Bribery and Corruption

Bribery may include the corruption of a public official as well as commercial bribery, which refers to the corruption of a private individual to gain a commercial or business advantage.

The essential elements of official bribery are:

·         Giving or receiving;

·         A thing of value;

·         To influence;

·         An official act.

The thing of value is not limited to cash or money. Such things as lavish gifts and entertainment, payment of travel and lodging expenses, payment of credit card bills, "loans," promises of future employment, interests in businesses, can be bribes if they were given or received with the intent to influence or be influenced.

Proof of corrupt influence often involves demonstration that the person receiving the bribe favoured the bribe-payer in some improper or unusual way, such as by providing preferential treatment, bending or breaking the rules, taking extraordinary steps to assist the bribe-payer, or allowing the bribe-payer to defraud the agency or company.

It is not necessary, however, that the prosecution or claimant demonstrate that the bribe-taker acted improperly; a bribe might be paid to induce an official to perform an act that otherwise would be legal, or an act that the official might have performed without a bribe. Bribery schemes involving these circumstances, however, are difficult to prove and lack appeal for prosecution.

The principal statutes currently dealing with corruption are the Public Bodies Corrupt Practices Act 1889, the Prevention of Corruption Act 1906 and the Prevention of Corruption Act 1916. This legislation makes bribery a criminal offence whatever the nationality of those involved, if the offer, acceptance or agreement to accept a bribe takes place within the UK's jurisdiction. The Anti-terrorism, Crime and Security Act 2001 has extended UK jurisdiction to corruption offences committed abroad by UK nationals and incorporated bodies. The primary purpose of the Anti-terrorism, Crime and Security Act 2001 is to cut off terrorist funding. It aims to do this by freezing assets and by mutual cooperation between international agencies in respect of the sharing and collection of information relating to bribery and corruption.

Commercial bribery is currently covered by the Prevention of Corruption Act 1906 insofar is it relates to bribes accepted by agents. In addition an employer has certain rights in respect of an employee who has accepted bribes. These include the power to dismiss and the employee will be treated as holding the bribe on trust for the employer. Therefore the employer can sue for the bribe. The employer will also be able to go against the employee and the person who paid the bribe for any losses that resulted from the bribe being accepted.

In addition the report of Lord Nolan and his committee on standards in public life resulted in a new code of conduct for those in public life following a number of high profile cases.

The code provides clarity for the standards of conduct.

Also recommended in the Nolan Committee's report were steps to clarify the law relating to bribery or receipt of a bribe by a Member of Parliament, which has resulted in the publication of a draft Corruption bill. The bill clarifies the existing law on corruption, replacing the various overlapping offences with one piece of legislation. It defines what is meant by the term 'corruptly' and aims to ensure that the law on corruption is consistent, whether the offence takes place in this country or abroad. The draft legislation will bring an end to the protection of Parliamentary Privilege for MPs and peers in cases of corruption.

Bribery

At common law bribery is difficult to define. It is arguable whether it exists as a general offence or is made up of a number of offences of bribery.

As regards the definition of a public official, the Court of Appeal in Whitaker [1914] 3 KB 1283 said that a public officer was "an officer who discharges any duty in the discharge of which the public are interested, more clearly so if he is paid out of a fund provided by the public"

However the common law offence of bribery is not confined to that of public officials as bribing of electors was found to be a common law offence in the case of Pitt and Mead [1762] 3 Burr 1335; 97 ER 861.

REPRESENTATION OF THE PEOPLE ACT 1983 C.2 S. 113

This Act creates a criminal offence for the corrupt practice of bribery, for example, an attempt to facilitate the sale of votes in an election.

(1) A person shall be guilty of a corrupt practice if he is guilty of bribery.

(2) A person shall be guilty of bribery if he, directly or indirectly, by himself or by any other person on his behalf:

(a) gives any money or procures any office to or for any voter or to or for any other person on behalf of any voter or to or for any other person in order to induce any voter to vote or refrain from voting, or

(b) corruptly does any such act as mentioned above on account of any voter having voted or refrained from voting, or

I makes any such gift or procurement as mentioned above to or for any person in order to induce that person to procure, or endeavour to procure, the return of any person at an election or the vote of any voter, or if upon or in consequence of any such gift or procurement as mentioned above he procures or engages, promises or endeavours to procure the return of any person at an election or the vote of any voter.

For the purposes of this subsection:

(i) references to giving money include references to giving, lending, agreeing to give or lend, offering, promising, or promising to procure or endeavour to procure any money or valuable consideration; and

(ii) references to procuring any office include references to giving, procuring, agreeing to give or procure, offering, promising, or promising to procure or to endeavour to procure any office, place or employment.

(3) A person shall be guilty of bribery if he advances or pays or causes to be paid any money to or for the use of any other person with the intent that that money or any part of it shall be expenses in bribery at any election or knowingly pays or causes to be paid any money to any person in discharge or repayment of any money wholly or in part expended in bribery at any election.

(4) The foregoing provisions of this section shall not extend or be construed to extend to any money paid or agreed to be paid for or on account of any legal expenses incurred in good faith at or concerning an election.

(5) A voter shall be guilty of bribery if before or during an election he agrees, or contracts for any money, gift, loan or valuable consideration, office, place or employment for himself or for any other person for voting or agreeing to vote or for refraining or agreeing to refrain from voting.

(6) A person shall be guilty of bribery if after an election he directly or indirectly by himself or by any other person on his behalf receives any money or valuable consideration on account of any person having voted or refrained from voting or having induced any other person to vote or refrain from voting.

(7) In this section the expression "voter" includes any person who has or claims to have a right to vote.

Corruption

The term "corruptly" is used in each of the principal corruption Acts, buts its meaning is by no means clear. As D Lanham[1] explained in his book "Bribery and Corruption,"

The most difficult question under the 1889 and 1906 Acts is the meaning of "corruption". The main questions are whether the word adds anything to the remainder of the formulation of the offence, and if so, what it is that it adds. The cases on these questions are in impressive disarray.

The House of Lords in Cooper v Slade, [1857] HL Cas 746, the leading case on the meaning of "corruptly", took the view that "corruptly" meant "purposely doing an act which the law forbids as tending to corrupt". Professor A T H Smith suggests that such an interpretation would leave the word "devoid of any functional significance". There is a divergence of case law. In the Bradford Election Case (No 2) (1869) 19 LT 723, 728, Martin B held that "corruptly" had to be given some meaning, which he stated was akin to an evil mind. In other words, both motive and intention were held to be relevant in deciding whether the alleged conduct was "corrupt".

Similarly, in Lindley [1957] Crim LR 321. Pearce J directed the jury that the defendant must have dishonestly intended to weaken the loyalty of the servants to their master and transfer that loyalty from the master to himself.

This unsatisfactory state of the law of corruption has led to the publication by the Home Office of a Draft Corruption Bill[2] with a clear definition of "corruptly":

DRAFT CORRUPTION BILL

The Bill, as published 24 March 2003, Section 5 of the draft bill defines "corruptly" as:

Conferring an advantage: meaning of Corruptly

(1) A person I 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 for 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 it

(c) The exception provided by section 6 does not apply

(d) The exception provided by section 7 does not apply

(2) A person I 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 omission

(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

PREVENTION OF CORRUPTION ACT 1906

Until the draft Corruption Bill is passed, corruption is defined by section 1 of the Prevention of Corruption Act 1906 (as amended by s.47 Criminal Justice Act 1988 and s.108(4) Anti-Terrorism, Crime and Security Act 2001)

(1)   If any agent corruptly accepts or obtains, or agrees to accept or attempts to obtain, from any person, for himself or for any other person, any gift or consideration as an inducement or reward for doing or forbearing to do, or for having after the passing of this Act done or forborne to do, any act in relation to his principal's affairs or business, or for showing or forbearing to show favour or disfavour to any person in relation to his principal's affairs or business;

or

If any person corruptly gives or agrees to give or offers any gift or consideration to any agent as an inducement or reward for doing or forbearing to do, or for having after the passing of this Act done or forborne to do, any act in relation to his principal's affairs or business, or for showing or forbearing to show favour or disfavour to any person in relation to his principal's affairs or business;

or

If any person knowingly gives to any agent, or if any agent knowingly uses with intent to deceive his principal, any receipt, account, or other document in respect of which the principal is interested, and which contains any statement which is false or erroneous or defective in any material particular, and which to his knowledge is intended to mislead the principal;

he shall be guilty of a misdemeanour, and shall be liable

(a)   on summary conviction, to imprisonment for a term not exceeding 6 months or to a fine not exceeding the statutory maximum, or to both; and

(b)   on conviction on indictment, to imprisonment for a term not exceeding 7 years or to a fine, or to both

(2)   For the purposes of this Act the expression "consideration" includes valuable consideration of any kind; the expression "agent" includes any person employed by or acting for another; and the expression "principal" includes an employer.

(3)   A person serving under the Crown or under any corporation or any municipal, borough, county, or district council, or any board of guardians, is an agent within the meaning of this Act.

REPRESENTATION OF THE PEOPLE ACT 1983

Chapter 2, s. 115 (2) provides criminal liability for unduly influencing a vote, which constitutes a corrupt practice.

(1) A person shall be guilty of a corrupt practice if he is guilty of undue influence.

(2) A person shall be guilty of undue influence

(a) if he, directly or indirectly, by himself or by any other person on his behalf, makes use of or threatens to make use of any force, violence or restraint, or inflicts or threatens to inflict, by himself or by any other person, any temporal or spiritual injury, damage, harm or loss upon or against any person in order to induce or compel that person to vote or refrain from voting, or on account of that person having voted or refrained from voting; or

(b) if, by abduction, duress or any fraudulent device or contrivance, he impedes or prevents the free exercise of the franchise of an elector or proxy for an elector, or so compels, induces or prevails upon an elector or proxy for an elector either to vote or to refrain from voting.

ANTI-TERRORISM, CRIME AND SECURITY ACT 2001

This Act amends the Terrorism Act 2000 to make further provisions relating to terrorism, security and provision for the freezing of assets belonging to terrorists. The aims of the ACSA include:

·         Cutting off terrorist funding.

·         Ensuring mutual co-operation of government agencies and departments with respect to the collection and sharing of information.

·         Extending the powers of the police force.

·         Ensuring that the UK can meet its European obligations in respect of police and judicial co-operation and international obligations to counter corruption and bribery.

Section 108 ensures that the common law offence of bribery extends to persons holding public office outside the UK. It also amends the Public Bodies Corrupt Practices Act 1889, the Prevention of Corruption Act 1906 and the Prevention of Corruption Act 1916 to ensure that those Acts cover the bribery and corruption of officials of foreign public bodies, as well as "agents" (within the meaning of the 1906 Act) of foreign "principals" (who may be in the public or private sector).

Section 109 (as amended by the British Overseas Territories Act 2002) gives the courts extra-territorial jurisdiction over bribery and corruption offences committed abroad by UK nationals and bodies incorporated under UK law. It enables the offences specified in subsection (3), when committed by UK nationals and bodies incorporated under UK law, to be prosecuted here, wherever those offences take place. "UK national" is defined in subsection (4) in the same way as in section 67 of the International Criminal Court Act 2001.

As regards legal persons, the section applies to any body incorporated under the law of any part of the UK. It thus applies not only to companies but also, for example, to limited liability partnerships.

108: Bribery and Corruption: Foreign Officers Etc.

(1) For the purposes of any common law offence of bribery it is immaterial if the functions of the person who receives or is offered a reward have no connection with the United Kingdom and are carried out in a country or territory outside the United Kingdom.

(2) In section 1 of the Prevention of Corruption Act 1906 (c. 34) (corrupt transactions with agents) insert this subsection after subsection (3)-"(4) For the purposes of this Act it is immaterial if-

1. the principal's affairs or business have no connection with the United Kingdom and are conducted in a country or territory outside the United Kingdom;

2. the agent's functions have no connection with the United Kingdom and are carried out in a country or territory outside the United Kingdom".

(3) In section 7 of the Public Bodies Corrupt Practices Act 1889 (c. 69) (interpretation relating to corruption in office) in the definition of "public body" for "but does not include any public body as above defined existing elsewhere than in the United Kingdom" substitute "and includes any body which exists in a country or territory outside the United Kingdom and is equivalent to any body described above".

(4) In section 4(2) of the Prevention of Corruption Act 1916 (c. 64) (in the 1889 and 1916 Acts public body includes local and public authorities of all descriptions) after "descriptions" insert "(including authorities existing in a country or territory outside the United Kingdom)".

Section 109: Bribery and Corruption Committed Outside the UK:

(1) This section applies if-

(a) a national of the United Kingdom or a body incorporated under the law of any part of the United Kingdom does anything in a country or territory outside the United Kingdom, and

(b) the act would, if done in the United Kingdom, constitute a corruption offence (as defined below).

(2) In such a case-

(a) the act constitutes the offence concerned, and

(b) proceedings for the offence may be taken in the United Kingdom.

(3) These are corruption offences-

(a) any common law offence of bribery;

(b) the offences under section 1 of the Public Bodies Corrupt Practices Act 1889 (c. 69) (corruption in office);

I the first two offences under section 1 of the Prevention of Corruption Act 1906 (c. 34) (bribes obtained by or given to agents).

(4) A national of the United Kingdom is an individual who is-

(a) a British citizen, a British overseas territories citizen, a British National (Overseas) or a British Overseas citizen,

(b) a person who under the British Nationality Act 1981 (c. 61) is a British subject, or

I a British protected person within the meaning of that Act

INDUCEMENTS AND REWARDS

Where in any proceedings against a person for an offence under the Public Bodies Corrupt Practices Act 1889, it is proved that any money, gift, or other consideration has been paid or given to or received by a person in the employment of Her Majesty or any Government Department or a public body by or from a person, or agent of a person, holding or seeking to obtain a contract from Her Majesty or any Government Department or public body, the money, gift, or consideration shall be deemed to have been paid or given and received corruptly as an inducement or reward as is mentioned in such Act unless the contrary is proved.

Public Bodies Corrupt Practices 1889 s. 1

(1) Every person who shall by himself or by or in conjunction with any other person, corruptly solicit or receive, or agree to receive, for himself, or for any other person, any gift, loan, fee, reward, or advantage whatever as an inducement to, or reward for, or otherwise on account of any member, officer, or servant of a public body as in this Act defined, doing or forbearing to do anything in respect of any matter or transaction whatsoever, actual or proposed, in which the said public body is concerned, shall be guilty of a misdemeanour.

(2) Every person who shall by himself or by or in conjunction with any other person corruptly give, promise, or offer any gift, loan, fee, reward, or advantage whatsoever to any person, whether for the benefit of that person or of another person, as an inducement to or reward for or otherwise on account of any member, officer, or servant of any public body as in this Act defined, doing or forbearing to do anything in respect of any matter or transaction whatsoever, actual or proposed, in which such public body as aforesaid is concerned, shall be guilty of a misdemeanour.

AUCTIONS (BIDDINGS AGREEMENT) ACT 1927

This Act provides that it is a criminal offence for a dealer and another party to enter into an agreement whereby the dealer induces the other for value to abstain from bidding at an auction. Further, the sale contract will be voidable at the seller's option.

An inducement for abstaining from bidding at auction

(1)   If any dealer agrees to give, or gives, or offers any gift or consideration to any other person as an inducement or reward for abstaining, or for having abstained, from bidding at a sale by auction either generally or for any particular lot, or if any person agrees to accept, or accepts, or attempts to obtain from any dealer any such gift or consideration as aforesaid, he shall be guilty of an offence under this Act, and shall be liable on summary conviction to a fine not exceeding one hundred pounds, or to a term of imprisonment for any period not exceeding six months, or to both such fine and such imprisonment:

Provided that, where it is proved that a dealer has previously to an auction entered into an agreement in writing with one or more persons to purchase goods at the auction bonâ fide on a joint account and has before the goods were purchased at the auction deposited a copy of the agreement with the auctioneer, such an agreement shall not be treated as an agreement made in contravention of this section.

(2)   For the purposes of this section the expression "dealer" means a person who in the normal course of his business attends sales by auction for the purpose of purchasing goods with a view to reselling them.

(3)   In England and Wales a prosecution for an offence under this section shall not be instituted without the consent of the Attorney-General or the Solicitor-General.

Misfeasance in Public Office

In the UK, it is often not possible to sue public bodies for negligence or fraud in carrying out their public duties. One possible cause of action that can be effective against Crown bodies is misfeasance in public office. To succeed in such a claim, it is necessary to demonstrate that the Defendant:

·         Acted unlawfully;

·         Knew of (or showed reckless indifference to) its unlawful actions; and

·         Knew that its actions would probably cause loss to the claimants (or was recklessly indifferent to the consequences).

Extortion

An extortion case is often the flip side of a bribery case. Extortion is defined as the obtaining of property from another with the other party's 'consent', which has been induced by wrongful use of actual or threatened force or fear. Fear may include the apprehension of possible economic damage or loss. A demand for a bribe or a kickback also might constitute an extortion. Extortion has been abolished by s32(1)(a) of the Theft Act 1968. However, it has been said that the elements of extortion are covered by the offences of bribery and blackmail.