BREAKFAST SEMINAR WITH GRANT THORNTON,
TUESDAY 10 NOVEMBER 2009
VIVIAN ROBINSON QC,
GENERAL COUNSEL, SERIOUS FRAUD OFFICE
Good morning. Thanks for asking me here today.
I am the first General Counsel at the Serious Fraud Office, and have been in post since April. A great deal has happened and is happening in the world of combating fraud even since I began. I do not regard it as a curse to live in interesting times.
My role is strategic and outward-facing (Hence my appearance here today) though I will get involved in operational issues through my membership of the panel that reviews cases quarterly.
Part of my role is to look to future and possible legislative requirements. It is this aspect of my role that brings me onto the Bribery Bill, the main subject of my words this morning.
Our current law on bribery is out of date. The provisions we have to work with were introduced as a result of a munitions scandal during the Boer War in the very earliest days of the twentieth century. They are not fit for the modern global economy.
The OECD has been very critical of our law and has consistently pressed the UK Government to introduce changes. I was pleased, therefore, when the Government published draft legislation in March of this year. Publication was for the purpose of pre-legislative scrutiny. This means that the government wanted the views of commentators and, in particular, a report from a very distinguished Select Committee consisting of members of the House of Lords and the House of Commons.
Richard Alderman had the privilege of being asked to give evidence. He tells me that it was a daunting experience and there were many very good and perceptive questions.
The Committee published its report on 28 July this year. The Report consists of over 100 closely typed pages with about 400 pages of evidence. It contains a searching examination of the draft legislation. I shall refer to some of the Committee's comments in a moment.
The new law represents a sea-change in the approach taken to bribery. The SFO will have the lead responsibility in enforcing the Bill if it is enacted. I would like, therefore, to highlight two very important aspects.
The first is this. At present when investigating corruption in corporates, we have to prove the involvement of the 'controlling mind' of the company. The controlling mind element can often be extremely complex for us to prove. Showing, for instance, that the controlling mind of a global corporation (effectively the Board or other senior officers) were involved in the fraud and corruption is a major hurdle for us and one that our counterparts elsewhere (e.g. in the US) do not have to overcome. We have been drawing attention to this difference and Richard referred to it in his evidence to the Committee. It is a big difference.
The proposed Bribery Bill puts forward a new offence of negligently failing to prevent bribery. The bribery can be instigated by any employee, agent or subsidiary of the corporate. This, therefore, brings about a criminal form of vicarious liability and enables us to prosecute the corporate. It moves us midway towards the US system. We move away from the controlling mind but we shall need to prove negligence in preventing bribery.
The draft legislation sets up a defence where the corporate can show that adequate procedures are in place to prevent bribery. This, of course, has given rise to a lot of comment because corporates and advisers have asked for guidance on what would be regarded as adequate. The Guide that we have prepared sets out our views on this. As I mentioned earlier, we have also set up a rulings process under the Guide modelled to some extent on the US Department of Justice system.
The Committee had a number of criticisms to make of this provision. The most important was that they were not persuaded that negligence should give rise to criminal liability. They have recommended that this test should be taken out. The result would be a form of strict liability subject to the defence of adequate procedures. It would make the law tougher.
The Government agreed and that is the current position. Therefore, if we prove that a bribe occurred on behalf of a company, this will make the company criminally liable as well.
The second important provision in the draft legislation concerns corporates not registered here but who carry out some business in the UK. We shall be able to prosecute those corporates if they are involved in bribery anywhere in the world. This will create a level playing field between corporates incorporated here and those incorporated elsewhere.
There has been little public comment on this provision and I have to say that I have not yet met an adviser who is prepared to own up to representing anyone in this category. I am sure though that there will be some corporates in this class.
We have been talking to corporates and their advisers about how we interpret negligence and what are adequate procedures. And, as I have said, we have given help in the Guide.
Our overall approach is this. An important part of the new SFO culture is that we are not just concerned with prosecutions. We are concerned as well about behaviour, as Richard has explained.
The approach in relation to corruption was set out by Jack Straw, the Minister for Justice and Government Anti-Corruption Champion recently. He said: "A strong legal architecture is necessary in tackling corruption but of itself it is not sufficient. Ultimately our aim must be to bring about behavioural change within businesses themselves, creating corporate cultures in which no form of corruption is tolerated. Our approach to enforcement can contribute to this."
I am very pleased when the SFO is invited to talk to individual corporates and their advisers about their approach. We learn a lot from this and so does the corporate. It is part of our role to which I attach great importance. The door is open to any approaches to us on this.
I hope this has given you some idea about the forthcoming Bribery Bill and I would welcome your questions.