The UK is in the international dog-house as a result of its perceived attitude to bribery and corruption abroad. The saga of the al-Yamamah enquiry has damaged our image. More generally, the Organisation for Economic Co-operation and Development (OECD) has been critical of Britain’s implementation of its Convention on Combating Bribery of Foreign Public Officials. The criticisms go beyond the al-Yamamah and also focus on the problem of lack of enforcement of the law on overseas corruption and the lack of clarity of the UK’s existing law.

The Government has been publicly committed to a reform of the law of bribery and corruption for some time. There was a Law Commission Report in1998; a draft reforming Bill was withdrawn after criticism in 2003; there was further consultation by the Home Office during 2005 and 2006; and the whole thing was passed back to the Law Commission again early this year. Some people, no doubt unkindly, thought that the Government may be stalling on this politically charged issue.

The Law Commission has moved quickly to produce its consultation paper on reforming the law of bribery, Reforming Bribery, and invited comments. The paper can be found at www.lawcom.gov.uk/docs/cp185.pdf, and responses must be in by March 20 next year.

The paper has a thorough analysis of the difficulties and complexities surrounding legislating on this aspect of the criminal law. The main, and very welcome, thrust is that the existing law should be simplified and codified into a single Act of Parliament.

The most interesting proposals are:

* There should be a comprehensive bribery offence in place of the existing mix of statutes and common-law;
* The focus of the offence should not be breach of an agent/principal relationship (which had previously caused some confusion) but the seeking of or performance of an “improper act or omission” in exchange for an advantage (which can include non-monetary advantages);
* “Improper act or omission” means breach of a duty that involves betrayal of trust or breach of a duty to act impartially or in the best interests of another. A classic example might be the breach of duty by a purchasing manager or procurement official in exchange for a kickback;
* There should be a separate offence of bribery of a foreign public official;
* There should be no exclusion of “facilitation payments” (that is, small-scale payments to speed up routine government actions by officials) from the offence of bribery;
* It should be a defence for the payer of a bribe to show that he believed the payment or “advantage” was legally required, or that the payment was made to avoid imminent danger of physical harm. This at least partly recognises that, in some places, it is can be hard to tell bribes from semi-official extortion;
* Prosecution of overseas bribery allegations should be done only with the permission of the Attorney-General. This acknowledges possible considerations of national security, as well as the risk to international relations by frivolous private prosecutions. This function of the Attorney may soon be transferred to the Director of Public Prosecutions or the head of the Serious Fraud Office, under the Government’s proposals to amend the role of the Attorney-General;
* There should be no new offence of “inadequately supervising foreign subsidiary companies”. This had been a proposal by Transparency International among others. The commission took the view that general principles of corporate personality should not be abandoned simply to assist the prosecution of bribery allegations;
* There was no recommendation for mandatory corporate compliance programmes directed at corruption, or liability where employees are inadequately trained or supervised and go on to commit offences. However, note that under the new Serious Crime Act 2007 it may be possible to convict the parent company of assisting or encouraging bribery. In general, it is prudent risk-management for businesses to have such programmes in place.

The UK has a real problem in enforcing its bribery laws. Few could argue against simplification of the law, and the concepts central to the amended offence may well be easier to apply. The reaction to the consultation from the Serious Fraud Office (SFO) and others charged with enforcement wll be interesting.

That said, it would be wrong to think that all enforcement problems were because the previous laws were too complicated. It is difficult to investigate overseas corruption, but the examples of the US and Germany show that it is far from impossible if enough resources are available. I understand that a new dedicated unit at the SFO is investigating dozens of cases of overseas bribery under the existing law, though it is perhaps telling that, as yet, no one has been charged.

The next steps for the Government are to get on and legislate in terms similar to those suggested by the Law Commission as soon as the final report is issued.

One further suggestion. Police resources will inevitably be both scarce and public and political opinion may not always prioritise problems perceived to be more serious abroad than in the UK. One way to mobilise extra resources may be to encourage private enforcement of the law, in the same way as recently proposed by the Office of Fair Trading in relation to competition law. It may also be useful to look at the US False Claims Act, which allows private actions to recover a share of damages where frauds are committed against the Government (often as a result of corruption). If it was easier for honest companies or governments to use the civil courts to recover for harm caused by corruption then this would have a significant influence on the risk/reward equation for bribers.

The author is a barrister and solicitor-advocate at Simmons & Simmons

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