the concept of principal and agents to so many different relationships, particularly that between the public official and the public at large, was likely to cause confusion and uncertainty and might result in a reluctance to prosecute cases, where under the existing law prosecutors would want it to be justified, and then we have comments from the Director of Public Prosecutions who told the Committee that the relationship would be a difficult concept for juries if there were people whose activity straddled the public and private sectors, and then we had evidence from the CBI where they said that according to the new corruption offence it should be clear in scope and capable of being readily understood by all business people. "We consider that the present wording of the draft Bill does not satisfy these tests. We do not understand the proposed distinction between public and private activities and companies will not know into which category some or all of their activities might fall". We have had a stream of evidence given to the Committee by people, all of whom are affected, to say that they simply would not be able to work with or understand this legislation, and yet you say that you have given us a list at the back of questions and answers for jurors and that is sufficient. They say they cannot understand it.

  Lord Falconer of Thoroton: Then obviously we have to consider very carefully both what they say and what this Committee says at the end. I am genuinely saying that one is open-minded. Just take George Staple's criticism. What we are saying in the Bill, and we believe we have said it as economically as we can, is that where the public official makes his decision as a public official, primarily on the basis of the benefit bestowed on him rather than the basis of public duty, and that is the intention of the person giving him that benefit, then that is corrupt. I keep coming back to the example of the licensing official: did he do it because of the free drinks or did he do it because it was the right thing to do, having regard to licensing? At the moment, if we have captured that concept, it is not difficult and it is straightforward. George Staple in his document I do not think is saying that that is the wrong concept as far as public officials are concerned. Can we express it better? Can it be made clearer? Is there a concept that the Committee would prefer to have than the one that we are putting forward?

  Q522  Lord Campbell-Savours: He says, "I have concluded that the way in which the proposed legislation is drafted will not, without considerable study, be readily understood by any of those groups". All these people are pointing to a different approach. Why can the Department not go back to square one and perhaps reconsider its whole approach?

  Lord Falconer of Thoroton: The three approaches are: have a Bill without a definition of "corruptly" and leave it to the good sense of the jury. We think there are problems with that because you do not get clarification and codification. Do the South African model, 23 separate offences. That is certainly not simple. Mr Staple would be bringing in a whole different number of directions if he produced the South African model with all those offences; or, thirdly, do what we have tried to do.

  Q523  Lord Waddington: With respect, that is not correct. There is a fourth alternative which we have already canvassed, and that is to define "corruption" in relation to breach of duty, dishonesty, moral turpitude or anything you like, but at least point out when it is doing something wrong. If you do not do that then you land in the absurdity which has already been conceded in this Committee that if I pay a baggage handler at Heathrow ten pounds to try and extract my baggage from the mess of all the other baggage, I will be committing an offence under this Bill and he will be committing an offence.

  Lord Falconer of Thoroton: But all if the alternatives that have been put are being put on the basis where you say it should be undue payment or a payment made dishonestly, something like that, that in effect is saying, leave it again to the good sense of the jury.

  Q524  Chairman: The question of adding a word like "improperly" or "dishonestly" is one thing. The other question, it seems to me, is also important to try and outline and I would like to put to you again, and that is the retention of the principal/agent concept. One question which has been asked, the answer to which ought to be obvious, is this. Is it corrupt within the meaning of this new Bill if the head of one company gives some money to another to say that he is not to compete in a contract? Would that be corrupt because there is no agent intervening?

  Lord Falconer of Thoroton: If the position were that the chief executive, contrary to the interests of his company, was not acting within the ambit of his authority, then he would be the agent. The principal would be his company and his company would be the victim, but if in Paul's example it was plainly a case where both companies took the view that it was in their interests for company B to get five million quid for company A to bid then he would not be.

  Chairman: You have to go and there are a couple of things I would like to raise before you do. The Government's approach to other offences is obviously something with which we have been concerned.

  Q525  Mr Stinchcombe: Certain people have suggested that we ought to re-insert "trading in influence" as an offence. I just wonder whether it is not there because you believe it should not be there or it is not there because you believe it is already covered by Clauses 1, 2 or 3.

  Lord Falconer of Thoroton: We believe it would be caught by clauses 1, 2 or 3. [2]

  Q526  Lord Bernstein of Craigweil: The CBI were concerned that small facilitation payments which they make in the course of business, particularly overseas, would be caught by this Act. They quoted an example, I think, of the United States where there is an exemption for certain small payments, and they ask that, if it is not going into the Bill will the Government, during the course of parliamentary proceedings, give some guide on what they regard as proper in these circumstances?

  Lord Falconer of Thoroton: When the 2001 Anti-Terrorism Crime and Security Bill was going through, which has the extra-territorial bits of this Bill, we in effect gave an indication that small facilitation payments extracted by foreign officials in countries where this is normal practice would not of themselves give rise to a prosecution in the United Kingdom and we would be happy, when this Bill, in whatever form it comes, was going through Parliament again, to give a similar assurance.

  Q527  Lord Carlisle of Bucklow: That means there must be some sieve.

  Lord Falconer of Thoroton: Yes.

  Q528  Lord Carlisle of Bucklow: Whether it is the Attorney General or the DPP because otherwise the assurance cannot be guaranteed, can it?

  Lord Falconer of Thoroton: Having given that assurance, if the prosecution applies on consent, as it does at the moment, to the Attorney General, then he would be able to measure that against the assurances being given in Parliament.

  Q529  Lord Carlisle of Bucklow: It makes the case for an incentive.

  Lord Falconer of Thoroton: I agree.

  Q530  Mr Stinchcombe: You have indicated, and I think you must be right, that there is no lacuna in this Bill through the absence of trading in influence, but the Bill does not cover, does it, misuse of public office?

  Lord Falconer of Thoroton: If you are misusing your public office in, for example, giving licences in exchange for free drinks, that would be covered. I am not quite sure what would be misuse. If you are a very bad public official simply delivering a poor service—

  Q531  Mr Stinchcombe: I will give you an example. We have mentioned planning gain before. Say a developer proposed a thousand houses in the green belt, which is ordinarily contrary to planning policy, but he offers the council a very disproportionate public planning gain as a very nice sweetener, for example, a new sports centre, it would be improper ordinarily, applying proper planning principles, for that planning permission to be granted, subject to any section 106 obligation, would that be misusing the public office if either the Council or the relevant officer is persuaded to grant planning permission notwithstanding?

  Lord Falconer of Thoroton: You would have to look at the facts, but if it was a genuine exercise by the planning officer of what he bona fide believes is in the interests of the public, ie, "I have got to balance the amount of planning gain I am getting against other planning considerations", and he decides in the interests of the public that, even though it might infringe this or that planning policy, getting this huge benefit, a new road, a new playground, a new swimming pool, nevertheless means that the balance there is in favour of the public, that would not be—

  Q532  Mr Stinchcombe: If it were completely on offer as a matter of planning circumstances I could say as a former planning barrister that in those circumstances it would not be judicially reviewable and would be possible, but the question is not as a matter of the public law whether those sanctions exist. The question is whether as a matter of criminal law there should be a prohibition against the temptation improperly to exercise public functions in the discharge of your statutory powers or duties.

  Lord Falconer of Thoroton: In the example given assume that the facts are that the planning officer, whatever the planning considerations, bona fide believes it is in the interests of the community, even though subsequently it transpires that it is so off the page in planning terms that it is judicially reviewable. We would not envisage that that was the sort of thing that one would envisage as being corrupt.

  Q533  Baroness Scott of Needham Market: We said we would return to this question and it is really about the agent/principal again. Looking at Clause 7, in which the consent of the principal is a defence to a charge under the Bill, so let us say, for example, that person A is a buyer who takes small bribes from suppliers, and their employer is happy with that because the amounts involved are small and it means that he will get away with paying her less and it does not make a lot of difference to anyone, except perhaps that the company to whom the contracts are not placed are significantly disadvantaged and perhaps go bust as a result of that. Under this Bill there would be no corruption offence because A and B are happy with the arrangement.

  Lord Falconer of Thoroton: You are absolutely right. That is talking about only the private sector. It is nothing to do with the public. That is the position under this Bill because the essence of the Bill is saying that where you owe a duty to your employer in the example given, if you breach that duty in a corrupt way then you should be prosecuted, but where, in the example given by you, I could take advantage of the fact that my employer gets a bit of a trickle of money from contractors, then there is no breaking of trust in effect. It is an arrangement that suits both parties. To say, "What about those who do not get the contract?", well, there is freedom of contract. The employer knows perfectly well with whom he is placing a contract and on what basis.

  Q534  Baroness Scott of Needham Market: That is fine, but you have actually said yourself that corruption worldwide weakens democracies, harms economies and inhibits stable development, etc, so you yourself place quite a lot of emphasis on the level playing field aspect of corruption rather than necessarily breach of trust, so I am just not sure whether what is in the Bill here actually reflects what you have said.

  Lord Falconer of Thoroton: I think it does. You have got to strike a balance, have you not, between on the one hand making sure that there is proper transparency in business and not the corrupting of agents, and on the other making sure that you do not unrealistically interfere with the people with whom people can enter into contracts? To extend it to the extent that you are saying would lead to a much wider scope in the corruption law at the present time and that is not what we have in mind in this Bill.

  Q535  Baroness Whitaker: Reverting to what Lord Campbell-Savours said about the business community saying that they found it hard to understand, in a way do you not agree that that is more important than the judge and jury being able to understand?

  Lord Falconer of Thoroton: I think they are both important.

  Q536  Baroness Whitaker: Did you show this draft to representatives of the business community and, if so, what were their comments? The second question is, have you thought of an approved code of practice to flesh out this very self-contained Bill so as to be able to help business?

  Lord Falconer of Thoroton: As to the first question, this particular draft I think was first produced at the pre-legislative scrutiny stage in March and was not specifically shown to the CBI before.

  Mr Stephenson: That is right. It would be not good practice before we presented it to Parliament to show this draft outside.

  Lord Falconer of Thoroton: But the Law Commission Bill produced in 1998, which is not identical but has similar aspects to it, has been available to the CBI in effect for the last five years.

  Q537  Baroness Whitaker: And the approved code of practice?

  Lord Falconer of Thoroton: That sounds quite a sensible idea. It seems to us that there might well be real benefits in relation to that.

  Q538  Chairman: Minister, thank you. I know you have to get away. We have a number of other matters we were going to raise with you and we will raise them with the Attorney General. If necessary we will write to you and indicate what we would like your views on. If the very worst happens we will ask you if at all possible to come back.

  Lord Falconer of Thoroton: If the Committee would wish me to reappear I would be more than happy to do so.





2   Note by witness: by this we do not mean that "trading in influence" as defined in the Council of Europe Convention is covered within the draft Bill, but that the activity is covered where an agent/principal relationship exists. Back


 
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