House of Lords
Published July 31, 2008
Regina (Corner House Research and Another) v Director of the Serious Fraud
Office
Before Lord Bingham of Cornhill, Lord Hoffmann, Lord Rodger of Earlsferry,
Baroness Hale of Richmond and Lord Brown of Eaton-under-Heywood
Speeches July 30, 2008
Where he took the view that protecting the lives of British citizens
outweighed the public interest in pursuing an investigation into allegations
of corruption, the Director of the Serious Fraud Office had been entitled to
exercise his discretion to discontinue the corruption investigation
following threats by a foreign state as to consequences affecting national
security if he did not do so.
The House of Lords allowed the director’s appeal from the Queen’s Bench
Divisional Court (Lord Justice Moses and Mr Justice Sullivan) (The Times
April 16, 2008) who on an application by Corner House Research and Campaign
Against Arms Trade for judicial review, had quashed his decision.
Mr Jonathan Sumption, QC, Mr Philip Sales, QC, Mr Vaughan Lowe, QC, Mr Hugo
Keith, Miss Karen Steyn and Miss Rachel Kamm for the director; Mr David
Pannick, QC, Miss Dinah Rose, QC, Mr Philippe Sands, QC and Mr Ben Jaffey
for the claimants; Mr Nigel Pleming, QC, Mr Thomas de la Mare and Miss
Shaheed Fatima for JUSTICE, intervening by written submissions; Mr Julian
Knowles for BAE Systems plc, interested party, by written submissions.
LORD BINGHAM said that sections 108 to 110 of the Anti-terrorism, Crime and
Security Act 2001 made it an offence triable here for a UK national or
company to make a corrupt payment or pay a bribe to a public officer abroad.
That gave effect to the UK’s obligation under the OECD Convention on Combating
Bribery of Foreign Public Officials in International Business Transactions
(1997).
Under section 1(3) of the Criminal Justice Act 1987 the director “may
investigate any suspected offence which appears to him ... to involve
serious or complex fraud”. In performing his functions he was subject to the
superintendence of the Attorney-General: section 1(2).
In July 2004, the director, at the material times Mr Robert Wardle, had
launched an investigation into allegations of corruption against BAE. One
aspect of the investigation concerned the al-Yamamah contract, between the
UK and the Kingdom of Saudi Arabia involving BAE.
In response to a statutory notice requiring it to disclose details of payments
to agents and consultants in connection with the contract, BAE had written
on November 7, 2005, to the Attorney-General, Lord Goldsmith, QC, that
disclosure of the information would adversely affect relations between the
UK and Saudi Arabia and jeopardise the contract.
Article 5 of the OECD Convention provided: “Investigation and prosecution of
the bribery of a foreign public official shall be subject to the applicable
rules and principles of each party. They shall not be influenced by
considerations of national economic interest, the potential effect upon
relations with another state or the identity of the natural or legal persons
involved.”
His Lordship referred to ensuing communications and meetings and said that in
January 2006, in a meeting with, among others, both Law Officers, the
director had expressed his view that the investigation should continue. The
Attorney-General had concluded that that was in the public interest.
It had continued, and in the autumn of 2006 the SFO had intended to
investigate bank accounts in Switzerland to ascertain whether payments had
been made to an agent or public official of Saudi Arabia.
That had provoked an explicit threat by the Saudi authorities that if the
investigation were continued, Saudi Arabia would withdraw from the existing
bilateral counter-terrorism co-operation arrangements with the UK, withdraw
cooperation from the UK in relation to its strategic objectives in the
Middle East and end negotiations for the procurement of Typhoon aircraft.
After referring to further communications and meetings, his Lordship said that
on December 14, the director, taking the view that continuing the
investigation would risk serious harm to the UK’s national and international
security, had announced in a press release that he had decided to
discontinue it: “This decision has been taken following representations that
have been made both to the Attorney-General and the director ... concerning
the need to safeguard national and international security. It has been
necessary to balance the need to maintain the rule of law against the wider
public interest. No weight has been given to commercial interests or to the
national economic interest.”
The Attorney-General had made a statement in Parliament the same day (Hansard
HL Debates, cols 1711-1713), referring to the strong public interest in
upholding and enforcing the criminal law, in particular against
international corruption, but also to governmental views expressed “that
continuation of the investigation would cause serious damage to UK/Saudi
security, intelligence and diplomatic cooperation, which is likely to have
seriously negative consequences for the UK public interest in terms of both
national security and our highest priority foreign policy objectives in the
Middle East”.
He had pointed out that article 5 of the Convention precluded him and the SFO
from taking into account considerations of the national economic interest or
the potential effect on relations with another state and added that they had
not done so.
The Divisional Court had held that in yielding to the Saudi threat the
director had ceased to exercise the power to make the independent judgment
required of him by Parliament. There had been no sufficient appreciation of
the damage to the rule of law caused by submission to a threat directed at
the administration of justice.
That court had laid down the principle that submission to a threat was lawful
only when there had been no alternative course open to the decision-maker.
His Lordship said that the objection to that principle was that it distracted
attention from what, applying well settled principles of public law, was the
right question: whether, in deciding that the public interest in pursuing an
important investigation into alleged bribery was outweighed by the public
interest in protecting the lives of British citizens, the director had made
a decision outside the lawful bounds of the discretion entrusted to him by
Parliament.
Authority made it plain that only in highly exceptional cases would the court
disturb the decisions of an independent prosecutor and investigator.
The evidence made it plain that the decision to discontinue the investigation
had been taken with extreme reluctance. The director had not surrendered his
discretionary power of decision to any third party, although he had
consulted an expert source and the Attorney-General.
The issue was not whether his decision had been right or wrong but whether it
was one that he had lawfully been entitled to make. In the opinion of the
House it had been. It might be doubted whether a responsible decision-maker
could, on the facts before him, have decided otherwise.
As to article 5 of the Convention, an unincorporated treaty provision not
sounding in domestic law, the director had publicly claimed to be acting in
accordance with it.
In Parliament on February 1, 2007, the Attorney-General had said (Hansard HL
Debates, col 378): “I do not believe that the Convention does, or was ever
intended to, prevent national authorities from taking decisions on the basis
of such fundamental considerations of national and international
security...”
It was unnecessary and undesirable to decide whether that was so.
Lord Hoffmann agreed; Lord Rodger delivered an opinion agreeing with Lord
Bingham and Lord Brown; Lady Hale delivered an opinion concurring in the
result; Lord Brown delivered an opinion agreeing with Lord Bingham.
Solicitors: Treasury Solicitor; Leigh Day & Co; Mayer Brown
International LLP; Allen & Overy LLP.
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