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Bribery Bill [HL]

My Lords, I thank noble Lords who have spoken. It is clear from the Bill, and it will be clear from my speech, that we have set our face against the concept of negligence and that we are talking about an offence of strict liability with a defence. I shall come on to the level of proof for that defence. The amendments deal with the elements of the Clause 7 offence and the associated defence. Under Clause 7, a commercial organisation will be guilty of the offence if a person associated with the organisation bribes another person with the intention of obtaining or retaining business or an advantage in the conduct of business for the organisation. It will be a defence for the organisation to prove that it had "adequate procedures" in place that are designed to prevent persons who are associated with it from undertaking such conduct. The amendments which the noble Lord, Lord Henley, tabled to Clause 7 would delete this offence and replace it with the offence in the draft Bill that we published for pre-legislative scrutiny. That offence required the prosecution to prove that a responsible person or a number of such persons in the organisation were negligent in failing to prevent the bribe. I note that Amendment 7 would also revise the defence so that, instead of referring to "adequate procedures" for preventing bribery, it would refer to procedures that were, ""reasonable … in all the circumstances"," taking into account the extent of the organisation’s influence over the person who was paying the bribe. The amendments would also mean that the organisation would no longer need to prove that it had reasonable procedures in place. While I understand the motivation behind these amendments, the noble Lord will recall that the Joint Committee that scrutinised the draft Bill specifically recommended that we should remove the requirement to prove negligence. Witnesses to the Joint Committee described the relationship between the negligence element of the offence and the adequate procedures defence as uncomfortable. The Joint Committee was concerned that focusing on whether a responsible person was negligent, rather than on the collective failure of the company to ensure that adequate anti-bribery procedures were in place, would introduce an unnecessary level of complexity. Clause 7 as it now stands follows the Joint Commission’s persuasive recommendation and removes this complexity and uncertainty. We also accepted the Joint Committee’s view that a commercial organisation is well placed to demonstrate on the balance of probabilities that it had adequate procedures in place to prevent bribery. I understand that, when a defence is specified, it does not have to be proved beyond reasonable doubt; it merely has to be proved on the balance of probabilities. The burden of proof is therefore not completely reversed as the noble Lord, Lord Henley, suggested. It is a strict liability. Our view on these matters has not changed. The reality is that the commercial organisation is best placed to establish the adequacy of its procedures. Placing the burden on the prosecution to prove a negative could render this important offence ineffective in practice. I stress, however, that while the prosecution will need to prove the offence beyond reasonable doubt, the defendant will have only to establish on the balance of probability that the defence has been made out. We cannot accept the noble Lord’s amendment to replace "adequate procedures" with, ""reasonable procedures in all the circumstances"." One must ask whether the noble Lord is saying that it is acceptable for commercial organisations to have inadequate procedures in place to prevent bribery. We say that it surely is not. Changing the test in this way is unnecessary and sends out the wrong message. It would allow an organisation to argue that although the procedures were wholly inadequate, they were none the less reasonable, given—for example—the resources available to the organisation to devote to preventing bribery. Commercial organisations should have adequate bribery prevention procedures. It is perfectly "reasonable", to use the language of the amendment, to expect that. Nor do we agree that it is necessary to replace "prevent bribery" with "combat bribery". Our ultimate aim is of course to prevent bribery, but the defence recognises that a well run organisation will avoid liability, despite an isolated incident of bribery, if its procedures are otherwise adequate. If the noble Lord’s concern is that organisations will find it difficult to understand the concept of adequate procedures, they would surely face similar difficulties in understanding the concept of reasonable procedures. The noble Lord has also proposed Amendment 11 relating to Clause 8, which deals with the commercial organisation’s relationship with the person who pays a bribe. Clause 8 states that the question of whether a person is performing services on behalf of an organisation is to be determined by reference to all the relevant circumstances. We do not think that it is necessary to explain this further in the Bill. It goes without saying that "all the relevant circumstances" is likely to cover the extent of the organisation’s influence over the person paying the bribes. Finally, I take this opportunity to clarify the work being undertaken by the Law Commission in respect of corporate liability. Following a request from the now Department for Business, Innovations and Skills in late 2008, and as a result of discussion with that department and the Ministry of Justice in early 2009, the Law Commission’s corporate liability project took as its focus the use of the criminal law as a way of promoting regulatory objectives or public interest goals, particularly how businesses are treated by the criminal law. Consequently, I can advise the House that the liability of a parent company for the acts of its subsidiary is outside the scope of the current project. However, the Law Commission expects that this issue would fall to be considered in a future project as part of a general review of the law on corporate criminal liability. For the reasons that I have mentioned, I invite the noble Lord, Lord Henley, to withdraw his amendment.