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Bribery Bill [HL] – in the House of Lords at 3:06 pm on 2nd February 2010.

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Clause 4 : Improper performance to which bribe relates

Amendment 1

Moved by Lord Lyell of Markyate

1: Clause 4, page 3, line 10, at end insert "with corrupt intent, and"

Photo of Lord Lyell of Markyate Lord Lyell of Markyate Conservative

My Lords, I shall speak also to Amendment 2. The Minister will be pleased to know that Amendments 1 and 2 are probing amendments, because I have got them wrong from a technical point of view. However, my technical error helps to highlight a problem with, and flaw in, the Bill. I support the Bill and hope that it will find its way onto the statute book; but the flaw is that the serious offences of bribery and corruption, which we have known for hundreds of years and which have been statutory for more than 100 years, do not in the Bill involve the need to establish the mens rea, or guilty mind, of the accused.

The amendments to Clause 4-on page 3, lines 10 and 13-state that the offences should be carried out "with corrupt intent" and/or that offenders should demonstrate "corrupt intent". The error in my reading is that unfortunately what I have added requires only that there should be corrupt intent on the part of the recipient, who in practice will be the demander of the bribe. However, I am particularly concerned about certain circumstances arising. Of course, those circumstances do not always apply because, by the time most bribery and corruption cases come to trial, there is a good, strong case against the accused and juries have no difficulty, and certainly no reluctance, in finding people guilty of bribery or corruption if the facts warrant it. The problem with bribery and corruption cases is not that juries are reluctant to convict but that the activities that lead to these cases happen in the shadows, and the great difficulty is in getting the evidence in the first place. For many years when I was a law officer, I was responsible for overall prosecution in this area and for giving authority to prosecute under the existing law. In my experience, once the evidence is there, a jury is not reluctant to convict.

An example used in Committee by my noble and learned friend Lord Mackay of Clashfern begins to show the kind of circumstance in which a jury might have doubt about whether the "giver" of the bribe-I use the word carefully because he is not necessarily the inducer of the bribe-really has a guilty mind. Over my 40 years of experience at the Bar, particularly in the early days when I did more criminal work, sadly I came across cases of corruption in the police. Although one hopes that it will not happen in this country, one can never be quite sure, and practically every Member of this House will remember that Sir Robert Mark was brought in to clear up a certain amount of unsatisfactory and corrupt behaviour among the Soho police.

However, the hypothetical example that I give is of someone who has bought an aeroplane ticket. He arrives at the gate and is asked for a bribe in order to get his boarding pass. He is absolutely entitled to get the pass-he has paid for it and would expect to get it as a matter of course-but he finds that he cannot get on to the aircraft without handing over a bribe. He has a choice. He can say to the chap who is demanding the bribe, "This is utterly wrong. You shouldn't do it. If you won't let me on to the aircraft I shall go and report you at once", or he can pay over the money demanded, get on to the aircraft and, one hopes, report the person when he lands, or perhaps even report the person to the cabin crew. Once again, I express my thanks to Mr Colin Nicholls QC, a great expert in this area who has written the leading academic work and practical guidance on the subject. He certainly helped to clarify my mind on this.

The difficulty is that under the Bill as drafted the offence is committed by the payer of the bribe-the person from whom the bribe has been wrongly and corruptly demanded by the official standing at the boarding gate. Simply by handing over the money, he is giving the bribe. Of course, it would depend on the detailed facts of a case but I think that, if the Bill were drafted so as to require a guilty mind, a jury would be very reluctant to convict someone in those circumstances. On the wording of the statute the jury would be obliged to convict, although it may be reluctant to do so as juries do not like a sense of injustice in any event. I ask the Minister to focus on that and to consider whether he accepts that the wording means that in those very difficult circumstances when someone hands over the money and pays the bribe, he could be guilty of an offence. The person's protection-this is how the Government have put it so far-lies in the sensible discretion of the prosecutor not to prosecute in those circumstances as there would be strong mitigation.

I am not happy to put on to the statute book criminal law that makes someone a criminal without a guilty mind. Of course, we have a large number of absolute offences but this is not an area in which there should be an absolute offence. I had hoped to add the words "corrupt intent" to some of the early clauses, particularly to Clauses 4 and 5 which refer to relevant expectations. I wanted to make it clear that a relevant expectation was that somebody should act corruptly. In the example that I gave it is perfectly obvious that the official at the boarding point who demanded the bribe for the boarding card was acting corruptly. There can be no doubt about that, but there is serious doubt about whether the person who handed over the bribe was acting corruptly. There could be all sorts of circumstances that could be mitigating factors or otherwise. The person has to get home, he may be seriously disrupted and it would involve expense to stay overnight. There could be more heart-rending circumstances such as trying to get home to help his wife with a sick child, and so on. One need not go into the detail. The point is whether or not they are acting corruptly.

The present law requires a guilty mind. The word "corruption" has been much criticised in academic circles but it is a requirement at common law and all forms of this offence to date. It is a requirement in every common law jurisdiction in the world with the possible exception of one state in Australia which uses the word "impropriety", but I have not studied the exact wording for the state of Victoria. In Canada, Australia, South Africa, New Zealand and the United States there is a requirement for a guilty mind. We are proposing to put on the statute book a law that does not necessarily demonstrate a guilty mind. It often will and one would hope that the accused would be convicted, but it could cause a conviction in circumstances when there will not be a guilty mind.

The Government have two answers. It will either be a matter for prosecutorial discretion or it will be a matter for government guidance. Perhaps the Minister will clarify this point. I do not think that he intends to give guidance in this area, but if he does it will be useful to know. The Bill will go on to the other place soon where these matters can be further considered. At the moment, it is said that we can safely leave this to the prosecutor. I have great respect for prosecutors, but I am not happy to leave things to them.

It is sometimes forgotten that there are two requirements before one can prosecute in any case. First, one has to be satisfied that there is sufficient credible evidence that will give rise to a reasonable prospect that a jury, properly directed, will convict-sometimes called the 51 per cent test. I very much doubt whether the example that I have posited-I take it from my noble and learned friend-would give rise to a jury convicting, so one would not get to the second test, which is the public interest test. I do not think that it is safe to leave this to the public interest test. Just as we have a strong belief in the jury system, so the jury system works back and gives confidence to our prosecutorial system. It is a very good discipline for a prosecutor to say to himself or herself, "Would a jury convict here? Is it really likely, more likely than not, that a jury will convict?" Yet, we could have convictions here in circumstances where a jury would not convict.

I should have thought-this is probably my mistake-that it would have been "a relevant expectation", in the words of the clauses, that a jury would convict only in circumstances where there was a guilty mind, where the jury was satisfied that the person was acting "dishonestly", to use another controversial word in this area. We have drafted a law where that is not the case.

I am attempting to ameliorate that. I think I should be told that I would fail because "relevant expectation" relates to the recipient of the bribe, not to the giver of the bribe. If I am wrong on that, I am very happy, because my amendment could do the business, but I probe the matter with care and look forward, as always, to the careful explanation that I am sure that the Minister will give.

Photo of Lord Henley Lord Henley Shadow Minister, Justice 3:15 pm, 2nd February 2010

My Lords, I do not know whether other noble Lords will intervene before the Minister replies, as we are at Report. Many of those who served on the Select Committee will probably have strong views about my noble and learned friend's amendment. I appreciate that it is merely a probing amendment, and my noble and learned friend may wish to come back to it later. He also made it clear that he supports the Bill, as I think that most of us do-I reiterate my support for the Bill. We simply hope that we get it right on the night, if I can put it that way. I am sure that we are doing just that.

I have some sympathy with the arguments that my noble and learned friend put forward, which he argued powerfully in Committee in the Moses Room and again today: that the bribery offences could be better defined if they included some reference to corrupt intent. As I said, I have some sympathy, but regret that I cannot fully agree with him. In our earlier debates, the Minister argued that "acting corruptly" is a vague and inherently difficult concept-I think that I quote him correctly. On this occasion, I agree with the Minister's argument over that of my noble and learned friend.

I can see, and am persuaded by, the case that corruption will in effect be a description of the behaviour made into offences by the Bill. To determine whether an offence has been committed under the Bill, we will look to Clauses 1 and 2 to see whether the behaviour when involving payments or other advantage has been improper. The test, therefore, as recommended by the Law Commission and endorsed by the Joint Committee as a whole, is one of impropriety.

I have tabled some further amendments, which we will come to shortly, to explore why the test of impropriety should not also extend to the offence in Clause 6. However, the test of impropriety is the one that we shall employ, and that is the one that I wish to examine when we get to Clause 6.

I am sorry that I cannot support my noble and learned friend, but no doubt he and I both look forward to hearing the Minister's response.

Photo of Lord Swinfen Lord Swinfen Conservative

My Lords, I support the amendment tabled by my noble and learned friend because some years ago I was taking equipment into another country with full permission from the authorities there and all the paperwork in order. However, customs officials decided that the equipment was valuable and that a little cash might ease its passage through customs. They did not get any because I was patient and waited for a number of hours at considerable inconvenience to take it through. If I had been in a great hurry and had stuck my hand in my pocket and given something to the customs officials, I would have been caught for bribery when all I was trying to do was to speed up my time after a very long flight-so I was tired-to make certain I got the equipment, for which I already had authority, into the country. A number of people could be caught in similar situations.

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Ministry of Justice, The Parliamentary Under-Secretary of State for Justice

My Lords, we are grateful to the noble and learned Lord for tabling these amendments. They amend the Bill's general bribery offences by introducing a requirement of "corrupt intent". Amendment 1 provides that in order to amount to an improper performance of a relevant function, as defined in Clause 4 for the purposes of Clauses 1 and 2, the function must not only amount to a breach of a relevant expectation but must be performed "with corrupt intent". Amendment 2 requires that the performance "demonstrates corrupt intent" if it is an improper performance by virtue of a failure to perform the function.

The noble and learned Lord, Lord Lyell of Markyate, has, throughout the Bill, expressed concern about the complexity of the definition of bribery used in it and has suggested that we should rely on references to "corrupt intent" in order to inject more clarity. There is broad agreement around the House that these offences must be formulated with as much clarity and certainty as possible, but we remain unconvinced that these amendments would achieve that outcome.

In Committee, we made it clear that we see no benefit in remaining wedded to the concept of "acting corruptly" as found in the existing legislation. It is a vague and unhelpful construct that has spawned a number of different and often inconsistent interpretations from the courts. The only attempt at a definition-

"doing an act which the law forbids as tending to corrupt"- is not very helpful. We remain of the view that the Law Commission came to the right conclusion when it found that the lack of clarity surrounding this concept weakened the effective application of the law.

The Law Commission's research and consultation on this point and on the other options for formulating the general offences was detailed and thorough. Its conclusion was that offences based on the improper conduct model were the best option. Following the Law Commission's work, the Joint Committee-of which the noble and learned Lord was a distinguished member-chaired by the noble Viscount, Lord Colville, who is in his place, scrutinised the Government's draft Bribery Bill, which was, as the House knows, based on the Law Commission's proposals. That committee fully endorsed the improper performance test.

I am sure that noble Lords who have participated in the debates on this Bill will now be familiar with the way the general offences work, but I shall briefly recap. A bribery offence is committed where a financial or other advantage is offered, promised or given and is linked to the improper performance of a relevant function or activity. The impropriety arises from a breach of an expectation that the relevant function or activity is to be carried out in good faith and impartially or that the person performing it is in a position of trust.

Clauses 1 and 2 set out six cases of bribery that follow this model, and that can be readily understood and provide the legal certainty required of the criminal law. Juries are perfectly capable of dealing with concepts such as "good faith", "impartiality" and "position of trust" when considering them in the context of a particular case, so these terms do not require definition.

The noble and learned Lord suggested that no mens rea was necessary in these cases, but that is not entirely correct. Clause 1 requires the prosecution to show an intention in case 1 and knowledge or belief in case 2, and Clause 2 requires the prosecution to show the recipient's intention in case 3. All those obviously have mens rea elements, but it is right that cases 4 to 6 in Clause 2 have no mens rea element. We share the Law Commission's view, which is endorsed by the Joint Committee that undertook the pre-legislative scrutiny, that the recipient's-R's-knowledge and intent should be immaterial to whether an offence has been committed in cases 4 to 6. Clause 2(7) makes this explicit.

R is the best person to understand the expectations to which he or she is subject. If R could avoid liability on the ground of lack of mens rea, it would create a significant grey area that might be exploited in cases in which the recipient was aware of the expectations that applied, as it would be much easier for the recipient to claim ignorance of the fact that his or her conduct constituted a breach of an expectation than it would be for a prosecutor to prove that the recipient was aware that it did.

I hope the House finds helpful the analogy of gross negligence manslaughter. A person can be convicted of gross negligence manslaughter regardless of whether they recognised that their conduct would amount to a breach of a duty to take care. The noble and learned Lord's boarding pass example is very similar to the experience of the noble Lord, Lord Swinfen, a few years ago, and to what has been described as a facilitation payment. We will discuss facilitation payments in our debate on the third group of amendments. The conduct to which the noble and learned Lord referred could be an offence under Clauses 1 and 2 because, as we said in Committee, we think it appropriate for minor cases such as this to be dealt with by prosecutorial discretion. However, I have no doubt that there will be more discussion about this type of case when we debate Amendment 5, which I hope we will come to shortly.

I will sum up the Government's response to the noble and learned Lord's amendment, and will of course give way if he wants to ask me a final question. He has his own views on this. I am grateful to the noble Lord, Lord Henley, for having clearly expressed his sympathy for his noble and learned friend's amendment, and for the fact that in the end he cannot support him on this.

We have looked at this on a number of occasions, and I hope that the House can make progress on the basis that it would be inappropriate for the Government to alter their course at this stage of the process, given the Law Commission's very firm recommendation and the Joint Committee's support for the improper conduct model, as reflected in Clauses 1 and 2. I know that these were probing amendments, so I am sure that the noble and learned Lord will not press them, but I think he may have a quick question for me.

Photo of Lord Lyell of Markyate Lord Lyell of Markyate Conservative 3:30 pm, 2nd February 2010

I am most grateful to the Minister. I do have a quick question. He referred to case 1 and case 2, in which:

"P offers, promises or gives a financial or other advantage to another".

If P "offers" and "promises", he is obviously initiating or playing a very active part in the criminal conduct. But if it has been demanded of him in circumstances which in ordinary language, although not probably in legal language, would be thought to constitute either extortion or duress, does he have a guilty mind when he gives it? If he had offered it, promised it and initiated it, I can see that. But is there not a distinction with giving it? As the Minister will confirm, unfortunately extortion, which has been removed from the statute book, nor duress, offers a defence.

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Ministry of Justice, The Parliamentary Under-Secretary of State for Justice

My Lords, I have to confess that it is a long time since I was involved in any case that involved the defence of duress. But I have no reason to believe-I am sure that I will be corrected very quickly by the Box if I am wrong because I do not want to mislead the House-that the offence of duress should not at least in theory be available to someone in the position posed by the noble and learned Lord.

Photo of Lord Lyell of Markyate Lord Lyell of Markyate Conservative

I believe that duress these days requires some kind of physical duress and does not apply to the circumstances of this case. I take this from others whom I very much respect in the criminal law.

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Ministry of Justice, The Parliamentary Under-Secretary of State for Justice

I apologise to the House: I was wrong. The noble and learned Lord is right on this point. But I, as it were, resort to prosecutorial discretion in alleged offences of this kind. If the accused, or the suspect, can maintain that considerable, unnatural pressure was put on him, no doubt that would be considered by the prosecutor in deciding whether a prosecution was appropriate. I was wrong about duress, which is available only in cases of death or physical injury. I am grateful for that information. This would be a matter for the prosecution to take into account. I have said all that I want to say on this amendment.

Photo of Lord Lyell of Markyate Lord Lyell of Markyate Conservative

We have much to deal with. I want to make only three short points. It is often said in academic discussions and by the Law Commission, for which I have great respect, that there have been inconsistent decisions on this. I have looked at all the cases and think that that is rather overstated. The DPP has told us in writing that this has caused no practical problems in the past 15 years and I believe that has been so for much longer. The Minister has explained that it is all down to prosecutorial discretion. My point, which I will not press now, is that that is not good enough. This is a serious offence. For the moment, I beg leave to withdraw my amendment.

Amendment 1 withdrawn.

Amendment 2 not moved.

Clause 6 : Bribery of foreign public officials

Amendment 3

Moved by Lord Henley

3: Clause 6, page 3, line 42, after "is" insert "improperly"

Photo of Lord Henley Lord Henley Shadow Minister, Justice

My Lords, I shall speak also to Amendment 4. These amendments have been tabled as a refinement to amendments tabled to Clause 6 in Grand Committee. They are intended to refer to the impropriety test that is present in the offences created by Clauses 1 and 2, which we have just been discussing. Clause 6 turns on the question raised by subsection (3)(b); that is, whether a payment by person P to a foreign official F constitutes a bribe depends on whether F was permitted or required by written law to accept a payment. There is no question of what motivated P or what his intention was beyond securing himself a business advantage. To put it briefly, to secure a business advantage is a normal and accepted practice, so long as it is legitimate and proper, as the Minister will well appreciate.

In Grand Committee and in our previous debate on the amendments in the name of my noble and learned friend, we looked at the meaning of the word "corrupt". My noble and learned friend again put forward a cogent argument. However, we on the Front Bench accept the conclusion of the Law Commission that there is a lack of clarity around what is meant by corruption.

I indicated in Grand Committee that we would be content for Clauses 1 and 2 to stand part of the Bill with the test of impropriety as the Government had drafted it. Even then, the noble Lord said that impropriety is readily capable of being understood by juries in the relevant context of the case without further deliberation. For that reason, we are happy with the notion of "improper" but we believe that it should be considered by the Government for inclusion in Clause 6.

The intention of P-the payer of the alleged bribe-ought to matter. I am concerned that it is not enough to say that all P must have intended was to secure some business or business advantage and that whether or not he is guilty of bribery rests on the interpretation of local written law. No question is asked about whether or not P was acting improperly but merely if the recipient official-F-went against what was permitted or required by written law. The Government have put forward the principle that P's ignorance of the local law should not be a defence, but will it always be possible to say exactly whether a local law was broken?

I return to the thorny question of hospitality payments. If, for example, a company was to entertain a foreign official in the process of demonstrating a product, a question might arise about what kind of hospitality should be given. If the foreign official's governing law stated that he may accept reasonable hospitality, would a case then be decided on how lavish-or, for that matter, how mean-the hospitality provided would be considered? In Grand Committee, my noble friend Lord Onslow, who is not in his place, posed the question of whether an all-inclusive trip to the Happy Eater would produce a different outcome from a trip to the Onslow Arms. That may seem a rather trivial point to make, but would not clarity be better achieved by examining what P intended in the first place? I should perhaps say O rather than P in the case of my noble friend Lord Onslow, but I shall leave it at P.

The situation may be more complex than the Government recognise in relation to the identification of exactly who is a foreign public official. For example, it is not immediately clear whether the phrase covers individuals in government-run or majority-owned businesses, or other categories of people who may fall under the ambit of that definition. As an illustration of that latter point, in the pharmaceuticals sector, to the extent permitted by local laws in each relevant country, companies operate in line with strict internal codes which usually observe global industry standards around the engagement of healthcare practitioners. In many countries, healthcare practitioners would come within the definition of a foreign public official. The Bill could therefore criminalise what is currently the honest, lawful, well intentioned promotional detailing of products to doctors in countries such as China, where healthcare practitioners will, for the most part, be employees of a state organisation. In these circumstances, a United Kingdom company could, therefore, not only commit a technical offence under this legislation but also be placed at a disadvantage as against foreign competitors.

In a letter on 14 January, the noble Lord, Lord Tunnicliffe, who I suspect will reply to the amendment, indicated-I believe that he has placed a copy of it in the Library-that the Government believe it is enough to,

"rely on prosecutors to differentiate between legitimate and illegitimate corporate hospitality and to decide whether or not it would be in the public interest to bring a prosecution".

However, the Government have not addressed the separate but related point about bona fide promotional expenses. A response that relies on prosecutorial discretion under the current wording of the clause may not be enough to address this shortcoming. It would not provide companies with the degree of certainty that we are looking to and that the companies require in the formulation of effective anti-bribery and corruption policies, or in the formulation of guidance to their managers and staff about legitimate practices. It is difficult to see how corporate policies could include advice to employees that something might or might not be technically legal, but may or may not be prosecuted.

I have raised a number of points which I should be grateful if the Minister could answer. My amendments would place the focus of prosecutors on the actions and intentions of P. Did he intend to get a business advantage by offering something to F? Undoubtedly; but is that bribery? It would be easier to find the answer by looking at what P was offering and at whether his offer was improper. If it was, he would then have had the improper intention to influence the foreign official, which would be bribery. I put it to the Minister that my amendments, or similar amendments if the Government were minded to look at them again in the drafting discourse, would bring a degree of consistency and certainty to the Bill. I beg to move.

Photo of Lord Tunnicliffe Lord Tunnicliffe Government Whip, Government Whip 3:45 pm, 2nd February 2010

My Lords, the two amendments tabled by the noble Lord, Lord Henley, seek to introduce an additional and, in our view, damaging qualification into the Clause 6 offence designed to deal with the particularly difficult and pressing problem of bribery of foreign public officials, especially those in developing nations, for commercial purposes.

Amendment 3 would require the prosecution to show that the defendant intended "improperly" to influence the foreign public official. Noble Lords will be well aware that the general offences in Clauses 1 and 2 are based on the concept of impropriety. The offence in Clause 6 is deliberately framed differently. Specifically, it quite deliberately avoids reliance on the concept of impropriety, as experience shows that a requirement of this kind creates a major obstacle to achieving successful prosecutions in this narrow category of case. I will come back to that later.

On a point of detail, unlike Clauses 1 and 2, the amendment offers no assistance to prosecutors or the courts as to what "improperly" is intended to mean in this context. That creates a danger that the courts would be pressed to consider subjective factors such as the defendant's state of awareness, knowledge of the local law or the existence of local customs that tolerate bribery when deciding whether the defendant's intent was improper. That is likely to lead to endless legal arguments and would completely undermine the policy intention behind the clause.

Amendment 4 would qualify the nature of the financial or other advantage offered, promised or given to the foreign public official by the defendant. Although the term "improper" here applies to the advantage rather than the defendant's state of mind, it would nevertheless have a very similar impact to Amendment 3.

These proposed changes to Clause 6 are unnecessary and damaging to its effectiveness. We are aware that criticism of the clause focuses on the view that the offence does not sufficiently describe what is properly regarded as corrupt conduct, because there is no requirement of impropriety or dishonesty. We do not accept this criticism. The offence requires the prosecution to prove that the payer intended to influence the official, otherwise described as F, in their capacity as a foreign public official. It is also necessary to show that the defendant intended to obtain or retain business or an advantage in the conduct of business. However, no offence will be committed where the written law applicable to F allowed F to be influenced by the offer, promise or giving of an advantage.

The offence is deliberately formulated so as to present a robust response that is commensurate with the gravity of the mischief towards which it is directed; namely, bribery on behalf of business interests in the developed world, seeking lucrative public sector contracts in the developing world. The offence is therefore drafted so as to prevent all but the written law of the state concerned from being a relevant consideration as regards the legitimacy of the payment. The reasons for this are twofold. First, we wish to avoid local custom and practice being a relevant consideration. If our Bill is to make an effective contribution to the efforts at the national and international level to encourage the developing world to abandon the culture of toleration of bribery we need to provide a robust deterrent. This offence is designed to fulfil that need by, among other things, preventing local customs and practice from being prayed in aid as a defence. Secondly, and extremely importantly, the experience of prosecutors working with the current law is that it is extremely difficult to pinpoint with sufficient certainty what duties or expectations apply to any individual foreign public official. Local circumstances vary immensely. The offence is therefore deliberately structured so as to avoid the need to show any improper conduct on the part of the official. Inserting a requirement of impropriety would negate the usefulness of having a specific offence at all.

In summary, the offence provides prosecutors with an alternative to a Clause 1 offence that is tailored to the very particular characteristics of this kind of bribery. The effectiveness of the offence for this purpose could be severely damaged by the introduction of a requirement of proof of impropriety. Indeed, it may render the specific offence worthless.

On the specific points about hospitality, Clause 6 applies only when the prosecution can prove beyond reasonable doubt that the person intended to obtain or retain business advantage and intended to influence the foreign public official in that capacity. In addition, the public official must be neither permitted nor required by the written law to be influenced in his or her capacity as a foreign public official by the offer, promise or gift. Thus if both forms of intent can be proved and no written law permits or requires a foreign public official to receive advantage, the receipt of corporate hospitality may amount to the commission of a Clause 6 offence by the company concerned, but that will be subject to prosecutorial discretion. As regards marginal cases of bribery, such as this, prosecutorial discretion provides the right balance; it would be a disproportionate response to provide a specific defence that will create additional ambiguity and certainty that could be exploited.

The noble Lord raised the specific issue of promotional expenses. Promotional expenditure is an important part of modern business practice and the Government are not seeking to restrict appropriate expenditure of this kind. Whether promotional expenditure will amount to an offence under Clause 6 will depend on the facts, but we accept that Clause 6 may catch some promotional expenditure. Promotional expenditure that is designed to explain and inform potential buyers of a commercial organisation's products may not involve the transfer of any advantages for the purpose of Clause 6. However, if, for example, benefits that might be regarded as hospitality are included within promotional expenditure, if the local law does not expressly permit or require the receipt of such benefits by officials, the expenditure may be caught by the Clause 6 offence. Whether such a case would proceed would be subject to prosecutorial discretion. We believe that as regards marginal cases this provides the right balance.

I hope that the explanations that I have given are appropriate. I think that we will come across the issue of prosecutorial discretion-

Photo of Lord Lyell of Markyate Lord Lyell of Markyate Conservative

Is this an area in which the Government propose to give guidance?

Photo of Lord Tunnicliffe Lord Tunnicliffe Government Whip, Government Whip

I cannot say that there is a specific decision on that at the moment, although I think that it is probable. Apparently, by magic means, I am authorised to say yes.

Foreign public officials are defined in subsection (5) to include individuals who hold legislative and administrative posts of any kind, whether appointed or elected. That includes individuals who work for international organisations. I hope that that is sufficiently specific and that the noble Lord feels able to withdraw his amendment.

Photo of Lord Henley Lord Henley Shadow Minister, Justice

My Lords, I am grateful to the noble Lord for his response. I am grateful that by a magical means he is able to get the answer to my noble and learned friend's question. It is quite right that the Government should offer guidance on a matter such as this if they are not prepared to take up my amendment and add the word "improperly". I do not quite know why the Government are worried by the word and suggest, if I have understood the Minister correctly, that it would introduce a degree of uncertainty into the matter and make it harder to get convictions. The word appears elsewhere in the Bill and the courts would have little problem with it.

I also note what the Minister had to say about prosecutorial discretion in the case of hospitality. We will welcome the guidance that will come in due course, because it is important for any business engaged overseas to know just what it can and cannot do and how that discretion will be exercised.

In explaining what a "foreign public official" was, the Minister simply seemed to direct me to Clause 6(5), which defines it. I was hoping for a little more from the Government by way of an explanation of what precisely that subsection meant, but I take it from what he said that the examples I gave-a doctor in China, for example, or, for that matter, a doctor here-would count as "foreign public officials" because it is a state-run scheme. Because he has not corrected me on that, I will just have to take that as an assumption.

The Minister has given me a partial answer. I am not entirely satisfied with it, but at this stage of the passage of the Bill it would not be worth seeking the opinion of the House so I beg leave to withdraw the amendment.

Amendment 3 withdrawn.

Amendment 4 not moved.

Amendment 5

Moved by Lord Henley

5: After Clause 6, insert the following new Clause-

"Facilitation payments

A person is not guilty of an offence under section 1, 2 or 6 if the offer, promise or giving of a financial or other advantage is-

(a) necessary to expedite a routine government action or to prevent damage to an important commercial interest;

(b) modest in amount;

(c) a single payment;

(d) customary in the situation; and

(e) the only reasonable option in the circumstances."

Photo of Lord Henley Lord Henley Shadow Minister, Justice

The amendment relates to facilitation payments. The issue was touched upon in our debates in Grand Committee, mainly in the context of British individuals or companies operating abroad. This new clause would give a defence to acts of bribery committed under Clauses 1, 2 or 6, although it may be most useful in relation to Clause 6 offences. Again, I do not intend to press this amendment to a vote. Among other considerations, I am fairly sure that the parliamentary draftsman might consider the drafting to be technically deficient. The Minister, however, may find this a useful opportunity to make clear the Government's position on these payments, which are, at the very least, ambiguous in their nature.

A clearer definition of what payments are illegal would mean that companies were better protected against extortion by public officials in foreign countries, and this could allow those companies to draw a clear line in the sand to stand behind. I tabled this amendment as part of our efforts to clarify provisions in the Bill and I look forward to hearing from the Government in due course.

What I have described as "facilitation payments" have been touched on in debates at previous stages. They might be regarded as payments made to ease a transaction that is already due to take place, rather than payments made to influence a decision to have a transaction in the first place. In the previous group of amendments we considered the intention of the payer, which we shortened to "P", and I asked noble Lords to consider the situation where P was making a payment quite properly-at least, as far as he was concerned. I accept that facilitation payments are on slightly shakier ground.

In most scenarios, so-called facilitation payments are regarded as bribes and are therefore illegal in almost every country. However, there may be situations in which an individual or company is placed in an invidious position where the official who ought to be performing a task is not doing so and that individual or company feels that by making a payment they are doing nothing wrong-or at least that they have no choice. I accept that such situations might arise in other countries, but I have related the amendment to domestic offences as well for completeness.

Noble Lords will be aware that certain types of payment in that sort of situation are allowed under United States law, or at least they would not be prosecutable. In the United States, facilitation payments are seen as a form of tip. There are conditions that must be satisfied for a payment to fall into the category of those that ought not to be prosecuted. My amendment attempts to summarise those conditions. First, the payment would be,

"necessary to expedite a routine government action or to prevent damage to an important commercial interest".

That means that a payment that is intended to alter the substance of an official's decision would not be covered by the amendment. But in a scenario where an official refuses to hand out a permit to which a person is entitled until the official has been given a sweetener, a person would have recourse to the defence.

An example of that second type might be the lorry driver trying to get a load of fresh fruit or vegetables through customs. If he is put in a long queue by customs officials and made to wait for days to the extent that he might lose the produce, he might reasonably feel that there is nothing wrong with giving a few dollars to that official-the few dollars that the official expects-to allow him on his rightful way.

The amendment contains other conditions. The payments must be "modest in amount". It must be "a single payment" not an ongoing chain of transactions. It must be "customary in the situation", and making a facilitation payment must be,

"the only reasonable option in the circumstances".

Those conditions are designed to reflect the difficult position in which a person might find himself, as in my example. It is not unrealistic to expect that an otherwise law-abiding person or company would feel that they had no option but to make a small payment to help things along.

I am obviously aware of the message that the Government and we wish to send out with this Bill that it is in no one's interest to encourage petty bribery and corruption. However, that might not be a useful thing to tell the lorry driver with a load of bananas whose fruit is rotting at the border because the customs officials have not yet been informed of that message that the Government and we are trying to get out in the Bribery Bill. I believe that the rule of thumb in the United States-again the noble Lord may be able to assist me on this-is to turn a blind eye to payments under, for example, $50, and consider them as tips. I understand why the Government may not wish to turn a blind eye to the practice and, as I said, this is not something on which I will test the will of the House this afternoon. However, will the Minister respond to those points by clearly laying out what approach the Government will take to small facilitation payments?

That may be a question purely for the prosecutorial discretion that we have heard about before, but, if so, what considerations will the prosecuting authorities take into account? A great many United Kingdom companies would prefer not to have the temptation to indulge in that kind of facilitation payment. They certainly wish to behave ethically. However, can the Minister inject any certainty into the debate that would give companies the reassurance that every situation will be dealt with practically and fairly on a case-by-case basis? I am seeking extra clarity from the Government in so far that the Bill extends to persons who may feel they have no option but to make payments in circumstances that amount to little short of extortion. I beg to move.

Photo of Lord Borrie Lord Borrie Labour 4:00 pm, 2nd February 2010

My Lords, my immediate reaction to the amendment proposed by the noble Lord, Lord Henley, is that I do not like it. If it were accepted, it would send bad messages that are quite different from the main point of the Bribery Bill. There are good intentions behind the amendment, but it would be damaging to key purposes of the Bill to allow all kinds of payments, honoraria, tips and all the rest of it that are of any significance and worthy of a prosecutor's interest.

If you look at the wording of the amendment, there is room for argument by the defence-if there was a prosecution-on almost any of these phrases. Proposed new paragraph (a) says,

"necessary to expedite a routine government action", and is concerned to,

"prevent damage to an important commercial interest".

What is important? What is routine? What is necessary? The amount must be modest, but in relation to what? Is that in relation to the total transaction or the earnings of the people involved? What is meant by "customary in the situation"? I am afraid that some kinds of facilitation payments may be customary but most undesirable. Whatever phrase you look at in this amendment, there are serious shortcomings. I am delighted to hear that the noble Lord does not wish to press the amendment. It is not at all worthy of pressing and could be most undesirable.

Photo of Lord Williamson of Horton Lord Williamson of Horton Crossbench

In the Joint Committee I supported the Government's position, as did the Joint Committee itself, that we should include these facilitation payments within the scope of bribery. Like others, I had some hesitation, but the reason for it is that we are introducing a ground-breaking Bill and we want to maximise its impact on bribery and its prevention. We also want to avoid exceptions as far as possible. That is an advantage and we should stick with it. I support the Government's position on this, as I did before.

On two earlier occasions-in the Joint Committee and in Grand Committee-we discussed this and I expressed some anxiety about what might happen on the ground. There will go on being facilitation payments; there is no way that we will stop those all over the world. American exporters have an advantage in being able to pay some such facilitation payments without any chance of prosecution. There are some problems on the ground. What do we have to do? In this case, we have genuinely to rely on prosecutorial discretion. We have discussed it rather a lot this afternoon, sometimes adversely and sometimes favourably, but this is a case where it should be applied. There will be some facilitation payments which are minimal and it would be ridiculous to prosecute them. The advantage of the overall coverage of these payments within the definition of bribery is greater than the slight problems that arise on the application of prosecutorial discretion.

Finally, like the noble Lord, Lord Borrie, I find that this is a gallant attempt by the noble Lord, Lord Henley, but the wording would give rise to difficulty. I expect many of us in this House are tempted to say that what is modest in amount for a banker's bonus is not modest in amount for most Members of this House. Such phrases are not easy to implement. It is, in any event, a probing amendment, but I have made my position on it clear.

Photo of Lord Condon Lord Condon Crossbench

My Lords, I understand and sympathise with the motivation for the amendment, but as a deputy chairman of a plc that operates in more than 100 countries with nearly 500,000 staff I want the Bill to give companies such as the one I am a part of absolute clarity and confidence in the guidance that they give to employees on corruption and bribery. While I sympathise with the motivation for the amendment, I support the comments of the previous two speakers. We should seek, with courage and confidence, clarity on these issues. Therefore, even though it is a probing amendment and I understand the motivation for it, I am unable to support it.

Photo of Lord Clinton-Davis Lord Clinton-Davis Labour

When we come to matters affecting criminal law, precision is vital. In this respect, the amendments that have been put down by the noble Lord, Lord Henley, do not meet the bill at all. Practitioners have to decide so many things, but they can decide only things which are within the law and which are precise. As I have said before, the noble Lord, Lord Henley, is right to withdraw this improper amendment.

Photo of Lord Lyell of Markyate Lord Lyell of Markyate Conservative

My Lords, I agree with every speech that has been made, which shows one of the difficulties of the Bill. I strongly support my noble friend Lord Henley in putting forward this measure as a probing amendment. He is trying to establish more clarity. I do not like the term "facilitation payments" any more than do the noble Lords, Lord Borrie and Lord Williamson of Horton. We want to try to keep away from that. However, I entirely agree with the noble Lord, Lord Condon, that his staff need clarity.

My noble friend has very sensibly tried to match closely the terms of this measure with what is permitted in America. I do not want us to go down that route, but there is a serious lack of clarity here. In the hospitality clause that we have just considered, the Bill states:

"P must also intend to obtain or retain-

(a) business".

Nobody gives hospitality in a business sense unless they are trying to do business, and if they are trying to do business, they must be trying to obtain or retain it. This is where great difficulty arises from the Bill's lack of clarity. I believe that this comes back, rather like my noble friend's amendments on "improperly", to what motivates the giver in this case. That is something to which we are closing our eyes in the Bill. I much look forward to hearing the Minister's answer. While I do not like the term "facilitation payments", my noble friend Lord Henley is right to try to get more clarity in this area. I wait with great interest to hear what the Government will give by way of guidance.

Photo of Lord Elystan-Morgan Lord Elystan-Morgan Crossbench

My Lords, there is very considerable unclarity in the amendment itself, but I have every respect for, and sympathy with, the motivations of the noble Lord, Lord Henley, in this matter. One point has not been made; namely, that there are treaty obligations here. The United Kingdom has subscribed to the OECD convention that seeks to prevent the corruption of foreign officials. Therefore, it seems to me that to a large extent we are governed by the structure of that convention in so far as the nomenclature of this clause is concerned. I am sure that this matter can be handled very properly by prosecutorial discretion. Indeed, we rely on that in so many areas of the criminal law. When I looked at the wording of paragraph (b) of the amendment, "modest in amount", I thought of that famous cartoon in Punch of about 100 years ago, when the housemaid says, "But it was only a very small baby", when charged with what was regarded as rather improper conduct.

Photo of Lord Blackwell Lord Blackwell Conservative 4:15 pm, 2nd February 2010

My Lords, I have not intervened before in this debate but, with the indulgence of the House, I should like to make a few comments on this amendment because it is important that the intent of my noble friend's amendments is considered seriously by the Government and the House although it is difficult to find the right wording. I draw attention to my various business interests.

The situation that we are talking about, as my noble friend Lord Henley described, is one where custom and practice locally may be that something equivalent to a tip is customarily paid for facilitation. The situation that we are thinking about is not one where that tip changes the outcome, nor one where it results in any improper outcome or improper change in behaviour, but a situation where withholding the customary tip, if you use that word, may lead to delay or obstruction. It is a commercial reality of much of the world that that is the situation that business deals with.

While, like the noble Lord, Lord Condon, I welcome clarity for businesses in the environment in which they operate, the law also has to be capable of being applied with common sense. My fear is that without some greater clarity around how these kinds of minor facilitation payments might be treated, it will not be capable of being applied with common sense to reflect the reality of commercial practices around the world. I am not in any way wanting to make an excuse for the retention of improper practices; I am very clear that I support the intent of the Bill. However, if the wording cannot be found to describe what is intended by my noble friend Lord Henley, I hope that in their response the Government can at least provide some clarity and guidance that will avoid situations being caught that are not intended to be caught by the Bill.

Photo of Baroness Whitaker Baroness Whitaker Labour

Does the noble Lord accept that a tip refers to something that is given after a service has been rendered? A facilitation payment or a bribe is given before the service is rendered so that it shall be more favourably rendered.

Photo of Lord Blackwell Lord Blackwell Conservative

I shall respond to the noble Baroness briefly. Of course a tip is normally given after the event, and therefore in that sense it is a strange use of the word. In the mind of the receiver, it is simply something supplementing the income that he receives for performing a service. In some cases, that is how it is regarded, even though it is paid in advance.

Photo of Lord Mackay of Clashfern Lord Mackay of Clashfern Conservative

The issue of facilitation payments was raised in the Joint Committee by the noble Lord, Lord Robertson of Port Ellen, with a particular example in mind and given to the committee. The noble Lord, Lord Borrie, said that he did not care for this amendment. I think that if he was in the position of the noble Lord, Lord Robertson's master, who was put in an extremely difficult position, he might have welcomed the amendment, ambiguous though it may be.

The real point is that the facilitation payment is in no way asking for anything improper to be done by the recipient. It is asking only because it is demanded that the recipient do what he or she is bound to do. The reason for asking for the facilitation payment is that the person who is asking for it is putting an additional condition into the entitlement of the person who is making the payment for getting what the person is entitled to in any event. It is under that kind of heading that facilitation payments have been discussed in the Joint Committee and here.

The example given by the noble Lord, Lord Swinfen, is just another of the same kind of thing. It is a situation in which the person paying the money is completely innocent, but is caught in a way that has produced this result for him or her. In the amendment, the situation is described as having no option. Another way of doing it would be to say, as I suggested for consideration at Second Reading, that a defence of duress might be introduced for this kind of offence. It would not be available apart from such an introduction.

The principle of the amendment, and what it is aiming at, whatever its imperfections in words-few of us could have drafted it better-are clear enough. The difficulty is that if you introduce facilitation payments and intend them to be covered you cannot talk about "corruption", "corruptly" or "dishonestly" as a general requirement of the offence of bribery, because the people who pay these facilitation payments are the innocent victims of other people's dishonesty.

The only justification that one can have for covering such payments is that it will be the only method available to us in this country of trying to root out a practice which, as the noble and learned Lord, Lord Cullen, says, is not altogether unusual in the world of commerce. That is the approach that the Government have embraced; so far, it has been endorsed by the Joint Committee and, I think I am right in saying, the majority of those who spoke on this subject in Grand Committee.

This is a wise policy. One has to take account of the OECD convention. The Americans have made an exception in respect of this sort of payment, and I suppose that it would be in our power to do that. We have chosen not to. We are deciding on an important point of principle in relation to the amendment, but in this matter the government point of view has justification.

Photo of Lord Tunnicliffe Lord Tunnicliffe Government Whip, Government Whip

My Lords, earlier in one's life one says: "Unaccustomed as I am to public speaking". On this matter, I have to say: unaccustomed as I am to speaking on behalf of the Government, with so much support from the Back Benches, I feel that many of the points on the generality have been very well made.

Perhaps I may first touch on the generality. I am not sure whether it was in Grand Committee or in a private briefing, but the noble Lord, Lord Williamson, made a point which goes to the root of this matter. This is a brave Bill. It is about being black and white. The Government stand by the fact that a facilitation payment is a bribe. That is what the Bill states and nothing that I will say can undo that. I shall say lots and lots about the amendment and prosecutorial discretion. Such discretion will be used to manage this in the real world, and I shall read words which try to amplify how that will apply. I shall also touch upon the issue of the tip or gratuity.

The Bill is in line with our treaty obligations and so on, but they move and are hardly that precise. We are doing this because we think that it is the right way to tackle bribery in international trade. We are tackling it quite openly in that way. I thank the noble Lord, Lord Henley, for putting down the amendment because, although obviously I shall criticise it, it has facilitated this useful debate and allows the Government to make their position on this matter unambiguous. I shall now make my formal speech, which is important to put on the record for the consideration of those to whom these laws will apply. I shall assure the House that the guidance that we have promised will include reference to facilitation payments.

The new clause proposed by the noble Lord, Lord Henley, seeks to create an exception for small-scale bribes paid to expedite action on the part of government officials or to prevent damage to an important commercial interest. The drafting of this proposed new clause serves only to underscore the undesirability of creating an exemption for facilitation payments. Under the proposed new clause, the defence would appear, for example, to relate to bribes paid to expedite routine actions on the part of foreign and domestic officials. It also uses terms such as "modest in amount", "customary in the situation" and,

"the only reasonable option in the circumstances".

These phrases are ambiguous and would invite endless legal argument. The amendment would have a seriously detrimental impact on the effectiveness of the Bill in combating bribery at all levels.

One key objective of the Bill is to contribute in a meaningful way to efforts at national and international level to bring about a change in culture away from bribery, which is so corrosive, particularly in developing economies. We recognise that many UK companies still struggle with petty corruption in emerging markets and other countries, facing regular demands for "facilitation payments" in circumstances that amount to extortion or something very near. The answer is to face the challenge head-on, not to create exemptions and defences like those of the United States' Foreign Corrupt Practices Act, which created artificial distinctions that are difficult to enforce and which have the potential to be abused.

In recognition of the need to reinvigorate efforts to combat facilitation payments, the OECD has recently issued a recommendation calling on member countries periodically to review their policies and approach to these small payments. Under the Bill, a payment, no matter how small, made to a foreign public official in order to facilitate the performance of that public official's function, and in order to secure an advantage in the conduct of business, will be a criminal offence unless the local written law permits the official to be influenced by the payment. The message needs to be clear and unambiguous: bribery, in whatever form and whatever the size of the payment, is a crime.

The House will be aware that all prosecutions in the UK are subject to review by independent prosecutors under the principles set out in the Code for Crown Prosecutors. Should a case involving a payment of this kind come to the attention of prosecutors, it will be subject to a review by a Crown prosecutor, who will apply both the evidential and the public interest tests. It will be typically the Crown Prosecution Service rather than the Serious Fraud Office that will review such a case, because the Serious Fraud Office operates a £1 million case threshold.

If in a review of a case the evidential test is satisfied, the prosecutor is duty bound to consider the public interest in prosecuting. As with all serious crimes, the general public interest in ensuring that bribery is effectively dealt with is a relevant factor, but prosecutors will also take into consideration countervailing factors. These might include the small nature of the bribe, the options facing the payer, whether it was a single or repeated incident, whether the bribe was solicited in circumstances that were tantamount to extortion and whether the court is likely to impose a nominal penalty. There may be good reasons why it may not be in the public interest to prosecute in particular circumstances, although I stress that this is a matter for the independent prosecutors and I cannot give any assurances in this regard. The point is that it is far better to keep the message of illegality clear and allow individual cases to be determined on the basis of a broad prosecutorial discretion than to put in place exemptions that at best create additional ambiguity and complexity and at worst undermine the general policy objectives of the Bill.

The new clause amply illustrates the difficulties that one faces when attempting to craft an exemption of this kind. Each of paragraphs (a) to (e) would introduce an element of doubt and uncertainty. What, for example, would "an important commercial interest" cover? A relatively large payment may be "modest" in the context of a commercial interest of high value. How would the importance of the interest be assessed? Would it be a snapshot of the importance at the time of the bribe or could long-term implications be taken into account? As regards "customary in the situation", our policy, as enshrined in Clause 5(2), is to exclude local custom from the assessment of impropriety for the purposes of Clauses 1 and 2. The extent to which a practice is customary should have no place in a Bill seeking to change the culture away from bribery. Finally, the extent to which a payment may be "reasonable" would, without further definition, be open to entirely subjective interpretation. The overall effect of the proposed defence could be to create a potentially wide exemption that would be vulnerable to unmeritorious exploitation.

I was asked the extent to which a tip may be looked on as a bribe. A gratuity is not a bribe; it is usually paid as thanks for the proper performance of functions. Conversely, a bribe is paid in anticipation of, or in reward for, improper performance of functions. The foreign public official offence requires that a payment is made with the intention to influence an official and to obtain business or a business advantage. Therefore, payment made to an official after the fact, intended to express thanks for the performance of his functions, may not give rise to liability under this clause if the required intent is not present.

I turn to the factors that would influence the decision. I do not propose to rehearse the whole of the guidance in the Code for Crown Prosecutors but the commission of a serious offence that would, on conviction, attract a long term of imprisonment would, all things being equal, suggest very clearly that the public interest lay in prosecuting. On the other hand, factors such as the likelihood of a minor penalty would weigh in favour of discontinuance. Another relevant factor might be the cost to the public purse of prosecution.

By way of illustration, a case of bribery overseas involving a small facilitation payment might involve considerable investigation and co-operation with the authorities of a foreign state in order to secure a conviction that would attract a minor financial penalty or conditional discharge. In such circumstances, one could understand that the making of a small "facilitation payment", extorted in return for the performance of an administrative function by an official in a foreign country, might not give rise to sufficient public interest in a prosecution. Another relevant factor might be where facilitation payments had been paid in response to a physical threat to the health and safety of a company's employees. While a threat of commercial damage does not provide a defence in cases of bribery, the prosecuting authorities are likely to take into account any element of extortion when considering where the public interest lies.

With those statements, I hope that the noble Lord will feel able to withdraw his amendment.

Photo of Lord Henley Lord Henley Shadow Minister, Justice 4:30 pm, 2nd February 2010

My Lords, after the almost universal support that I have received for my amendment in a charge led by the noble Lord, Lord Borrie, and followed by others, I am almost tempted to press it to a Division. However, given that I said that it was merely a probing amendment, a probing amendment it shall remain, not the improper amendment that the noble Lord, Lord Clinton-Davis, described it as.

Having said that, I think that this has been a very useful debate. It has been worth while getting on the record the Government's views about the Bill and its purpose. Although most speakers attacked my amendment, I could sense among them a number of realists who recognise that there is a genuine problem for the driver of the lorry containing the bananas-namely, that the bananas are likely to go off and there is not much that you can do with them when they do go off. No doubt there are other fruits that can be made into jam, but I am not sure that you can do much with bananas. After saying what a useful debate we have had, the Minister said that we must face the problem head on. I accept that. However, again I make the point that in facing the problem head on we will have to accept that there are problems for the driver of the lorry containing bananas.

I am grateful for the help that the Minister gave regarding the guidance on the prosecutorial discretion that the CPS-it will be the CPS that deals with these lower-grade offences-will have to exercise. I am particularly grateful that he was so keen to put across the factors that it should take into account that he took us through them twice. No doubt we now have on the record the matters that the CPS will take into account. I hope that that has been useful to those outside who will have to make use of the Bill in giving advice to their employees in due course. I also hope that these matters will again be considered by the Government when they ultimately offer guidance on the proper practice of the Bill. I think I can say that I, too, am a realist in terms of the amount of support that I have received for the amendment. As I said at the beginning, it was purely probing and has been very useful but, at this stage, I beg leave to withdraw it.

Amendment 5 withdrawn.

Clause 7 : Failure of commercial organisations to prevent bribery

Amendment 6

Moved by Lord Henley

6: Clause 7, page 5, line 4, leave out subsection (1) and insert-

"(1) A relevant commercial organisation ("C") is guilty of an offence under this section if-

(a) a person ("A") associated with C bribes another person,

(b) the bribe was in connection with C's business, and

(c) a responsible person, or a number of such persons taken together, was negligent in failing to prevent a bribe."

Photo of Lord Henley Lord Henley Shadow Minister, Justice

My Lords, I shall speak also to Amendments 7, 8, 9 and 11. We have now reached Clause 7, which requires that businesses must have procedures in place so that their employees and agents do not commit bribery. We welcome that, as do most if not all businesses. It is right that businesses should play an active role in combating bribery and that companies should not turn a blind eye to corrupt practices.

We seek a further explanation of the way in which companies will be held to account. Amendment 6 would remove the strict liability of the offence in Clause 7 and instead return to the test of negligence, which appeared in the draft legislation some time ago, if noble Lords can remember as far back as that. Amendment 6 is similar to Clause 5(1) of the draft Bill. I am aware that the opinion of the Joint Committee was in favour of the strict liability test, and I have returned to it as one of the options that may address the concerns that many in the business world have about Clause 7. Other options are contained in Amendments 7, 8, 9 and 11, to which I will also speak.

Amendment 6 would penalise companies if they have been negligent. Such an approach would require active monitoring of the companies' dealings, but would not necessarily lead to corporate conviction in the event that an employee or agent committed the offence of bribery. Under the Bill, as presently drafted, the company would automatically be guilty of an offence unless it could raise a defence. I shall deal more with that defence in a moment, but I shall concentrate first on the mechanism of using the defence. Currently, the burden of proof lies with the company: it must raise its defence and prove it. In most circumstances, the defendant need merely raise the defence and it is the prosecution's job to disprove it. Amendment 8 is intended to reverse the burden of proof on to the prosecution. I should be grateful for an explanation why the Government feel that a reverse burden of proof is suitable in this case.

Amendment 9 returns to a previous debate on the meaning in subsection (2) of "adequate procedures". It would replace that phrase with "reasonable procedures". Amendments 7 and 11 cover similar ground, which is the relationship that a company has with its associated person-who commits the bribery-and the degree of control over the associate, in particular whether adequate procedures can take into account a reasonably distant relationship.

The Minister will know that businesses are uneasy with Clause 7, and it is largely for that reason that he conceded that guidance must be necessary, which we shall debate shortly. However, even if detailed guidance is produced, the structure of Clause 7 still merits debate. I still have concerns that I expressed in Committee that "adequate" is not perhaps the best word to use in subsection (2), which provides for the corporate defence of having adequate procedures in place. The word "prevent" is used in that subsection. It may be possible, on a narrow reading of the Bill, that if bribery had been proven to have occurred, the procedure could not have been adequate and therefore the defence must fail. I am sure that a narrow reading of that subsection is not what the Government intended and an explanation of why "reasonable"-a word well understood by the courts-is not employed would be welcome. Courts understand the concept of reasonableness, as do companies.

The addition of the phrase "in all the circumstances" in Amendment 7 allows for account to be taken of the different dynamics that relate to sector, size of company and risks associated with markets. That may help to address the concerns over the offence being fair and proportionate both for large companies and small and medium-sized enterprises. It would also see that due regard is paid to the facts and circumstances surrounding the relevant bribery offence referred to in subsection (1).

In addition, I suggest that Amendments 7 and 11 may go some way towards addressing the fact that the Bill does not take due account of, nor can it properly cope with, the reality of the variety of corporate structures-something that the Minister will understand. That is particularly the case with joint ventures in all their forms-project work, construction, the extractive industry and the financial sector-where control and influence in those arrangements may vary considerably. It cannot be right that a business finds itself criminally liable where it has little, limited or no ability to influence or control its partners.

That is not to say that United Kingdom businesses fail to exercise the influence that they can within the constructs of their contractual or business relations. I am aware that the CBI, among others, is extremely concerned that failure to realise and act on those concerns will have a serious detrimental effect on United Kingdom competitiveness, not just in terms of existing arrangements but of potential future business.

I accept that the Government's concession that guidance is necessary will do much to allay our concerns about Clause 7. However, we have yet to see the guidance. It is unlikely that we will see it before the Bill leaves your Lordships' House-only next Tuesday, as I remember. Until we know what the Government are thinking of for that guidance, we need to ask them to consider the points that I have raised about the drafting of Clause 7 and how it is intended to operate, and to offer some reassurance that the Minister and his officials have carefully thought through all the ramifications. I beg to move.

Photo of Lord Goodhart Lord Goodhart Liberal Democrat

My Lords, it is about time that we on these Benches came into the battle.

The noble Lord, Lord Henley, started by dealing with Amendment 6. In my view, it would be a wrecking amendment if it were ever adopted. As the noble Lord said, it takes us back to Clause 5 in the draft Bill as presented for pre-legislative scrutiny. The Joint Committee unanimously rejected that clause. The principal reason for that was that if any prosecution has to identify a single individual or a number of specific individuals who were negligent in failing to prevent bribery, it would make it almost impossible to obtain a conviction.

The failure to prevent bribery is much more likely to be due to the failure of the management or board of directors as a body to take proper steps to prevent bribery. Bribery, or the absence of any objection to bribery, is more often due to the slackness of the company as a whole rather than to any negligence that can be tied to specific directors or managers. In many cases, it may be clear that the company has failed to take proper steps to stop bribery and deserves punishment for that failure, but the evidence of negligence by any one individual director or manager cannot be proved beyond reasonable doubt, so there will be no conviction. Therefore, if the amendment is passed, one of the central purposes of the Bill will be destroyed and the Bill will become unacceptable as meeting the duties of the United Kingdom to try to reduce the dangers of bribery across the world.

Amendment 8 is not quite a wrecking amendment, but it is not far off it. Without Amendment 8, a company has to prove that it has adopted adequate procedures. Since all the relevant information will be in the hands of the company, and it only has to prove that on the balance of probabilities, requiring the company to prove that is fair enough. However, if this amendment is accepted, the prosecution will have to prove beyond reasonable doubt that the company has failed to adopt reasonable procedures. That will again make it extremely difficult to get effective convictions. Perhaps there would be a few more than if Amendment 6 were adopted, but not many more.

Amendments 7, 9 and 11 are less seriously damaging to the Bill, but I nevertheless oppose them. Amendment 7 states that,

"it is a defence for C to prove that C had in place reasonable procedures in all the circumstances, including taking into account the extent of C's influence over A".

That is unsatisfactory because one of the jobs that C-the company-must carry out is to make sure that it exercises influence over its agent and does not employ or hire agents it cannot control. Those words, and the similar words in Amendment 11, are unacceptable. On the question of whether "adequate procedures" should be replaced by "reasonable procedures", I have very little to say. This is an important group of amendments and, by and large, they are a considerable threat to the effectiveness of the Bill.

Photo of Lord Thomas of Gresford Lord Thomas of Gresford Shadow Attorney General 4:45 pm, 2nd February 2010

My Lords, as no other noble Lord wants to say anything, perhaps a second speech from these Benches will not be inappropriate. I shall focus on Amendment 8, which deals with the transfer of the burden of proof. Noble Lords should consider the practicalities. The prosecution would have to prove that a bribe had taken place by someone associated with the company, but would then have to carry out an extensive investigation into that company, its management structure and its procedures in order to prove that they were inadequate. It would be an enormous burden to place upon the investigating authorities. On the other hand, the company faced with a charge of failing to prevent bribery has the procedures at its fingertips and can bring them forward and establish that they are adequate. As I shall say at a later stage tonight, if a company had the advice of an advisory service about whether its procedures were adequate, it would assist it in putting forward that defence.

Photo of Lord Tunnicliffe Lord Tunnicliffe Government Whip, Government Whip

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.

Photo of Lord Henley Lord Henley Shadow Minister, Justice

My Lords, this is another group of amendments which did not exactly attract universal support. But I suppose I could say that anything that provokes two such fine speeches from the Liberal Benches cannot be all bad. I will try it again some time. I am grateful to the Minister for his explanation, which was more or less as I expected. I never had any intention of pressing this amendment, but it was useful for the Government to make those comments in the Chamber rather than in the Moses Room. It was a matter worth pursuing at this stage. I beg leave to withdraw the amendment.

Amendment 6 withdrawn.

Amendments 7 to 9 not moved.

Amendment 10

Moved by Lord Tunnicliffe

10: Clause 7, page 5, line 16, at end insert "and see section (Guidance about commercial organisations preventing bribery) for a duty on the Secretary of State to publish guidance"

Photo of Lord Tunnicliffe Lord Tunnicliffe Government Whip, Government Whip

My Lords, these amendments concern Clause 7, which introduces a new offence of failure of a commercial organisation to prevent bribery. A commercial organisation will be guilty of the offence if a person associated with the organisation bribes another person intending to obtain or retain 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 in place adequate procedures designed to prevent persons associated with it from undertaking such conduct.

We have made it clear, in response to the Joint Committee that considered the draft Bribery Bill and subsequently, that we agree that guidance should be available to commercial organisations. We are committed to publishing such guidance well in advance of the coming into force of Clause 7. It was clear from our debate in Committee that many noble Lords did not consider such an undertaking to go quite far enough. Clearly, no Government can bind their successor and I can understand that there might be nervousness on the part of the business sector that guidance may not, in the event, be available to them. Having listened to the arguments, we are content to include in the Bill a requirement on the Secretary of State to publish guidance.

Our approach is to place a duty on the Secretary of State to publish guidance on what procedures commercial organisations can put in place to prevent bribery. We have also included provision for the guidance to be updated from time to time at the discretion of the Secretary of State. Our new clause will also require the Secretary of State to consult Scottish Ministers before any guidance is published. That is important, as the guidance will relate to the prevention of bribery by commercial organisations operating in Scotland as well as other parts of the United Kingdom. We remain of the view that any guidance should not be prescriptive. It is not the role of the Government to provide guidance for commercial organisations on how to resist a criminal charge or to provide, in essence, a tick-box approach for organisations on how to stay within the law.

As I mentioned in Committee, the Ministry of Justice and the Department for Business, Innovation and Skills have been working closely with business groups and non-governmental organisations to come up with a set of key anti-bribery principles that will form the basis of our guidance document. Preparation of the guidance in discussion with a group of stakeholders is ongoing and, to be fair to them, we should give them an opportunity to consider a first draft before we circulate it more widely. However, we expect the guidance to describe the new offence and the adequate procedures defence. We also expect that it will set out a number of key principles that, if adopted by commercial organisations, would go a long way towards preventing bribery. These principles, which we anticipate will be considered in more detail in the latter parts of the guidance, are expected to focus on the responsibility of an organisation's board of directors to design, implement and regularly review policies for preventing bribery within that organisation.

I can assure the House that we remain committed to publishing the guidance well in advance of the Act coming into force. I trust that these government amendments will be welcomed. I beg to move.

Photo of Lord Goodhart Lord Goodhart Liberal Democrat 5:00 pm, 2nd February 2010

My Lords, I am extremely grateful to the Government for the amendments that they have brought forward. The Joint Committee heard a great deal of evidence on the importance of providing guidance, particularly in view of the fact that under the Bill as it now is there is strict liability, subject only to defence arrangements on the basis of adequate procedures. I am glad that the Government have recognised this because, without the guidance, business companies would be uncertain as to what would or would not be a breach of the strict liabilities. It is essential, therefore, that the guidance is provided for in the Bill. The Government promised originally that they would produce guidance before the Bill came into force, but it is better still that the guidance is required in the Bill. That is important. It will certainly help to support those British business organisations on which the Bill imposes considerable new duties. The inclusion of a requirement for guidance is an essential part of the Bill and I am pleased that the Government have introduced it.

Photo of Lord Williamson of Horton Lord Williamson of Horton Crossbench

My Lords, I support the amendments. It is easy to forget that at an earlier stage, while there was a wide measure of agreement that we needed guidance, there was not an agreement on the Government's part that such guidance would be provided for in the Bill. However, many people wanted such a requirement in the Bill and it is now in the Bill. For the reasons advanced by the noble Lord on the Liberal Democrat Benches, that is a big advantage and the Government have acted correctly.

Photo of Lord Mackay of Clashfern Lord Mackay of Clashfern Conservative

I welcome the amendment. It is vital that this should be in the Bill and take the form of a duty to issue guidance, which will continue on successive Governments as long as the Bill is in place. Faced with the far-reaching consequences that the Bill could have for operations, particularly overseas, industry is right to expect the kind of guidance that it can rely on in the face of its obligations under the Bill. I am grateful that the Government have chosen now to put this in the Bill.

Photo of The Earl of Onslow The Earl of Onslow Conservative

My Lords, we learnt in Committee that the Americans provide guidance in their system and it was that which convinced me that we ought to as well. I hope that the Government will look at the American guidance and make sure that the guidance issued by all major economic powers is as closely linked as possible so that people cannot drive even Cinderella-like coaches between it. It is important that this approach should be dealt with on as broad a basis as possible.

Photo of Lord Henley Lord Henley Shadow Minister, Justice

My Lords, I join other noble Lords in thanking the Government for bringing forward this concession. They were quite right so to do after our debate on this matter in Grand Committee. Going back further, I think that it was at Second Reading that the Minister, the noble Lord, Lord Bach, said that there was a need for guidance "well in advance" of the Bill coming into force. The noble Lord, Lord Tunnicliffe, gave an assurance in Grand Committee that the Government would produce,

"a revised statement of the things that will be going into that statutory guidance".-[Official Report, 7/1/10; col. GC56.]

I interpreted that as being a draft of a draft. It is obviously too late to see something before the Bill completes its passage through this House, but while it is in another place the Government might think it appropriate to produce something, even if it is only what I described as the draft of a draft.

I think that I heard the Minister correctly when he said how important it is to consult, but, again, I would be grateful for an appropriate assurance that, before publishing the final guidance, rather than the draft of a draft, the Government will consult fully all the appropriate businesses or even, as the Minister put it, all stakeholders. Having said that, I welcome what the Government have put forward.

Photo of Lord Tunnicliffe Lord Tunnicliffe Government Whip, Government Whip

My Lords, we were pressed on the issue of a draft of a draft. Given the general support for the amendment, perhaps I do not need to detain the House by talking about it but, since I have been half-invited to do so, I shall.

It is our intention that our first draft should form a basis for discussion with stakeholders. Our work to date has been largely a research and information-gathering exercise, in which we have gratefully received help from a number of quarters, including our business stakeholders and NGOs. A wealth of material exists, so this stage of the development of guidance is bound to take some time. It is important, as I am sure all noble Lords will agree, that we ensure that we have the benefit of a comprehensive survey of existing guidance.

I can indicate today the current proposals on the content of structured guidance, which will obviously be subject to continuing development and discussion. We envisage the guidance containing a section dealing with the legal background and detailing domestic and international obligations. Our research indicates that it may be useful to offer a section setting out broad principles for the prevention of bribery, such as I referred to in the paper that we circulated before Committee, to be elaborated in further sections. Examples of the principles that we think the guidance should contain include the importance of the board of directors taking responsibility for anti-corruption programmes and appointing a senior officer accountable for oversight; assessing risk specific to the organisation, which might include risks linked to the nature or location of the organisation's activity; establishing clear employment procedures and training of new and existing staff in anti-bribery procedures; having internal financial controls and record-keeping to minimise the risk of bribery; and establishing whistleblowing or speak-up procedures so that employees can report corruption safely and confidentially.

We envisage that later sections of the guidance will cover, for example, what organisations can do to plan, implement and monitor anti-bribery policies. These sections are likely to deal with how organisations might ensure that policies cover risks specific to the organisation concerned-for example, by looking at those of its operations that are particularly susceptible to bribery because of the nature of the supply chain or location in which they are carried out. Organisations might also have documented policies through a board-level statement, code of ethics or strategy document, as well as gift and hospitality registers.

Other topics may include how organisations might embed their anti-bribery programmes into their administrative structures and ensure that employees, particularly operational staff, understand the new policies through effective communication and training. Special cases, such as facilitation payments and corporate hospitality, will be covered specifically, as will challenges faced by organisations when seeking to put into place measures designed to deal with the risk of bribery on their behalf by subsidiaries and other organisations with which they are associated in a joint venture. It may be useful to include a section detailing further useful reading materials-guidance published by the Serious Fraud Office, by business groups such as the ICC and by NGOs such as Transparency International and the Institute of Business Ethics.

These are examples of our current proposals for guidance. It is a work in progress and our discussions will continue in earnest with a view to producing a working draft in the near future. I hope that that has been helpful to the House.

Amendment 10 agreed.

Clause 8 : Section 7: supplementary provision

Amendment 11 not moved.

Amendment 12

Moved by Lord Bach

12: After Clause 8, insert the following new Clause-

"Guidance about commercial organisations preventing bribery

(1) The Secretary of State must publish guidance about procedures that relevant commercial organisations can put in place to prevent persons associated with them from bribing as mentioned in section 7(1).

(2) The Secretary of State may, from time to time, publish revisions to guidance under this section or revised guidance.

(3) The Secretary of State must consult the Scottish Ministers before publishing anything under this section.

(4) Publication under this section is to be in such manner as the Secretary of State considers appropriate.

(5) Expressions used in this section have the same meaning as in section 7."

Amendment 12 agreed.

Amendment 13

Moved by Lord Thomas of Gresford

13: After Clause 8, insert the following new Clause-

"Advisory service

(1) The relevant government department may respond to specific enquiries from any commercial organisation concerning the adequacy of its procedures for the purposes of section 7(2) of this Act.

(2) A response under subsection (1) shall not prevent the Director of Public Prosecutions, the Director of the Serious Fraud Office or the Director of Revenue and Customs from consenting to proceedings for an offence under this Act."

Photo of Lord Thomas of Gresford Lord Thomas of Gresford Shadow Attorney General

In Committee, I pointed out the value to the business community both in Hong Kong and the United States of an advisory service. I mentioned in particular that in Hong Kong the advisory service group of the Independent Commission Against Corruption has given specific advice to some 3,000 firms over a period of time since 1985, which amounts to something like three times a week. I very much welcome the Government's Amendments 10 and 12, which have just been passed. In the absence of a draft, I expected the Minister to say that the guidance that was to be issued by the Government was to be broad principles. However, I think that I detected in what he said that there was to be specific advice to specific organisations. The Minister is shaking his head, so perhaps I did not quite hear properly. I am sure noble Lords will agree that it was not too easy to follow every word that the Minister said on that occasion. But if that is not the case, it is right for me to pursue this amendment.

A company with a problem-for example, one with legitimate promotional expenditure-should have a government department or unit, probably within the business ministry, to which it could go for advice. It would not bind what it was doing or the prosecutorial authorities if it overstepped the mark, but at least it would bring certainty. I was encouraged when I read the parliamentary briefing of the CBI today, which welcomed my amendment as creating,

"a procedure that will add considerably to the authoritative nature of the guidance and therefore assist in giving business the certainty that it seeks in the way the offences will operate in practice".

Photo of Lord Clinton-Davis Lord Clinton-Davis Labour

What is the present procedure? As far as I recall from practice, if one telephoned for guidance about the issue, it would usually not be met with a downright no. The department is usually very efficient in saying what can and cannot be done.

Photo of Lord Thomas of Gresford Lord Thomas of Gresford Shadow Attorney General

I am most grateful for that intervention, which makes the point that I am trying to make. These days, one would probably be sent from pillar to post in a series of telephone calls. There should be a particular unit that would build up expertise over time and have an overview of the procedures that were being adopted nationwide and could give very good, informed advice. There would be a point to which the particular company seeking that advice could go. Noble Lords should remember that I am dealing with adequate procedures in my amendment. As the noble Earl, Lord Onslow, pointed out, in the United States it is possible for an American company to obtain clearance from the Department of Justice for just this sort of thing. I recognise that in this country it would not be appropriate to go to the Director of Public Prosecutions or the Serious Fraud Office and ask for advice when they might be the prosecuting authority in due course, but a unit within the business ministry could build up an overview of all the procedures that were available and advise a company on its specific procedures. I beg to move.

Photo of Lord Mackay of Clashfern Lord Mackay of Clashfern Conservative

My Lords, I understood from the noble Lord, Lord Thomas of Gresford, in Committee that in fact the business ministry has some such advisory service, about which he asked a question. I have not yet heard what answer he received.

Photo of Lord Thomas of Gresford Lord Thomas of Gresford Shadow Attorney General

I did not receive an answer, other than to ask me why on earth I was asking the question.

Photo of Lord Pannick Lord Pannick Crossbench

My Lords, I am unclear about the extent of this provision. Subsection (2) of the new clause makes clear that the response shall not prevent a prosecution from being instituted, but I am unclear whether it is the intention of the proposed new clause whether the company should be allowed to rely on the response in seeking to establish, if it is prosecuted, that it had adequate procedures. I am also unclear whether it is the intention that the company may rely on the specific response, as it may wish to do, in contending that the prosecution is an abuse of process.

Photo of Lord Thomas of Gresford Lord Thomas of Gresford Shadow Attorney General

Again, I am grateful for the intervention. It would be an evidential matter in the trial. Bearing in mind that the burden of proof is upon the company to show that it has adequate procedures, it would be a question of evidence in the case that the company had gone to the unit that I suggest and had obtained advice, and that it was relying on the advice that it had received. If that were the case, it would be quickly apparent whether any potential offence had been committed by the company, were the proceedings ever to be brought, if it could say in a letter to the prosecuting authority, "Well, we asked for advice, we got it and we followed it". I would imagine that, save in the most exceptional case, that would prevent a prosecution. I hope that that assists the noble Lord.

Photo of Lord Henley Lord Henley Shadow Minister, Justice

My Lords, I express a degree of sympathy for the noble Lord's amendment. There is something in this, although whether it needs to be in the Bill is another matter.

As the noble Lord introduced his amendment the noble Lord, Lord Clinton-Davis, asked why a company could not go to the department as it is at the moment. However, as we all recognise, the problem is knowing how to go to the department and what telephone number to call. As the noble Lord, Lord Thomas, said, one would be sent from pillar to post-we all know that experience of certain Governments. I rather recommend the approach that the noble Lord is putting forward of some body within the department, whatever the appropriate department is, rather than a more expensive stand-alone body that would not have our support.

I have one brief question for the Minister and I should be grateful for an answer. The noble Lord, Lord Thomas, said that he did not think that the Serious Fraud Office, as a prosecuting authority, was an appropriate body to be offering advice, but my understanding is that it already offers some advice and has been running a programme of engagement with corporate bodies to encourage the self-reporting of past misdemeanours. I understand that the SFO offers this as part of the advice for businesses on how to approach it. Could that service be expanded into a general body or do the Government, like the noble Lord, Lord Thomas, feel that that would not be appropriate? I should be grateful if the Minister could address that point.

Photo of Lord Clinton-Davis Lord Clinton-Davis Labour

I have found the department to be very helpful whereas the impression that has been conveyed today is that people are driven from pillar to post. That has not been my experience. On the other hand, the issue should be clarified. In that respect, the point raised by the noble Lord, Lord Thomas, is meritorious.

Is it not possible to address this point in the guidance? Clarification is important because I am sure that this House would not wish to arrive at a position where there was any uncertainty. People who telephone the department are entitled to a reply. The noble Lord, Lord Thomas, has made a very good point. People seeking information and advice should address a particular point in the department and should not be driven from pillar to post. Although I do not think that that has happened, it should be avoided.

Photo of The Earl of Onslow The Earl of Onslow Conservative

My Lords, it would be incredibly simple to fix this. The guidance could be written out and it could say at the bottom, "For advice ring Whitehall 1234", and you would get straight through to the department that has written the guidance. That seems to be an extremely easy way of solving these matters-or perhaps it is too optimistic and naive to think that that could ever be possible.

Photo of Lord Tunnicliffe Lord Tunnicliffe Government Whip, Government Whip

My Lords, I apologise to the noble Lords, Lord Goodhart, Lord Williamson, Lord Borrie and Lord Henley, the noble and learned Lord, Lord Mackay, and the noble Earl, Lord Onslow, for not thanking them for their contributions in the previous debate. It was the pressure that we received from those noble Lords in Committee that led to our change of heart. I have particularly enjoyed some support so far this afternoon from those on the Liberal Benches. However, now is the time to be honest and say that, grateful as I am, I am not able to indulge a movement as far as they are requesting.

The new clause suggested in the amendment of the noble Lord, Lord Thomas, touches on many of the same issues addressed in the previous group of amendments. On the duty of the Secretary of State to publish guidance in relation to Clause 7 and, in particular, the defence in subsection (2), it is important to draw a clear distinction between the role of government and that of the courts and the independent prosecuting authorities. I cannot stress too highly that it is not the role of government to determine whether any procedure is "adequate" for the purposes of subsection (2) of Clause 7, either as a general response or in response to a specific request from a commercial organisation. The determination of that issue is one for the courts alone in the context of individual criminal proceedings.

That position nevertheless leaves the Government free to fulfil the entirely different and appropriate role of issuing guidance to commercial organisations to assist them in understanding what anti-bribery practices and procedures may be effective and in deciding which of those they may wish to put in place, depending very much on their size, market and assessment of the risk of bribery in their particular circumstances.

In many respects, the scheme envisaged by the noble Lord, Lord Thomas, represents a hybrid version of the schemes provided by the US Department of Justice and the Independent Commission Against Corruption in Hong Kong. The Joint Committee on the draft Bribery Bill considered the pros and cons of introducing a scheme along the lines of those operating in the United States and Hong Kong. Although the Joint Committee heard evidence from a number of witnesses from the business community in support of an advisory service and acknowledged that such schemes could have benefit, it rejected the idea on the grounds that it would be incompatible with our system and in particular may prejudice the independence of prosecutors.

Photo of Lord Thomas of Gresford Lord Thomas of Gresford Shadow Attorney General

Would the noble Lord also agree that the Joint Committee said that it had not been given sufficient time by the Government to investigate this issue?

Photo of Lord Tunnicliffe Lord Tunnicliffe Government Whip, Government Whip

My Lords, I would not dream of gainsaying the noble Lord, Lord Thomas, in his recollection of the report. Nevertheless, we believe that the Joint Committee took that view. We are certainly clear that we are of that view.

Moreover, it is difficult to see how much comfort such an advisory service could provide to businesses. The proposed new clause itself acknowledges this in the caveat in subsection (2). The amendment fails to recognise that advice given in isolation may be of little practical value. When a prosecutor or court considers the adequacy of procedures in an individual case, the exercise will be conducted by reference to the circumstances of the organisation, the facts that constitute the original offence committed by the person associated with the organisation, and all surrounding circumstances. It would not, therefore, be possible-even if it were appropriate to do so-to offer with any certainty any assessment of the adequacy of particular procedures in isolation from all the relevant facts. Quite apart from our belief that it would be wrong in principle for a government department to provide such advice, any advice that could be offered would-

Photo of Lord Clinton-Davis Lord Clinton-Davis Labour

Does this happen at present, or has it in the past? Informal advice is often given, is it not?

Photo of Lord Tunnicliffe Lord Tunnicliffe Government Whip, Government Whip

My Lords, I will come briefly to where we are at the moment. We believe that any advice that could be offered would be of questionable utility. In these circumstances such a service is unlikely to be attractive to those it is designed to benefit. I think I am effectively being asked which services the Government provide today. Getting it right is sufficiently important that I should not try to indicate to Members what those services are, other than to say that the Serious Fraud Office has published indicative guidance on how it approaches the prosecution of corporate bodies. This is not bespoke guidance to individual organisations. I will set out the extent to which government advisory services are helpful today in a letter to Members who have been involved in this debate. For all these reasons, I hope the noble Lord, Lord Thomas, can be persuaded to withdraw his amendment.

Photo of Lord Thomas of Gresford Lord Thomas of Gresford Shadow Attorney General

My Lords, the Government are saying that if you ask for their advice they will not give it. There will be a prosecution and people must prove themselves in front of a jury. The effort involved in setting up a trial, and the cost of prosecution and defence, is enormous, whereas what I have suggested is very simple: phone 1234 and get a reply, as the noble Earl pointed out. I am grateful for the support that I have received from various Members. I look forward to receiving a letter from the Minister, setting out what current advisory services there are. I do not for a moment criticise the department that dealt with my query for the way in which it did so. It was a very proper thing for the department to do because I had no commercial interest in asking for its advice.

However, there are many organisations and companies, including those setting up in business, that have real commercial interests. What they want from the Bill is certainty. No honest business wants to commit a criminal offence, given all the expense and obloquy that such a conviction would bring to bear on it and its trade. I leave it to the Minister to consider the suggestion. I will not press this to a vote now. Before Third Reading I will look to receive the Minister's letter, setting out which advisory services exist. I beg leave to withdraw the amendment.

Amendment 13 withdrawn.

Clause 9 : Consent to prosecution

Amendment 14

Moved by Lord Henley

14: Clause 9, page 6, line 11, leave out paragraphs (a) to (c) and insert "the Attorney General"

Photo of Lord Henley Lord Henley Shadow Minister, Justice 5:30 pm, 2nd February 2010

My Lords, in moving Amendment 14, I shall speak also to Amendments 15 and 16. I have returned with these amendments, as I promised to do at the end of our first day in Grand Committee. They would amend the Bill so that the Attorney-General would be, as now, the person who gives consent for a prosecution under the Bill. Clause 9 currently gives that right to the Director of Public Prosecutions, the director of the Serious Fraud Office and, in England and Wales, the Director of Revenue and Customs Prosecutions. Amendment 14 would restore the Attorney-General in England and Wales, Amendment 15 would restore her in her capacity as Attorney-General and Amendment 16 is consequential.

I can be relatively brief. I set out my position clearly in Grand Committee and I will reiterate it today. I am not convinced that the case has fully been made by the Government for doing away with the Attorney-General as the law officer who makes the decision to prosecute bribery cases. Cases to be brought under the Bill are not likely to be numerous. They are likely to be big, complex and possibly controversial. That is the nature of some of the cases that we have seen in recent decades. The Saudi/BAE Systems affair was one such example referred to in that debate. It is because these cases are few but difficult that it is important to retain the role of the Attorney-General. I suggest that it will not put too great a burden on the Attorney-General's office to deal with around a dozen cases per annum. However, if the Minister has good reason to suspect that that figure might be drastically unrealistic, I will certainly listen to his comments.

In Committee, my noble and leaned friend argued passionately that, just because the integrity of politicians can be impugned, it is not a suitable response for politicians to accede to that and surrender our responsibility. Rather, politicians should be willing to uphold the integrity of a constitutionally respected office. That the Attorney-General sits in government is not weakness, even if that should not be the norm among fellow members of the OECD, which has raised questions about the position. It is an established strength of our system that a law officer as senior as the Attorney-General is directly answerable to Parliament. It is to this place or another that the Attorney-General must come to answer difficult questions about difficult decisions. In our view, that is right.

In Grand Committee, I suggested that if the Government wished to tinker with the constitution they should await the Constitutional Reform and Governance Bill in which to do so. We still await that Bill. However, they have decided to press ahead with the proposals in this Bill. Therefore, it is right that we should have this debate today on the Floor of your Lordships' House.

Photo of Lord Clinton-Davis Lord Clinton-Davis Labour

Is the noble Lord putting forward a novel suggestion about the Attorney-General or is he trying to draw on other Acts of Parliament? I would like to know that. I was not a member of the committee that considered this Bill.

Photo of Lord Henley Lord Henley Shadow Minister, Justice

My Lords, if the noble Lord looks at my amendments, he will see that all I am suggesting is that we restore the power of the Attorney-General to make decisions on whether we prosecute. We discussed this in Committee. On that occasion, one or two former Attorney-Generals were not present and I said that I would come back to the issue because I thought that it would be a good idea to hear their views on the Bill. After we have had the relevant debate on this Bill, we might want to come back to it on the Constitutional Reform and Governance Bill, when and if we get that Bill, and when and if we get sufficient time to discuss it in this House. I notice that a wry smile has appeared on the Minister's face, which he is now trying to suppress. I suspect that we shall not have much time to discuss that Bill when it arrives, but it is just possible that we will. However, in the mean time, there is no reason why we cannot have such a discussion on this Bill this evening. I beg to move.

Photo of Lord Lester of Herne Hill Lord Lester of Herne Hill Spokesperson for Women and Equality

My Lords, I have not previously taken part in the debates on this Bill and I speak on this amendment only in order to make it quite clear that I strongly oppose it. No one need be surprised by that, having regard to previous debates about the role of the Attorney-General.

It is my experience that all previous law officers-apart from, I think, the noble and learned Lord, Lord Falconer-whenever confronted with the issue as to whether a politician should also be the chief government legal adviser, have said that the answer is obvious and that the old system works perfectly well. That is not my view. The Minister knows from the time when I was independent adviser within the Ministry of Justice that I for one strongly believe that it is time that we separated the role of the Attorney-General as a politician from the role of chief government legal adviser. If anyone wants any proof of why that is desirable, they have only to recall the role of the Attorney-General in the BAE affair and the halting of the investigation. If that is not sufficient, they should look at the Iraq inquiry and the role of the Attorney-General in relation to Ministers and politics in that regard.

The Prime Minister originally raised expectations that there might be change in this area. Those expectations have not been met and I regret that that is so, but I strongly feel that, when one is dealing with bribery, decisions about prosecutions should be taken by the Director of Public Prosecutions and not by the Attorney-General. This is no reflection on the integrity of law officers of the Crown as individuals.

What convinced me originally that the schizophrenic role of the Attorney-General was unsustainable was the Spycatcher case many years ago. I recall that the noble Lord, Lord Pannick, was my junior in that case. We were against the Attorney-General, who was there as the guardian of the public interest, but in fact was there as lawyer for the Crown for the noble Baroness, Lady Thatcher. I found it impossible to distinguish in my mind between the role of the Attorney-General in seeking a gag order to prevent the press from publishing extracts from Peter Wright's controversial book as counsel for his client, the Government, and his role as guardian of the public interest.

I do not expect anyone present in the Chamber who has held the office of Attorney-General or Solicitor-General to agree with what I have just said, but I hope that they would agree that an amendment to put the clock back so that the decisions on bribery prosecution were taken by the Attorney-General, not the DPP, is not one that would command respect in this House.

Photo of Lord Lyell of Markyate Lord Lyell of Markyate Conservative

My Lords, I greatly respect the noble Lord, Lord Lester, who has enormous expertise in a number of fields, but I am afraid that he is entirely right when he anticipates that my opinion on this is diametrically opposed to his. Put quite succinctly, I can think of nobody who has been first law officer of the Crown-that is the position of the Attorney-General-who would put politics before their duty to deal with the public interest. If they have made mistakes in this matter, I believe that those mistakes have been bona fide. I certainly had a long apprenticeship in this field. I do not believe that the noble Lord, Lord Lester, does justice to Lord Havers when, as Sir Michael Havers, he was Attorney-General. I remember being his PPS at the time. I think that the noble Lord has a personal view on this with which I cannot agree.

The vital matter is that, when the Attorney-General takes any decision in the public interest, he is not acting as a party politician. If he or she were to allow themselves to act as party politicians, they would break the whole tradition and background of the office. It is not party considerations or the party interest that the Attorney-General or the Solicitor-General is considering; it is the public interest. Prosecution decisions par excellence are taken entirely in the public interest. Speaking personally, I have never had the slightest difficulty in knowing the difference between public and party interest and I believe that I never had the slightest difficulty in following the public interest.

What is more, if an Attorney-General or a law officer strays from the narrow path that it is their absolute duty to follow, they are answerable in Parliament directly; indeed, they can be very severely criticised and should recognise that. To a far greater extent than the Directors of Public Prosecution, although they are excellent people who sometimes come before Select Committees or committees of this House or the other place, the law officers of the Crown are by tradition Members of one House or the other-as far as possible preferably of the other place-and are answerable as such.

I believe that all that my noble friend's amendment is seeking to do is to retain a position that is thoroughly well founded and ought to be retained. If, as my noble friend said, there is to be discussion on this, it should be full discussion in the very widest context. We should not use the Bill, which there is strong desire to support-I strongly desire to support it-to make a massive constitutional change, which I believe is deeply erroneous.

The noble Lord, Lord Lester, raised the BAE case. I would be tempted to point out that actually the decision was taken by two public officials and not by the Attorney-General, although it was approved by the Attorney-General. I am not going to impugn either of those public officials-the director of the Serious Fraud Office or our ambassador in Saudi Arabia-in this context. This is a matter of immensely important principle and we should not seek to change the law here.

Photo of Lord Mayhew of Twysden Lord Mayhew of Twysden Conservative

My Lords, I shall not disappoint the noble Lord, Lord Lester. I certainly would like to be able to say, and almost can say, in relation to the speech of my noble and learned friend Lord Lyell, that I agree and have nothing to add. However, I have one small thing to add, which will not have anything to do with Spycatcher, a case that I remember extremely well, in which I considered that all the best arguments were on my side while all the best jokes were on the side of Mr Wright and all those who appeared on his behalf.

In my respectful submission, there is no doughtier upholder of the constitutional position of the Attorney-General and its viability than the present holder of that office. It is worth drawing the attention of the House to what she said to the Joint Committee, which is cited at page 59 of the report:

"It appears to me that the power of direction and the wider constitutional position of the Attorney General should be addressed in the context of the draft Constitutional Renewal Bill, rather than this Bill".

That led us to say:

"Any broader reform of the Attorney General's Office, including her power of direction, must await comprehensive proposals being pursued in the future".

I do not think that it is the end of the world if the power of consent in this case is transferred to the director, but I think that it would be premature to decide that now. That is the basis on which I am entirely content to support my noble friend's amendment.

Photo of Lord Lester of Herne Hill Lord Lester of Herne Hill Spokesperson for Women and Equality 5:45 pm, 2nd February 2010

I am sorry that the noble and learned Lord thought that the best jokes were on his side. Does he remember the joke, when the extract from the book and the book itself were widely available through US publication, in the cartoon showing the Prime Minister as Titania, saying to the ass:

"Thou art as wise as thou art beautiful"?

Was that not a good joke?

Photo of Lord Mayhew of Twysden Lord Mayhew of Twysden Conservative

If I were to recall at this distance all the many cartoons adverse to one activity or another of mine in the public service, I should have an even more overloaded memory than I do at the moment.

Photo of Lord Goodhart Lord Goodhart Liberal Democrat

My Lords, I am afraid that I am unable to support the role that the noble and learned Lords would like to see the Attorney-General maintaining. First, I refer to the paragraph from chapter 9 of the Joint Committee's report, on the subject of the Attorney-General. The conclusion was:

"The Attorney General's powers of consent and direction raise complex constitutional issues that lie at the heart of ensuring parliamentary accountability for the criminal justice system. We agree with the Government that the power of direction should remain in place without being reformed by the draft Bribery Bill. Since this power will remain in place, we are satisfied that the power of consent should be transferred from the Attorney General to the Directors of the prosecuting authorities ... Any broader reform of the Attorney General's Office, including her power of direction, must await comprehensive proposals being pursued in the future".

I should say that that, like the other decisions made by the Joint Committee, was a unanimous decision taken, I think, on the last day before the report was signed and published. I specifically remember that the noble and learned Lord, Lord Lyell of Markyate, was present at that meeting and did not argue to the contrary-

Photo of Lord Lyell of Markyate Lord Lyell of Markyate Conservative

I am most grateful to the noble Lord for giving way. Since I have been mentioned, I will say that the noble Lord will remember that Mr Bruce George pointed out to us that there was an absolute tradition in these Joint Committees that they were always unanimous and that we must make it unanimous. Unanimous we made it. The unanimity really ought to be seen in that context.

Photo of Lord Goodhart Lord Goodhart Liberal Democrat

Joint Committees are not always unanimous. On that occasion, I would have been prepared to object to a majority view if I had felt it necessary to do so.

There is no need for the Attorney-General to consent to prosecutions. The consent of the head of the prosecuting department is sufficient. That was the view of the Attorney-General herself when giving evidence to the Joint Committee. The Attorney-General will still have the power to give directions and, if she has the power to give directions, I see no reason why she should also have the necessity of consenting.

It is not for this Bill to decide the wider aspect of the role of the Attorney-General. I must say that I would be quite happy to see that role disappear altogether in this respect, but clearly not in the light of the Bill. Requiring consent of the Attorney-General to all prosecutions for bribery is one practice that has outlasted its time. In that respect, it is a little like the practice of the old days, when the Attorney-General had to prosecute in poisoning trials. I think that it ought to go into the same wastepaper basket as that.

Photo of Baroness Whitaker Baroness Whitaker Labour

My Lords, I will not take up the House's time in repeating exactly what I said in Committee, but I should like to draw back to the attention of the House the historical context of the role of the Attorney-General.

The amendment of the noble Lord, Lord Henley, does not really return us to a hallowed constitutional safeguard. The concept of the Attorney-General dates from, I think, 1906 when there was no DPP to deter vexatious private prosecutions. One of the things that the DPP does is to do exactly that. The other point that I think the House ought to recognise is that prosecutions for bribery will not always be of such magnitude as the BAE case. There will be a lot of small cases to which it is entirely appropriate for the DPP to consent, as he does on numerous other occasions. I think, finally, that the reason why the OECD singled out the role of the Attorney-General in our case as not complying with the convention on bribery was exactly because the Attorney-General is, of necessity, also a politician. This was not a reflection on any individual Attorney-General, but there are many like me who are uneasy at the thought of the Attorney-General consenting to individual prosecutions and, for that matter, defending individual prosecutions in either this House or the other place.

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Ministry of Justice, The Parliamentary Under-Secretary of State for Justice

My Lords, I thank all noble Lords who have taken part in this debate on the amendment of the noble Lord, Lord Henley. I apologise for smiling at him; he has been so kind to the Government this afternoon that I thought it was worth a wry smile, if nothing else-but obviously it did not particularly appeal to him.

Before I enter into the debate, on the question of unanimity or otherwise, there was an interesting argument which related to all committees-Select Committees or Joint Committees. Sometimes unanimity is not the real point. I speak as a slightly hard-bitten Minister, but I think that it is the number of people present when the reports are finally agreed that may be of more importance than necessarily is the unanimity of all members of the committee.

I return to the subject before the House. It has prompted an interesting and robust debate, as it always does, and did at Second Reading and in Committee, on the constitutional importance of the Attorney-General's role and responsibilities. The subject generates significant passion on both sides of the argument and we have had the good fortune to hear from noble and learned Lords with direct experience of this office and the responsibilities that it entails.

No one on either side of the argument would disregard the constitutional importance of the Attorney-General's position or the need to maintain effective parliamentary accountability for the operation of the prosecution services. Of course, no one seeks to question the distinguished service given by all former law officers or the independence with which they have exercised their powers.

I believe it is common ground that it is appropriate to retain a consent provision for the new bribery offence. Clause 9 provides for this responsibility to be exercised by the directors of the relevant prosecuting authorities. It is the Government's view that this is the appropriate level at which decisions for these offences should be taken. I remind the House that these directors already exercise the consent function in respect of a number of other offences, and the vast majority of prosecutions take place without any involvement by the Attorney-General. As some noble Lords have commented, bribery cases will not normally hold such significance and sensitivity to be of national interest. Where, in the exceptional case that they do, the directors are already empowered to protect the public interest. We see no practical advantage in retaining in the Bill a requirement for the Attorney-General's consent as opposed to that of the directors of the prosecuting authorities.

My noble friend Lady Whitaker, who has spoken on this again today, remarked in Grand Committee:

"The Attorney-General has not been airbrushed out of the picture".-[Official Report, 7/1/10; col. GC 69.]

That is right. My noble and learned friend the Attorney-General will continue to have a fundamental role in these matters, as she does at present in relation to the work of the directors of the prosecuting authorities. However, the decision on prosecution will rest with the directors. This is an important principle because the protocol between the Attorney-General and the prosecuting authorities published in 2009 sets out the circumstances in which the Attorney-General will or will not be consulted, and how the Attorney-General and her directors will engage with one another.

The protocol serves to underline that the directors of the prosecuting authorities exercise their statutory functions under the superintendence of the Attorney-General, who is of course responsible to Parliament for the directors' functions in relation to prosecutions. The Attorney-General is in turn responsible for safeguarding the independence of prosecutors in taking prosecuting decisions. As reflected in the protocol, the Attorney-General will also retain an exceptional power to give a direction in relation to any case which threatens national security, in which case the protocol requires her to report to Parliament. The Attorney-General herself made the point in evidence to the Joint Committee on 25 June last year. She stated:

"Accountability will remain because, for so long as the Law Officers, that is the Attorney General and the Solicitor, remain the supervisors and the superintendents of the prosecutorial authority, there is a vehicle through which that accountability can take place".

The Joint Committee's final report, as the noble Lord, Lord Goodhart, reminded us, firmly endorsed the proposal to transfer the power of consent from the Attorney-General to the directors of the prosecuting authorities. Many others have, as it happens, expressed their support for this proposal, including the OECD, the Council of Europe monitoring body GRECO, Transparency International and The Corner House, all of which have been active for some time in pressing us to reform our bribery laws.

I have done my best to show that while the Bill will transfer the power of consent from the Attorney-General to the directors, the Attorney-General's other responsibilities in relation to prosecution decisions remain unchanged. In particular, the Bill does not undermine the fundamental constitutional position of the Attorney-General or her accountability to Parliament for the decisions taken by the directors of the prosecuting authorities.

That is all I have to say on this group of amendments. I hope that the noble Lord, Lord Henley, will not push the matter to a Division.

Photo of Lord Henley Lord Henley Shadow Minister, Justice

I can assure noble Lords that I shall not press the amendment to a Division tonight, but certainly the wider role of the Attorney-General-which goes way beyond the Bill-is something that we will want to come back to when and if the Constitutional Reform and Governance Bill comes before this House. At the moment, it is languishing in another place and I suspect that it will not be with us until well after our break. Whether we ever reach Committee stage is another matter because of events that will happen later in the year, as the noble Lord knows. For the moment, the best that I can do is to withdraw the amendment, but it is an issue to which I certainly want to come back later. I beg leave to withdraw the amendment.

Amendment 14 withdrawn.

Amendments 15 and 16 not moved.

Clause 10 : Penalties

Amendment 17 not moved.

Clause 12 : Defence for certain bribery offences: legitimate purposes

Amendment 18

Moved by Lord Pannick

18: Clause 12, page 8, line 4, after "defence" insert ", subject to the conditions set out in section (Defence for certain bribery offences: authorisation by Secretary of State) as to authorisation,"

Photo of Lord Pannick Lord Pannick Crossbench 6:00 pm, 2nd February 2010

My Lords, I shall speak also to Amendment 30 in this group. These amendments are in my name and those of the noble and learned Lords, Lord Mackay of Clashfern and Lord Woolf. They are designed to ensure that acts of bribery by the state are lawful only when they are authorised in advance by the Secretary of State or, in urgent cases, by a senior official acting on his behalf.

As your Lordships' Select Committee on the constitution has advised in its further report published today, it is unsatisfactory to leave regulation of possible acts of bribery by the state to post-event assessment through the inevitably cumbersome machinery of the criminal law. The circumstances in which it is necessary for the state to bribe others raise such important issues of public interest that it is highly desirable that such acts do not occur without prior authorisation, not just by the security services or the Army, but by the Secretary of State answerable to Parliament.

I recognise and respect that the Minister has the difficulty that he cannot refer publicly to details or types of operations, the secrecy of which is vital to their efficacy. However, dealing with the issue as a matter of principle, the Minister, in Grand Committee and in his helpful response to the earlier report of your Lordships' Constitution Committee, raised three main arguments against a prior authorisation procedure. The first argument is that it would be unworkable because it would impose an undue administrative burden. Of course, a prior authorisation procedure is already to be found in Sections 5 and 6 of the Intelligence Services Act 1994, which provides for the Secretary of State to authorise entry into property or interference with wireless telegraphy. Under the Act, the Secretary of State personally considers and authorises a large number of operations. The Secretary of State also personally authorises interception warrants under the Regulation of Investigatory Powers Act 2000.

I accept that the volume of potential bribery cases may be larger. That is why the amendment would allow the Secretary of State not only to authorise a specific act of bribery, but also to authorise acts of a specific description on a class basis, or acts done in the course of a specified operation. The Secretary of State will not need to consider, and may in practice be unable to consider, each and every act of bribery. There would be an administrative burden on him to authorise at least classes of acts of bribery. He would need to consider, no doubt on the advice of the intelligence services or the Army, what types of acts of bribery were necessary either generally or in the course of a specified operation. That is precisely what the Secretary of State should be doing in this important context.

The second objection raised by the Minister is that if authorisation is to be conducted on a class basis, the classes will inevitably be so wide as to be meaningless. I hope and expect that the Secretary of State would, with the advice of the intelligence services and the Army, specify classes of acts of bribery that would be sufficiently specific to provide useful guidance on the circumstances in which these acts by the state were necessary. Involvement of the Secretary of State in this way, on such an important issue, would serve a valuable function.

The third and final objection raised by the Minister to a prior authorisation procedure is that Clause 12 already ensures that the Director of Public Prosecutions will consider the specific facts of an individual act of bribery, and that this is, as the Minister says, a more focused mechanism than prior authorisation, particularly if that is on a class basis. The fallacy in that argument, I respectfully suggest, is that it seeks to contrast prior authorisation and prosecution by the DPP as alternatives between which the House must choose. However, as pointed out by your Lordships' Constitution Committee -of which I and the noble and learned Lord, Lord Woolf, are Members-both prior authorisation and the power of the DPP to prosecute are vital public protections in this context. The reason is that it is wholly unrealistic to think that the criminal process will provide a restraint on acts of bribery by the intelligence services and Army other than in exceptional circumstances. The issue is simple: is it sufficient for the authorisation for acts of bribery to come simply from within the intelligence services or the Army, or, as I suggest, is bribery by the state so important a matter of public interest that prior authorisation should be by the Secretary of State, or at the very least pursuant to a decision by him?

Finally, proposed new subsection (11) in Amendment 30 overlaps with Amendment 20, which will be debated in the next group. Proposed new subsection (11) would allow for a defence only if the purpose of the proposed act of bribery was not solely to advance the economic interests of the United Kingdom. It would be inappropriate for that important issue to become part of the distinct debate that we are now having on the merits of a prior authorisation procedure. If Amendment 30 is formally moved at the close of the debate, I will move a manuscript amendment to delete proposed new subsection (11) from Amendment 30. I understand that the Minister does not object to the manuscript amendment. For all those reasons, I beg to move.

Photo of Lord Goodhart Lord Goodhart Liberal Democrat

My Lords, this group of amendments raises what I have certainly found to be a difficult issue. The amendments deal, in two very similar versions, with prior authorisation by the Secretary of State of acts of bribery as a defence to prosecution.

I heard the arguments presented in Committee by the noble and learned Lords, Lord Pannick, Lord Mackay of Clashfern and Lord Woolf. I know that the noble Lord, Lord Pannick, is not within the customs of this House regarded officially as a learned Lord but he undoubtedly is one. When I first heard those arguments, for a while I found them persuasive. Those three and the noble Viscount, Lord Colville of Culross, who was unable to attend the Committee stage, make a powerful foursome, but on further consideration I found the balance beginning to move the other way.

The advantage of the authorisation is obvious. Individual members of the security services, with the benefit of an authorisation, can be satisfied that they are not liable to prosecution if they do what they have been authorised to do. However, there are serious drawbacks as well. The first, I believe, is that too much power-indeed, I believe an unconstitutional degree of power-is given to the Secretary of State. Under the Pannick, Mackay and Woolf version, the authorisation may be given by the Secretary of State not just to one individual for one action but for class actions and to a class of persons of a specified description. The Secretary of State has the power to decide whether persons in a class decided by himself are to be allowed to commit bribery in relation to particular types of action or inaction. In effect, therefore, the Secretary of State is making the law. In my view, it is plainly what could be described as a Henry VIII power. Such a power can of course be dealt with by parliamentary scrutiny but, for obvious reasons, there can be no parliamentary scrutiny of an authorisation. I regret that the Constitution Committee, in its second report on Clause 12, did not take that into account, because I believe that it is a very important reason for not approving this group of amendments.

Furthermore, once the authorisation has been given, however misguidedly, no one can be prosecuted. The people who acted on the authorisation are protected by it. The Secretary of State cannot be prosecuted for giving an unjustified authorisation because, under this group of amendments, no sanctions can be imposed on the Secretary of State, even if his grant of authorisation is by any reasonable standards wholly unreasonable. There are other drawbacks-in particular, the amount of time that will be required to be spent by the Secretary of State in studying and approving these authorisations.

Having considered these issues, I have come to the conclusion-I did not start with it-that this group of amendments is not one that I feel your Lordships' House should support.

Photo of Lord Mackay of Clashfern Lord Mackay of Clashfern Conservative 6:15 pm, 2nd February 2010

My Lords, your Lordships will understand that, having put my name to these amendments, I support them and support them strongly. Subsection (11) in our Amendment 30 was included on my initiative. I had intended that it would be an amendment to the amendment so that it would be an optional matter to consider separately. Of course, I cannot excuse myself on the basis of inexperience. I regret that it has come to be included as part of Amendment 30 but the noble Lord, Lord Pannick, has indicated a way of correcting that.

The Security Service Act, which was the first Act to acknowledge the existence of the security services, contained an authorisation, and the Intelligence Services Act continued that. I do not know, although I may be corrected, of any provisions in an Act concerning the security services or the intelligence services generally that are contrary to the general law and the subject of a defence without an authorisation of the Secretary of State. I also think that this was the Government's idea first. They had an authorisation procedure in the draft-

Photo of Lord Goodhart Lord Goodhart Liberal Democrat

I am most grateful to the noble and learned Lord. I recognise that there have been authorisations before but I think that there is a very important difference between the authorisation of a particular individual for a particular action and the power to give class authorisations. I think that that pushes the issue across the barrier.

Photo of Lord Mackay of Clashfern Lord Mackay of Clashfern Conservative

I have no difficulty in making it clear that the classes would need to be quite closely defined. We included this only on the basis that the Government said that there would be many such cases requiring authorisation.

Let us look at the position. This is a general law that the Government are promoting and asking Parliament to enact, and they want to make exceptions for themselves, for agencies of the Government and for the Armed Forces. The rule of law suggests that the Government should obey the law like everyone else, so they have in mind a very important innovation here. In previous cases relating to the security services, there has been an authorisation.

When the noble Lord, Lord Goodhart, brought me to a temporary halt, I think I was saying that the Government had an authorisation procedure in their original proposals. I think I am right in saying that there was an authorisation procedure in the draft Bill-the original formulation of this Bill-that they put forward. They must have known then how many cases there would be, and they must also have had at least an idea of the sorts of cases that they had in mind. They were, after all, framing the policy and they did not seem altogether overawed by that possibility. It is true that, since then, the scope of the defences in Clause 12 have been somewhat enlarged. Of course, the government amendment yet to be moved restricts them again, although not as completely as was the case in their first proposal. However, the Army and the security services are to remain.

The claim that the Government are introducing so many breaches of the law as to require some extraordinary procedure is quite important. I strongly believe that the authorisation procedure, which hitherto has been sanctioned by Parliament, is the correct way forward. If the Government can assure us that class descriptions are not required because the number of cases is so well defined that class descriptions are not necessary, I am sure that the noble Lord, Lord Pannick, the noble and learned Lord, Lord Woolf, and I will be the happier for that. We included the class system to deal with the suggestion that a lot of cases-perhaps rather small ones-required to be dealt with, and the essence of these cases, and the basis on which they are going forward, must be known to the Government and be a government responsibility.

I suggest that this is an extremely important situation in principle and that if government agencies breach what otherwise would be the law governing them, the Government need to take responsibility for authorising that. That is what the amendment would do. The authorisation is challengeable in Parliament in the sense that authorisations can be subject to parliamentary scrutiny, but our amendments do not preclude the possibility of a prosecution. We have said that there will be no defence under Clause 12 without the authorisation. In my submission, the constitutional position and the need to respect the rule of law is very well protected in our amendments, and I sincerely hope that the Government will consider them seriously. I do not think that we want to vote on these matters this evening. However, I certainly want to feel that the Government are taking this extremely seriously and will give us a good reason why the procedure for authorising departures from the law by government agencies-namely, to use the authorisation procedure in advance-is not appropriate in this case.

Photo of Lord Woolf Lord Woolf Crossbench

My Lords, I begin by declaring an interest, in that I was the chairman of the inquiry into BAE Systems in relation to the standards that it should adopt, which involved a consideration of bribery. I heard what has been said by the noble Lord, Lord Pannick, and the noble and learned Lord, Lord Mackay, who have signed the amendment, and I thought initially that there would be nothing for me to say. But, having heard the noble Lord, Lord Goodhart, who I am personally happy to describe as learned, I am bound to say that my first reaction to his point suggests that perhaps he was wiser initially than in what he said to the House today. In my view, he has misunderstood the amendment in taking the approach that it raises a constitutional problem of the sort he described.

Clause 12 makes it clear that in its present form it is a defence for a person charged with a relevant bribery offence to prove that the conduct was necessary. That is the burden placed on anyone seeking to rely on the defence as it appears in Clause 12. We propose the new provisions which state:

"There shall be no defence for the purposes of section 12(1) unless the Secretary of State has given an authorisation for the purposes of this section prior to the commencement of the person's conduct".

That is merely an additional requirement. First is the obligation contained in the clause, and the amendment proposes an additional requirement that the person concerned has to show that he can rely on an authorisation. Surely that position is much to be desired.

Earlier it was made clear that the Bill has a role as a whole, which is to show that this country takes bribery seriously and regards it as important to put on the statute book legislation recognising the corrosive effect of bribery and the importance of preventing it whenever possible.

Photo of Lord Lester of Herne Hill Lord Lester of Herne Hill Spokesperson for Women and Equality

I am not learned and do not wish to be referred to in that way because I deplore what my "learned" noble friend Lord Goodhart has done, which is to debase the currency by allowing those who have not been Law Officers or senior Law Lords to be referred to in that way.

That is not why I am interrupting the noble and learned Lord. I have a question as I do not understand. Why is not the authorisation of a class in this case either a Henry VIII court or, in memory of Earl Russell, going back before that, a dispensing power?

Photo of Lord Woolf Lord Woolf Crossbench

I can only repeat what I hope I have already made clear-that there is a specific defence and the amendment would add an additional requirement to that defence. One starts with the situation that the offences speak for themselves. They set out what the criminal law requires. Then there is provided to someone charged with a criminal offence a means of avoiding what would be the normal liability of their conduct for reasons that I accept are perfectly appropriate and proper. The unamended clause states clearly that there is an obligation on the person who is charged to show that the conduct was necessary, and so on. The amendment proposes an additional requirement saying:

"There shall be no defence"- in other words making the person concerned subject to the ordinary law-

"for the purposes of section 12(1) unless the Secretary of State has given an authorisation for the purposes of this section".

There is a double requirement: one in the clause as originally drafted and another in the amendment.

I shall go back to my point about the general purpose of the Bill, in addition to its specific purpose. Although we feel that action should be taken to protect the position of those who commit what would otherwise be the bribery offence, it is one that is curtailed as far as it is appropriate to curtail it. It is curtailed in two respects. The first is because of what appears in the Bill in its original form; the second is because of what appears in the amendment. If the amendment stood by itself it would have no bite. The fact that it refers to a class of circumstances where the defence can operate does not mean that it is creating a power in the Minister to change the law. All it means is that the Minister would not impose a specific limitation on the circumstances when the defence could be relied on, but gives it in a class of situations. Clause 12(1) would operate more readily than if it applied only in a specific situation.

This matter was raised for the first time today and I do not propose to say any more. Either the argument is convincing or it is not. However, I will say that it would be indeed unfortunate if a special defence was given to the security services as part of the Crown to commit what would otherwise be the offence of bribery without that power being under any form of restraint or supervision. One of the most important things about supervision is that it would be a deterrent to the improper use of the power. It would also provide a means whereby it could be clearly seen and, indeed, if necessary, thereafter in the public domain made clear, that the circumstance in which the bribery was to take place was not only necessary for the purposes set out in the clause, but one that a Minister of the Crown had authorised. That should be carefully considered by the Crown under the amendment.

If the Minister does not feel able to accept the amendment today, I hope that he will at least consider whether there is not some other method whereby proper supervision could occur of this important departure from our normal law of bribery.

Photo of Viscount Colville of Culross Viscount Colville of Culross Crossbench 6:30 pm, 2nd February 2010

My Lords, as my Amendment 22 is grouped with this, perhaps I may be allowed to speak at this stage. Rather like my noble and learned friend Lord Woolf, I thought that by this time there would not be much more to say but, like him, I find that there is a little to say. I do not understand the position of the noble Lord, Lord Goodhart. The security services and the intelligence services still need a warrant. There is no repeal of that provision in the Bill. Therefore, not only will they be dealt with under those two pieces of legislation, they also fall under Clause 12.

Photo of Lord Goodhart Lord Goodhart Liberal Democrat

The point that I am trying to hammer home is that there is an enormous difference between giving a warrant for a particular use on a particular occasion and authorising people whom you do not know for something that they may do in future. You do not know what they will do in future, because they are given a general class authorisation. That is why there is a really serious difference.

Photo of Viscount Colville of Culross Viscount Colville of Culross Crossbench

The noble Lord must know a great deal more about these things than I do, but that is not the way that I understood that it worked at all. It seems to me that what has happened in this case has been identified, as my noble and learned friend said, by your Lordships' Select Committee on the Constitution. The Government could have done two things. They could either have gone for authorisation before the event, as is the case with the secret services and the intelligence services, which are also covered under this system-covered twice, therefore-or they could have left it to what is called a post-event assessment.

I would prefer to stay with a single system for the security services and the intelligence services, rather than to have two systems, which is what we will have under the Bill. What is really happening, as the noble Lord, Lord Bach, told us last time that we discussed the Bill, is that the whole concept has been developing more or less as we go along.

There was no reference to some of those things in the draft Bill which went before the Joint Select Committee. The Minister explained that that is because they were not yet ready. I think that what happened-I ask the Minister to comment on this-is that the Government decided to include the law enforcement agencies. Now they are taking them out again by a later amendment, which I wholly applaud, but the proposition of having to give a prior authorisation or warrant for all the operations of the law enforcement agencies-and there are many of them-presumably led to concern that the whole thing would become unmanageable. That was the trouble, as I understood it, which caused the change from prior authorisation to the defence scheme in Clause 12.

If the law enforcement agencies are to be removed again-and I assume that they are, because I am sure that that amendment will be accepted-it seems to me that the argument drops away. Why do we not have a single system for all the people concerned? That would give them the opportunity of knowing beforehand that they can do what they have been tasked to do and are unlikely to be prosecuted for it; whereas under the post-event assessment, they will not know that. I should have thought that that would be thoroughly unsatisfactory. The Minister has never really explained why that change took place, except that it grew. I should have thought that, for the reasons given by other speakers in the short debate, we should retain the prior authorisation system. My amendment is an attempt to do that. I am sure that it is not as elegant as the lead amendment, but it has that effect.

Photo of Lord Thomas of Gresford Lord Thomas of Gresford Shadow Attorney General

I criticised Clause 12 in Committee on the basis that the defence in subsection (1) is almost impossible for that individual to substantiate. It states:

"It is a defence for a person charged with a relevant bribery offence to prove that the person's conduct was necessary"- so he has to prove it-

"for ... the proper exercise of any function of the Security Service".

He would not be prosecuted-no consent would be given by the Director of Public Prosecutions-if he was properly exercising a function of the Security Service. It would not be in the public interest to do so. He is outside the system when he is prosecuted. It has been determined by the Director of Public Prosecutions that he has acted in some way improperly in offering a bribe.

That person then has to prove that his conduct was necessary. To do that, if he is a member of the Security Service, he must inevitably have to go into his instructions, which are no doubt difficult to produce. He cannot walk into MI5 offices and demand to see the documents to prove his defence-his instructions, the structure, and so on. An impossible burden is placed on him. It may be slightly easier for a person in the Armed Forces to have access to papers, but my experience of military courts martial is that the prosecution is not overanxious to provide defendants with the necessary material. The burden on him is impossible.

Amendment 30, tabled by the noble Lord, Lord Pannick, and others, makes it impossible to prosecute him anyway, because if he has an authorisation from the Secretary of State, new subsection (2) in Amendment 30 states:

"The Secretary of State shall not give an authorisation unless he is satisfied that the person's conduct is necessary for one of the purposes set out in section 12(1)".

If we have Clause 12 followed by the amendment, we have to put the Minister in the dock if he has authorised what the defendant has done. With that authorisation, there is no way in which an individual will ever be prosecuted under Clause 12.

The noble Viscount, Lord Colville, approaches this in a different way. It is perhaps a better way in that it does not negate Clause 12 and the offence set out in subsection (1), but he has limited it to paragraphs (a) and (c), and it does not cover the security services. Paragraph (a) is going out anyway, so in the noble Viscount's Amendment 22 we are talking only about the Army. I shall address noble Lords later on the exclusion of Clause 12, so I shall reserve what I have to say about it, but when one puts these amendments together and sees how they are supposed to work, it is even clearer that the whole thing is a dog's breakfast.

Photo of Lord Goodlad Lord Goodlad Conservative

My Lords, I support the amendments tabled by the noble and learned Lord, Lord Woolf, my noble and learned friend Lord Mackay and the noble Lord, Lord Pannick. They have expressed the views of your Lordships' Select Committee on the Constitution in a way on which I shall not elaborate enormously. The second report on the Bill appeared this morning. I shall not dwell upon this, but the prelegislative scrutiny arrangements and the tardiness of the Government's response to our first report, which was issued at the beginning of December, have made it extremely awkward for people to have time to look into these matters as should be done. As the noble Lord, Lord Pannick, and the noble and learned Lord, Lord Woolf, said, the committee takes the view that an act of bribery by the state should not occur without prior authorisation by a Minister. The Government have recognised that principle in their amendments in respect of some agencies, but not others. The argument that it is impractical will not wash and will be subject to a great deal of detailed scrutiny before we conclude our proceedings.

Your Lordships' committee further believes that there may be rare cases-I hope this takes care of the concerns of the noble Lord, Lord Goodhart, whose post I frequently receive and who I know receives some of my correspondence-where such authorisation has occurred, in particular, on a class basis where the individual defendant appears to have acted improperly in performing an act of bribery and where prosecution should be considered. Your Lordships' committee adheres to the view that the defences available to the intelligence services and the Armed Forces should be accompanied by a system of prior ministerial authorisation. In the real world-I appreciate that we, particularly when in government, do not necessarily occupy the real world-if I were a member of those services, I would fervently welcome such prior authorisation. In fact, I might well insist upon it.

Your Lordships' committee will study with great care what the Minister says on this matter. It will deliberate and consult where desirable before returning to these points at Third Reading.

Photo of Lord Elystan-Morgan Lord Elystan-Morgan Crossbench 6:45 pm, 2nd February 2010

My Lords, it is with humility and diffidence that I rise to support the amendments in this group. I appreciate the substantial and heavyweight contributions that we have already heard from so many distinguished noble Lords and noble and learned Lords. The motivation behind Clause 12 and the amendment are exactly the same. In both cases, there is a feeling that it would be utterly wrong for people who genuinely discharge onerous duties under strict authority to be charged and, if charged, to be convicted in respect of offences under the Bill. In both cases, there is a desire to exculpate such people under a system laid out in Clause 12 and Amendment 13. In both cases, it is intended that that exculpation should operate within narrow and strict limits and depend on a system of authorisation, but there the two systems part.

In theory, one can say that in both cases it is post-event exculpation because the original clause- Clause 12-and the amendment speak of a defence. In other words, they suppose that the matter has already come to court. In practice, that is entirely wrong. In relation to Clause 12, a person who is prosecuted will come to court and will have to raise the defence, taking upon his or her shoulders the responsibility and the burden of proof-it is not the same burden of proof that normally lies upon the prosecution, but is the burden of proof on a balance of probability-of establishing that the defence is well made out. That may be extremely difficult, as the noble Lord, Lord Thomas of Gresford, has pointed out. It may mean having to go into the most sensitive areas of intelligence and security. It may present a totally genuine and innocent person with an almost impossible task. Why should that be so?

My noble friend Lord Colville said that the amendment grafts an added precaution on to Clause 12. In practice, that is not so because the matter will never come to court. It is utterly unthinkable that there should be any prosecution under subsection (2) of the new clause. In those circumstances, there is nothing that is objectionable to fundamental constitutional principle. I do not know whether noble and learned Lords will agree with this simile, but it seems to me that one is giving a person in high authority a semi-judicial role to legislate in such a way as one would legislate in the case of a local Act that would create an exclusion from the general statute of the land. I do not think there is anything wrong in that. I do not know if there are any precedents in relation to that, but it seems to be a wholly decent and safe way of doing it. Therefore, the protection given by the amendment to people who are serving their country, very often in the most difficult and complicated circumstances, makes it infinitely preferable to the system in the original clause.

Photo of Lord Neill of Bladen Lord Neill of Bladen Crossbench

My Lords, I have one observation to add, coming new to this debate. The best system must be prior authorisation where the Minister applies his mind to known facts and says that a bribe can or cannot be paid. I am much more troubled by the debate on a condition that applies broadly to the future. How are those conditions going to be written? In practice, how narrowly and carefully will they be followed? I believe that more thought needs to be given to future condition as opposed to specific authorisation in the light of known facts. I hope that the Minister can give an undertaking that serious thought will be given to dealing with this situation. If there are real problems about conditions of the sort that I and other noble Lords have indicated, we can hear about them at the next stage. For the time being, I put my money on specific authorisation in advance.

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Ministry of Justice, The Parliamentary Under-Secretary of State for Justice

My Lords, I thank all noble Lords who have spoken in this important debate. As the noble and learned Lord, Lord Woolf, said, the Bill is before the House because the whole House believes that it is important that we take bribery and our international responsibilities seriously.

The amendments seek to supplement the defence in Clause 12(1) by making that defence conditional on the Secretary of State's prior authorisation of the relevant person's conduct. The Constitution Committee of this House, which is chaired by the noble Lord, Lord Goodlad, and for which all have the highest respect, put forward a similar proposition. Its first report in December argued that the use of the defence by law enforcement agencies and the intelligence services, but not by the Armed Forces, should depend on prior authorisation. The committee has today helpfully published a second report on the Bill that reiterates its concerns in this regard, but on this occasion it has argued that a prior authorisation scheme should apply to the intelligence services and the Armed Forces. The reason for this change is not immediately apparent from the report, and I listened during the debate to hear whether the reason for this change of view is to be given.

Amendments 18 and 30, tabled by the noble Lord, Lord Pannick, and others, would provide that no defence existed under Clause 12(1) unless the Secretary of State had given authorisation prior to the commencement of the conduct. Amendment 22, in the name of the noble Viscount, Lord Colville, who as the House knows chaired with huge skill the Joint Committee on the draft Bill, is similar in many respects but with one important difference: that the proposed authorisation scheme is confined to law enforcement agencies and the Armed Forces. However, given the government amendments in the next group, which remove the defence for law enforcement agencies, as has been said, the scheme would be restricted, as we understand it, to those who perform functions on the part of the Armed Forces.

Photo of Viscount Colville of Culross Viscount Colville of Culross Crossbench

I had no intention of doing that; I wish to take out the law enforcement agencies and leave in the Security Service and the intelligence services.

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Ministry of Justice, The Parliamentary Under-Secretary of State for Justice

Then we have misunderstood the noble Viscount's amendment. I thank him very much for pointing out what he meant.

In both sets of amendments, the terms of the proposed authorisation closely follow the model of an existing scheme in Section 7 of the Intelligence Services Act 1994. That section ensures that activities that are undertaken not at home but overseas by the SIS-and, by virtue of Section 116 of the Anti-terrorism, Crime and Security Act 2001, also those of GCHQ-and that might otherwise expose its officers or agents to liability in the UK, are, where authorised by the Secretary of State, exempt from such liability. The House should note that Section 7 does not address the activities of the Security Service or conduct by the other intelligences services in the United Kingdom.

The Government originally proposed an authorisation scheme for the intelligence services in the draft Bribery Bill. This was also modelled on Section 7 of the 1994 Act and would have provided for authorisation by the Secretary of State. That scheme did not find favour in the report of the Joint Committee that considered the Bill. I fully accept that the Joint Committee's concerns were not focused on the authorisation scheme but on the case for an exemption for the intelligence services. None the less, the Joint Committee's final report recommended the removal of the scheme from the Bill. Having reflected on our original proposals in the draft Bill and on the Joint Committee's response to it, we concluded that the defence in Clause 12 is preferable to an authorisation scheme. I should say to the noble Viscount that the reason for choosing Clause 12 had nothing at all to do with the law enforcement agencies being brought into the Bill.

In our view, there are a number of significant drawbacks to any proposal for the Secretary of State's authorisation of conduct as proposed in these amendments, especially when coupled with a defence, compared with the defence in Clause 12. An authorisation scheme for this Bill has to cater for all the intelligence services and for the Armed Forces. We strongly argue-indeed, it might almost be conceded-that it is clear that case-specific prior authorisation of conduct on the part of or on behalf of either the intelligence services or the Armed Forces would be impracticable simply as a matter of logistics. One has only to consider the practicalities of such a scheme in an operational environment such as Afghanistan to appreciate the difficulties of case-specific prior authorisations. Decisions must be made at a moment's notice and in a distant and highly pressured setting. Ministerial oversight prior to the conduct taking place is simply unworkable. Frankly, the proposition is, if I may say so, absurd.

We have similar concerns about a case-specific authorisation scheme for the intelligence services. Consultation with the agencies concerned has confirmed that consideration on a case-by-case basis by the Secretary of State would be entirely unworkable because of the potential number of authorisations involved. The alternative to a case-specific authorisation scheme would, as we have heard, authorise a class of activity over a lengthy period; the amendment suggests up to six months. In the Government's view, the value of such a scheme as a check on the appropriateness and proportionality of the services' operations, or in importing some sort of ministerial accountability, would be very significantly reduced.

The latest report from the Constitution Committee suggests that such a scheme would provide,

"a measure of oversight by a Minister who is accountable to Parliament".

However, the terms of a broad class-based authorisation in this context would arguably have to be so wide as to bring into question the utility of such an approach in securing the objectives which the Constitution Committee itself sets out.

In contrast to an authorisation scheme, the Clause 12 defence is case-specific and ensures that the necessity or otherwise of the conduct is tested by reference to the roles of the individuals concerned and to the particular circumstances of each case. I remind the House that, if the government amendments in the next group are accepted, the defence will apply only where the conduct is assessed as necessary in accordance with the respective functions of the intelligence services and the Armed Forces.

What I am about to say is particularly important in relation to Clause 12. Prosecutors will be able to review cases that are passed to them independently and in accordance with the usual evidential and public-interest tests. They will look at the offence as set out in Clause 12 and the defence that is attached to it. Ultimately, of course, the prosecutor decides whether the matter should go further. It will be a matter for a jury to determine whether the defence is made out.

The defence provides legal certainty. It is a transparent, proportionate and comprehensive solution to what is a sensitive and difficult issue. What about augmenting the defence by having two tests? We are not persuaded that it should be augmented by an authorisation scheme of the kind that is proposed in these amendments. Although we are encouraged that noble Lords appear to be content with the defence in principle, it is difficult to see what coupling a defence with an authorisation scheme would actually achieve. Indeed, we think that it undesirably combines two separate models for dealing with this issue. Noble Lords will recall that the authorisation scheme in the draft Bill, as with the scheme in the 1994 Act, had nothing to do with a defence. Where an authorisation was given, the effect would be to render the conduct lawful. In other words, an authorisation amounted to an exemption for the conduct from possible criminal liability.

Clause 12 is based on a different model of a defence, which for reasons that I have explained we consider to be more appropriate in this specific context. It provides a defence to a bribery charge if the relevant conditions are met. This approach has precedent in primary legislation-namely, the defence available for particular child pornography offences in the Protection of Children Act 1978. The defence in Clause 12 is drafted in very similar terms to that in the 1978 Act.

If either of these amendments was carried, we would end up with both models being applied at the same time. We do not believe that that would make sense either in principle or in practice. Both amendments retain the defence but augment it with an authorisation requirement in respect of the conduct. That would create a scheme that is much more onerous than either the defence model or the authorisation model, which Parliament previously approved as appropriate models for addressing this issue.

As the scheme would remain linked to a defence, the existence of the prior authorisation would not be conclusive. It would not, unlike the authorisation scheme proposed in the draft Bill, mean that no offence was committed. A person whose conduct was authorised could still be prosecuted and, in order to avoid guilt, would have to establish that the conditions of the defence applied. This is precisely the same process with the defence model in the Bill. The authorisation requirement would add an unnecessary and unwelcome extra layer of bureaucracy into the process for little obvious benefit.

Photo of Lord Elystan-Morgan Lord Elystan-Morgan Crossbench 7:00 pm, 2nd February 2010

My impression is that the number of prosecutions each year for the past four or five years in relation to bribery has been very limited. There have been something of the order of a couple of dozen each year. In order that one can judge the scale of the problem that we are talking about, can the Minister say how many of those involved the armed services or the intelligence services?

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Ministry of Justice, The Parliamentary Under-Secretary of State for Justice

I thank the noble Lord for his question, although I cannot give him the figures. I do not think that it is anticipated that there will be many prosecutions in court under Clause 12 if it becomes law, although I am only surmising for the future.

Photo of Lord Thomas of Gresford Lord Thomas of Gresford Shadow Attorney General

The noble Lord said that if a person was authorised he could still be prosecuted. Amendment 30 states:

"The Secretary of State shall not give an authorisation unless he is satisfied that the person's conduct is necessary for one of the purposes set out in section 12".

Under the amendment, the Secretary of State would authorise the defence, in effect, and would have shown that the conduct was necessary. Therefore, unless the Secretary of State stands in the dock with the defendant, how could the person be prosecuted?

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Ministry of Justice, The Parliamentary Under-Secretary of State for Justice

As I understand it, under Clause 12, which would also be in existence under the terms of these amendments, the prosecutor would be able to look at the facts and decide whether the defence in Clause 12 was made out or whether the matter should be prosecuted. That is how I think it would work. If that is not how it would work, would it not be up to the Secretary of State effectively to decide whether someone was to be prosecuted for a criminal offence? That matter has been debated around the House today.

Photo of Lord Thomas of Gresford Lord Thomas of Gresford Shadow Attorney General

I think that prior authorisation is behind the amendment. If there is prior authorisation to carry out the necessary functions of the secret service by bribing someone, how could the DPP afterwards say, in the face of a written authorisation from the Secretary of State, that he or she is going to prosecute that person? It is not possible.

Photo of Lord Mackay of Clashfern Lord Mackay of Clashfern Conservative

The Minister has already dealt with the situation if someone is prosecuted. There is no doubt that, at least in some of these cases, the information necessary for the defence will be highly sensitive. As has been said, it is unthinkable that someone prosecuted would be able to marshal and exhibit these details. The point about our authorisation amendment is that the Secretary of State would deal with that situation. If he deals with it, it will not be necessary for the defence. We do not exercise the dispensing power, although we were accused of doing so, because we say that, before the defence can be used, the matter has to be necessary. However, there is still the possibility of that arising.

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Ministry of Justice, The Parliamentary Under-Secretary of State for Justice

My Lords, more important, prosecuting conduct that has previously been authorised by a Minister, whether specifically or on the basis of a class authorisation, and which is necessary conduct, as the amendment would require, creates huge difficulties if the prosecution is on the basis that the conduct did not, in the view of prosecutors, turn out to be necessary. That raises the prospect of any person so charged being able to challenge the prosecution as an abuse of process, given prior authorisation. That would be the consequence, which we do not think is a satisfactory solution to this issue.

Photo of Lord Mackay of Clashfern Lord Mackay of Clashfern Conservative

How will the person defending himself be able to get the necessary information about the activities of the secret service to lay before the court?

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Ministry of Justice, The Parliamentary Under-Secretary of State for Justice

My Lords, the matter would go, first, to a prosecutor, who would decide, bearing in mind what the clause says, whether there is a defence under the Bill. The flaw in the amendments lies in the fact that the authorisation and the defence would be merged, which would be extremely confusing. If a defendant finds himself eventually in the dock, which we think would be an extremely rare occasion, he has to be able to conduct a proper defence and the court will have to find ways of allowing him to do that.

Photo of Lord Lester of Herne Hill Lord Lester of Herne Hill Spokesperson for Women and Equality

Am I right in thinking that the one thing that cannot happen is for there to be a blowing hot and cold? In other words, once an authorisation has been made, provided that the conduct falls within the authorisation, there is no question of a change of mind subsequently so that the person who has relied on the authorisation finds himself or herself in the dock.

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Ministry of Justice, The Parliamentary Under-Secretary of State for Justice

There may be an issue if the authorisation is of an extremely wide class nature. If the prosecutor felt that the defendant had not acted within the scope of that authorisation, the prosecutor would have to look at Clause 12 to see whether there was a defence.

Photo of Lord Lyell of Markyate Lord Lyell of Markyate Conservative

I agree with the noble Lord, Lord Lester, who has raised an important point. It would almost certainly be quite unconscionable to prosecute in those circumstances. No doubt the Minister will reflect carefully on that.

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Ministry of Justice, The Parliamentary Under-Secretary of State for Justice

It would depend on how wide the authorisation was. That is the point. If it was a class authorisation on a very wide basis, it may not be impossible for the prosecutor to argue, at least, that the conduct of the accused was such as not to bring him within the authorisation. This is the problem with prior authorisations.

Photo of Lord Lester of Herne Hill Lord Lester of Herne Hill Spokesperson for Women and Equality

I agree, but is that not because there would then be the vice of legal uncertainty in the criminal process, which would be unacceptable? That is the vice of an overbroad authorisation.

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Ministry of Justice, The Parliamentary Under-Secretary of State for Justice

The noble and learned Lord, Lord Woolf, said that there was no restraint or supervision under the current scheme. I do not agree. The fact that a defence is provided rather than an exemption, for example, means that the necessity for a payment can be tested by the ultimate arbiter-namely, the courts. As in any case referred to them, prosecutors will, as they always do, independently review the evidence and take into account whether the defence was satisfied in deciding whether the evidential test to prosecute is met.

I remind the House that the intelligence services are subject to a high level of scrutiny, not only by Ministers but by the intelligence service commissioners, the intercept commissioners and other formal scrutinising bodies. Our solution of having a defence in Clause 12 is the most practical, case-specific way of dealing with this issue. There are difficulties with prior authorisations, as they are, in specific terms, unworkable and, in class terms, too general-they do not do anything other than act as a fig leaf for ministerial accountability-unlike the defence in Clause 12, which is specific and can be dealt with by the prosecutor and, if necessary, by the court. To augment the two and put them together, as is proposed in the amendments, would be the worst of both worlds.

For those reasons, I invite the noble Lord, Lord Pannick, to withdraw Amendment 18 and not to move Amendment 30, and I invite the noble Viscount, Lord Colville, not to move Amendments 22 and 31. I must inform the House that I cannot give any comfort that we will come back with an alternative proposal at Third Reading. I reiterate what I said in Committee: the Government attach critical importance to Clause 12. It is for those reasons that I invite the noble Lords not to press their amendments.

Photo of Lord Pannick Lord Pannick Crossbench

I thank the Minister for his careful consideration of this difficult matter and for his courtesy and assistance in providing relevant information to me and to other noble Lords in a meeting earlier this week. I also thank noble Lords who have spoken in this valuable debate.

The core of the issue is that the Minister and the Government are, with respect, not addressing the mischief that is to be found in Clause 12 as currently drafted. It leaves it to the intelligence services and to the Army to decide when an act of bribery by the state is necessary, subject only to the cumbersome weapon of a criminal prosecution after the event. As the noble Lord, Lord Goodlad, pointed out, that will provide little comfort to the officer of state who is conducting the act of bribery.

The relevant amendments-those in my name and the names of the noble and learned Lords, Lord Mackay and Lord Woolf, and those in the name of the noble Viscount, Lord Colville of Culross-seek simply to identify whether there is some legal means for limiting in advance the circumstances in which the state may itself carry out an act of bribery. The search for that legal means has commanded some degree of support in the House today. For my part, I am certainly not wedded to any particular wording. I would be happy-as I am sure other noble Lords who have spoken would be-to discuss with the Government in the next week any wording that builds in a degree of prior authorisation or consideration of the circumstances in which acts of bribery by the state are acceptable, without offending, of course, any constitutional proprieties and without causing practical problems.

The objections raised from the Liberal Democrat Benches are, with respect, misguided as to the effect of our amendment for the reasons given, in particular, by the noble and learned Lord, Lord Mackay of Clashfern. In any event, if the objection from the Liberal Democrats is to the width of a class authorisation, surely they should argue for a tougher authorisation procedure than our amendments propose and not accept a system in which there is no prior authorisation whatever.

We have had a valuable debate. In the hope that the noble Lord the Minister and the Minister in another place will read the report of this debate and consider it, as well as today's further report by your Lordships' Select Committee on the Constitution, and in the hope that they might reflect on whether they can find some means of building in a procedure by which the acceptability of acts of bribery on the part of the state can be considered in advance and not exclusively by the criminal process after the event, I beg leave to withdraw the amendment.

Amendment 18 withdrawn.

Amendment 19

Moved by Lord Bach

19: Clause 12, page 8, line 6, leave out paragraph (a)

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Ministry of Justice, The Parliamentary Under-Secretary of State for Justice 7:15 pm, 2nd February 2010

My Lords, as I attempted to explain in the debate on the previous group of amendments, the purpose of the defence in Clause 12 is to ensure that the authorities concerned are able to carry out their vital public functions without falling foul of the criminal law where the offer or receipt of a financial or other inducement is necessary for the proper exercise of their legitimate functions-for example, to obtain critical intelligence or assistance in the course of their operations.

In Committee, noble Lords quite rightly pressed the Government to justify such a provision, and we have also been conscious of the concerns raised by the Constitution Committee in its initial report on Clause 12. I indicated in Committee that I would reflect on the debate and, in particular, on the wide nature of the definition of a law enforcement agency. As the Constitution Committee noted, this extended beyond the police to other law enforcement agencies such as Her Majesty's Revenue and Customs and the UK Border Agency, as well as local authority, trading standards and environmental health officers.

In responding to the debate in Committee, I indicated that we would examine whether the definition of a law enforcement agency could be narrowed. We have gone one better. After careful reflection on the powerful arguments made in Committee, and following further consultations with the Association of Chief Police Officers, SOCA, HMRC, the UK Border Agency and the Scottish Government, we have concluded that the defence for law enforcement agencies is not absolutely essential to enable them to operate effectively in the fight against serious crime. Government Amendment 19, together with consequential Amendments 24, 26 and 28, would therefore remove subsection (1)(a) from Clause 12.

The removal of the defence as it would apply to those performing functions of the law enforcement agencies results in a much more narrowly focused provision. We remain convinced, however, that the defence is still required for the proper exercise of the functions of the intelligence services and the Armed Forces, which operate in a very different context from that of the police and other law enforcement agencies. In their case, reliance on prosecutorial discretion not to bring criminal charges would not provide appropriate legal certainty for those concerned.

I can deal briefly with our Amendment 27. Clause 12(2) lists the offences for which the defence would be available. These are primarily the offences of bribing another person in Clause 1, except where it would be an offence also under Clause 6, and the offence of being bribed in Clause 2. This technical amendment adds to those already listed an offence committed by aiding, abetting, counselling or procuring the commission of one of those mentioned offences. We always intended for this form of liability across the UK to be covered by Clause 12(2)-as is made clear, I hope, in the Explanatory Notes-but the amendment puts it beyond doubt. Having explained as best I can the government amendments, I look forward to hearing from other noble Lords who have amendments in this group. I beg to move.

Photo of Lord Goodhart Lord Goodhart Liberal Democrat

My Lords, we on these Benches welcome Amendment 19. It is absolutely right to have removed the law enforcement agencies from the Bill.

I shall speak to Amendments 20, 21, 23 and 25, which limit the effects of Clause 12. My noble friend Lord Thomas of Gresford will speak to Amendment 29, which proposes the total removal of Clause 12-which is perhaps one way of getting rid of the difficulty that has kept us going for the past hour.

Amendment 20 deals with the powers of the security services to commit acts of bribery. The functions of the security services under the Security Service Act are threefold: first, ensuring national security; secondly, protecting the economic well-being of the United Kingdom; and, thirdly, the prevention or detection of serious crime. The effect of this amendment is to limit the functions of the Security Service to the first of those three purposes; that is, ensuring national security. I would have no problem in accepting the extension of legitimate functions for the security services to cover the prevention of serious crime, but that did not get into my amendment.

However, there is no justification for allowing bribery to be used for the second purpose of the security services; that is, protecting economic well-being. The Government might well be interested to know about, let us say, Chinese plans to intervene in markets which had up to then been dominated by British businesses. Inside information about Chinese plans and whether they might be damaging to the United Kingdom economy could well be useful to the United Kingdom Government, but they present no threat to national security. The Security Service should not therefore be entitled to pay bribes for information given by some member of this Chinese team. Bribery is after all, as I think we all recognise, a devastating disease in many parts of the world, and it should be used only for national security and the prevention of serious crime. It should not be used where the information is a matter only of preventing economic damage. As chapter 12 of its report shows, the Joint Committee believes that, even if authorisation can legitimately be granted to the secret services to commit bribery, it should be limited to the protection of national security and the detection or prevention of serious crime.

I move on to Amendment 21. The equivalent clause in the Bill presented to the Joint Committee permitted the security services, and the security services only, to bribe when necessary for their proper functions. The Joint Committee proposed unanimously the removal of that clause. When this Bill was introduced to Parliament, the legal authority for bribery was not only retained for the purposes of the Security Service but extended to law enforcement agencies and the Armed Forces when on active service. Government Amendment 19 will remove law enforcement agencies from the list of those permitted to bribe, which we welcome, but it does not remove the Armed Forces.

It has never been explained why the Armed Forces were added in the first place. I can imagine that the Government have in mind the paying of members of the Taliban to change sides and problems similar to that. I cannot imagine that there would ever be a prosecution, let alone a conviction, for that, so I invite in relation to Amendment 21 the Minister to explain why it is thought necessary to give the Armed Forces a right of bribery and why, if it was important enough to require this legislation, the issue was never raised in either the draft Bill or the evidence presented to the Joint Committee. Amendments 23 and 25 are consequential on Amendment 21.

I should give advance warning that, unless we hear satisfactory answers to the issue that I have raised under Amendment 20, we are likely to call a vote, not in the expectation of winning-although we would of course like that-but to make perfectly plain our concern about the way in which the power to legitimate bribery has been overdone.

Photo of Lord Henley Lord Henley Shadow Minister, Justice

I intervene briefly to say to the Government that we welcome their amendment to delete subsection (1)(a) from Clause 12, which goes a long way to meeting a great many of our concerns, particularly following the meetings that the Minister was happy to arrange between us and his colleagues in the department.

I have only one question to put to the Minister, which he possibly partially answered in his opening remarks. "Law enforcement agency" includes a wide number of bodies, among them the police. I think that he would accept that paying for information can be a useful weapon in the fight against crime. Will the police have from now on to rely entirely on prosecutorial discretion to avoid prosecution on occasions when they find it necessary to offer bribes for what might be termed "legitimate purposes"?

Photo of Lord Williamson of Horton Lord Williamson of Horton Crossbench 7:30 pm, 2nd February 2010

Amendment 19-bravo! Amendment 20 would leave out any function of the intelligence services and limit the possibility to functions relating to national security and the prevention of serious crime. I drew attention to the words "any function" when the matter was discussed in Grand Committee. It is an important point and, as we are likely to have a vote on it, it would be very helpful if the Minister could indicate the extent to which operationally it is possible for the intelligence services to distinguish between these functions. On paper, it is quite easy to distinguish those relating to economic well-being, as they are linked perhaps to the prevention of serious crime and the other elements. It would be helpful to know whether the Government's position is that they cannot be easily differentiated.

Photo of Lord Archer of Sandwell Lord Archer of Sandwell Labour

My Lords, I had not previously intervened on your Lordships' discussion on this Bill and I would have been very reluctant to do so at this stage if a matter of some importance had not been drawn to my attention. I accept that if I had been more assiduous I would have grasped it earlier, when I could have discussed it with the noble Lords, Lord Goodhart and Lord Thomas, and with my noble friends on the Front Bench.

While we are on the subject of Amendment 20, I advance two propositions, which your Lordships may think are self-evident. The first is that this country relies very heavily on the collection and processing of intelligence for its national security and for dealing with serious crime and terrorism. The work of the intelligence services may save the lives of many thousands of people. The second proposition is that the effectiveness of those who process the intelligence depends entirely on not letting those under surveillance know either that they are under surveillance or what the methods or capabilities are of those who carry out the work.

Clause 12 presents a problem at the stage when there is a prosecution. If, as some noble Lords suggested, there never are any prosecutions, the question may not arise-but it rather raises the question, "Why create an offence?", if it is never going to be prosecuted. If there is a prosecution and the defence relies on Clause 12, it will have to establish that what was done was necessary for any function of the security service. That can be done only if it identifies the function; it will need to describe it and say what is entailed by processing it and say what is done by those who exercise it. If the prosecution wished to challenge the defence, it would need to ask questions about the nature of the function, who exercises it and what they will have to do to exercise it. If the jury has to decide on the defence, it will have to have explained to it the nature of the function, what it entailed and what was done under it. That is going to be very difficult without disclosing just the very things that the security agencies are desperate not to have widely known. Of course, if something emerges once-if a secret emerges-it will no longer be a secret. You cannot close the door afterwards or reverse the process, and a great deal of damage may have been done to the capabilities of the agencies. It will require a very wise and strong judge to hold the balance between questions that are necessary for a fair trial and the security of those who have to carry out these very difficult capabilities. I can see that those who take part in the case will be treading on eggshells. If they make a mistake once and if, once, something emerges that is very damaging to the services, it will be too late to reverse the operation.

I recognise the need for Clause 12 and understand that the security services are dealing with personnel who have very difficult jobs. They want to be assured that they will not be convicted of a criminal offence, so all our discussions today have been directed to that point. It will not be enough to say, "Oh well, we never know quite what the outcome of the proceedings will be, but you probably won't be convicted". They will need to be assured that they are not in danger of conviction, which would have to be achieved either by Clause 12 or by the other safeguards suggested in the course of the debate. For that reason, I recognise the need for Clause 12, unless some of the other amendments find their way on to the statute book. It would probably be possible to keep the evidence sufficiently unspecific for the major damage to the agencies to be avoided but, if there were some amendment that would avoid that difficulty, I would be minded to support it, and I shall listen with great interest to what follows in this debate. The suggestion made by the noble Lord, Lord Goodhart, in Amendment 20 is likely not to modify the situation but to exacerbate it. If you circumscribe the functions that will qualify for the defence, it will be necessary to ask even more questions. The details will become more detailed. I should have thought that that answer would cause a great deal of problems to our courts. For that reason, I venture to draw attention to this problem for your Lordships.

Photo of Baroness Whitaker Baroness Whitaker Labour

My Lords, like the noble Lord, Lord Williamson of Horton, I ask a question of my noble friend in connection with Amendment 20. I am concerned about the pursuit of a national economic well-being. I have looked at the further report of the Constitution Committee, published today, and helpfully referred to by my noble friend. I assume that it is now content that economic well-being is properly within the scope of the defence. Nevertheless, I return to Article 5 of the OECD convention, which says that in the course of investigation and prosecution of the foreign public official, the state's party,

"shall not be influenced by considerations of national economic interest".

I would be grateful if my noble friend would confirm how Clause 12, as currently drafted with the government amendment, which I support, complies with the OECD convention.

Photo of Lord Thomas of Gresford Lord Thomas of Gresford Shadow Attorney General

One concern that we have had on these Benches is with Article 5 of the OECD convention-namely, that the national economic health of the country cannot be sustained by bribery. That is one reason why we have sought to limit in our amendment the right of the security services in the interests of national security. The security services are charged not only with national security but with the national economic well-being of the country.

The more that one looks at the clause, the more one realises how impossible it would be for a person charged with an offence to adduce it before a jury. The noble and learned Lord, Lord Archer of Sandwell, made the point a moment ago that there would be no ability on the part of the defendant to go into the security services and obtain the material that he would need to sustain his defence. Further, in sustaining his defence, unless the hearing was completely in camera-I have had experience of that where security was involved-then what he was saying about the function of the security services would be there for the jury to disseminate, and if it were not in camera it would be for the press to listen to and disseminate as well. It would be almost impossible for a person to sustain that defence where the security services were involved.

The immunity of the Armed Forces when engaged on active service is limited to actions,

"against an enemy ... an operation outside the British Islands for the protection of life or property; or ... the military occupation of a foreign country".

How can a person charged at the Old Bailey conceivably put together a defence to show that his conduct in bribing someone in Afghanistan was necessary for the proper exercise of a function of the Armed Forces? Who can he call? Where are the documents? Where are the witnesses? It is just impossible for that to be sustained.

The problem that the Government want to solve is how to give assurance to security services and Army personnel that they will not be prosecuted, but I do not think you can do it with this Bill. You certainly cannot do it by having a defence of this sort. You might have a simple Clause 12 setting out an authorisation scheme, but not related to this sort of artificial defence. You could have something that said, "The Minister may authorise", but the Government say that that is impractical and cannot be done.

So what is the way to give assurance to security service and Army personnel that they will not be prosecuted for bribery? I have sat here and thought about it. To my mind, the only conceivable way to do it is to have firm prosecutorial guidance set out for the Director of Public Prosecutions or the Serious Fraud Office director to advise their staff that prosecutions under the Act will simply not happen where the security services or the Armed Forces are performing their functions properly-in other words, a strong direction to the prosecutor not to bring proceedings in the first place.

What are the advantages of that approach? The main advantage is that if there is some secret material involved, that can be communicated to the Director of Public Prosecutions or the other agencies without any publicity. If he is in doubt about whether a person should be prosecuted, he can contact the security services or the Army and say, "In his interview, the defendant said that he was told by Colonel So-and-so to go and bribe the head man in a village in Afghanistan for a particular purpose. Is that correct?", and in private the colonel writes back and says yes, that is correct, or no, it is not. At least the decision is taken without all the publicity to which the noble and learned Lord, Lord Archer, referred in his speech.

This defence is impossible to run on a practical level without compromising the functions of the security services. It cannot work. An authorisation scheme is the obvious answer-but the Minister says that it is impracticable. How much bribery is going on, for heaven's sake? How much are we concerned with? If there is a lot of bribery going on, the Minister will no doubt give us some figures about what it is adding to the national debt. One cannot imagine, though, that there is so much involved that it is impossible to get a straightforward authorisation scheme such as we have, as the noble and learned Lord, Lord Mackay, has pointed out, with regard to the security services elsewhere. If that is impractical, then it is only by strong direction to the Director of Public Prosecutions and other directors that this problem can be solved and the people concerned can be given the assurance that they need. That is why I shall be moving in due course that this whole clause should be struck out, not because I do not see that there is a problem but because this is not the solution.

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Ministry of Justice, The Parliamentary Under-Secretary of State for Justice 7:45 pm, 2nd February 2010

My Lords, Amendments 20, 21, 23, 25 and 29 offer us two alternatives. Amendment 29 would strike out the whole clause while the other amendments would limit the defence as it applies to the intelligence services and deny the defence to those pursuing the legitimate functions of the Armed Forces. Let me try to deal with the broader proposition first-in other words, Amendment 29.

In our judgment, it is important that we provide a defence for the proper exercise of the functions of the intelligence services and the Armed Forces engaged on active service. There will be occasions when the intelligence services and the Armed Forces have to engage in conduct that amounts to an offence under the Bill, not under Clause 12 but under other clauses. That will be the case whenever a financial or other advantage is used with the intention to induce or reward the improper performance of a relevant function of a public nature or any activity connected to a business or employment. It is important that the individuals tasked with carrying out these important functions can do so on the basis of a secure and transparent legal footing.

Some noble Lords have argued that this concern can equally be addressed through the exercise of prosecutorial discretion-the noble Lord, Lord Thomas, suggested that just now-and the public interest test. We have to say that such an approach would not provide the necessary legal certainty in the context of the work of the intelligence services and Armed Forces. Individuals who exercise these important functions on behalf of all of us, of our country, have a right to expect appropriate legal cover for their conduct when discharging their duties. To ask someone to offer a bribe in the knowledge and belief that their actions were unlawful would place these personnel in an invidious position, even if no prosecution followed.

The defence makes it clear that, should a person exercising a relevant function set out in Clause 12(1)(b) or 12(1)(c) ever be charged with an offence, he or she would have a defence that could be put before the court. Clause 12 will also assist prosecutors in deciding whether a prosecution should be brought.

So when there is a suspicion that someone has committed the offence of bribery under the Bill, the first thing that will happen will be that the prosecutor looking at whether a charge should be brought and the prosecution continued will look at the defence in Clause 12 and decide whether a prosecution should be brought in those circumstances. If they decide-as they nearly always will, one might surmise-that a prosecution will not be brought because it comes under the defence in Clause 12, then the matter will not go to court. The further protection for someone when the prosecutor looks at a case and decides that it should go to court, because they are not satisfied that it falls within Clause 12, will be the jury. That person will have the chance to persuade a jury, on balance, that they too are covered by Clause 12.

The noble Lord, Lord Thomas, said that the defence cannot work. He assumes that the only value of the defence is in the course of the trial, but that is not the case. As well as providing the legal certainty we should be seeking for the intelligence services and Armed Forces, the defence provides a clear pointer for prosecutors when deciding whether or not to charge a person with an offence under the Bill. Can the defence work? The noble Lord thinks that it cannot, but Parliament has already approved something very similar in Section 1(1)(b) of the Protection of Children Act 1978.

Photo of Lord Thomas of Gresford Lord Thomas of Gresford Shadow Attorney General

We are not dealing with pornography. We are not dealing with secret documents. We are not dealing with overseas matters such as what is happening in Afghanistan or Iraq. We are dealing with something that is open in any event. The child pornography analogy simply does not work.

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Ministry of Justice, The Parliamentary Under-Secretary of State for Justice

It is precisely the same sort of defence. It is set out in the same way as the defence that we are proposing in the Bill. We remain convinced that there is a need for the Bill to cater for those who work for the intelligence services or who are members of the Armed Forces who would otherwise be at risk of prosecution under the Bill in performing their vital functions on behalf of all of us. Indeed, the Joint Committee that scrutinised the 2003 draft Corruption Bill appeared to accept the need in principle for a provision relating to the intelligence services.

Clause 12 provides that legal certainty and transparency in the form of a defence that will apply only where the conduct is assessed as necessary in accordance with the respective functions of the intelligence services and Armed Forces. Ultimately, whether the defence case is made out will be a matter for the court or jury.

Amendment 20 would limit the operation of the defence for the intelligence services to functions relating to national security. We believe that this would undermine the ability of the intelligence services to combat all relevant threats to the United Kingdom. The defence for the intelligence services in Clause 12(1)(b) correctly, in our view, applies to the,

"the proper exercise of any function of the Security Service, the Secret Intelligence Service or GCHQ".

Parliament has conferred statutory functions on the Security Service relating to national security, economic well-being and acting in support of law enforcement agencies in the prevention and detection of serious crime, while in the case of GCHQ and SIS, Parliament has determined that their respective functions should be exercisable for the purposes of national security, the economic well-being of the nation and the prevention and detection of serious crime.

We are very concerned to respect our international obligations to combat bribery and we are confident that the defence, as currently drafted, is consistent with our obligations and, in particular, with the relevant OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. As I made clear in the previous debate, we have specifically excluded from the definition of a "relevant bribery offence" for the purposes of this clause conduct that would amount to an offence under Clause 6 of the Bill; that is conduct that would amount to the bribing of a foreign public official with the intention to obtain or retain business or an advantage in the conduct of business. I hope that that goes some way to satisfying the House, especially my noble friend Lady Whitaker who asked a particular question about that.

Restricting the defence to functions relating to national security is in our view unjustified. Indeed, the proposed amendment goes further than the Constitution Committee, whose report of 4 December appeared to accept that,

"there may be a case for such a defence in the context of the Security and Secret Intelligence Services' statutory functions in connection with national security and with the prevention and detection of serious crime".

But we take issue with the Constitution Committee's earlier criticism of the extension of the defence to the services' statutory function,

"to safeguard the economic well-being of the United Kingdom', as set out in its December report.

As we tried to make clear in our response to the Select Committee, the intelligence services may need to take action to monitor events and trends to safeguard the well-being of the United Kingdom, which is one of their statutory functions. That could include intelligence or instability in a part of the world where substantial UK economic interests were at stake. It might also concern threats to the supply of energy or other commodities vital to the UK economy; or external attempts to manipulate commercial markets, especially where such actions could undermine confidence in the City of London or the stability of other financial markets.

In answer to the question asked by the noble Lord, Lord Williamson, through the examples that I have given, I have tried to make it clear that not all the matters falling to the intelligence services relate simply to national security, and that there is an operational need for the defence to cover the full range of statutory functions, including economic well-being and the prevention and detection of serious crime. I welcome the fact that in its latest report, hot off the press today, the Constitution Committee seems to have accepted, or at least not disputed, the Government's explanation for including the intelligence services' economic well-being function.

On Amendment 21, which seeks to strike out the defence as it applies to the functions of the Armed Forces, we regard it as just as important that we should not criminalise conduct that would amount to bribery by those performing functions of the Armed Forces where it is necessary for the proper exercise of those functions during active service. There may be occasions in the course of military operations when conduct that would amount to bribery under the Bill will be required. We can all think of examples-to secure critical intelligence or assistance in support of operational effectiveness or to ensure the safety of military personnel. Service personnel should not be put in a position whereby they have committed a criminal offence under the Bill by the proper performance of their duties. That would put their commanders in an impossible and unacceptable position when issuing orders.

This House always recognises the dedication, professionalism and sacrifice of members of the Armed Forces and we owe a considerable debt to the members of our Armed Forces on active service. Clause 12(1)(c) provides the appropriate legal certainty that where members of the Armed Forces are faced with difficult operational circumstances that require the use of financial or similar inducements to achieve their objectives, they will not risk prosecution.

We have listened and responded to the concerns about the breadth of the clause as drafted. On further reflection, we are content to make a significant change to the clause by removing the limb of the defence that applies to law enforcement agencies. To answer the noble Lord, Lord Henley, the police will have to rely on prosecutorial discretions. But we remain firmly of the view that it is essential for the effective operation of the intelligence services and Armed Forces that we retain the defence as it applies to them. I hope that what I am saying will be taken seriously: Clause 12, in its amended form, is for the Government a vital and crucial part of this Bill.

I invite the House to accept the government amendment and agree that the clause should otherwise remain as it is. If the noble Lords, Lord Goodhart and Lord Thomas, were minded to press either of their amendments to a Division, I strongly urge the House to reject them.

Amendment 19 agreed.

Amendment 20

Moved by Lord Goodhart

20: Clause 12, page 8, line 8, leave out "any function of" and insert "functions relating to national security by"

Photo of Lord Goodhart Lord Goodhart Liberal Democrat

My Lords, I propose now to ask for the opinion of the House on something that will be short and simple. We have had a very long debate on a number of scattered provisions and problems arising from Clause 12, to a degree that was wholly unexpected. Certainly, I was not expecting it and I doubt that the Minister was. Amendment 20 raises only one short and simple issue. I am not proposing to call a vote on Amendment 21. The question is: should the functions of the security services include using bribery to obtain information relevant to protecting the economic well-being of the country, but not relevant to national security or the prevention of serious crime? We say that the function of the security services should not be extended to bribery which is solely for the purpose of protecting economic well-being; that is the purpose that would be achieved by Amendment 20. I wish to take the opinion of the House.

Division on Amendment 20

Contents 41; Not-Contents 111.

Amendment 20 disagreed.

Division number 1 Bribery Bill [HL] — Report

Aye: 39 Members of the House of Lords

No: 109 Members of the House of Lords

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Amendments 21 to 23 not moved.

Amendment 24

Moved by Lord Bach

24: Clause 12, page 8, leave out lines 20 to 25

Amendment 24 agreed.

Amendment 25 not moved.

Amendments 26 to 28

Moved by Lord Bach

26: Clause 12, page 8, leave out lines 29 to 33

27: Clause 12, page 8, line 37, at end insert-

"(ba) an offence committed by aiding, abetting, counselling or procuring the commission of an offence falling within paragraph (a) or (b),"

28: Clause 12, page 8, leave out lines 44 and 45

Amendments 26 to 28 agreed.

Amendment 29

Tabled by Lord Thomas of Gresford

29: Clause 12, leave out Clause 12

Photo of Lord Thomas of Gresford Lord Thomas of Gresford Shadow Attorney General 8:12 pm, 2nd February 2010

My Lords, now that the pressure of the following debate has been removed from us and we have lost much of our audience, your Lordships will forgive me if I move this amendment merely to make the following point. The Minister said that it was necessary to assure members of the security services et cetera that they were not bribing anybody. However, they commit bribery if they offer money; the offence of bribery will be committed by a member of the Armed Forces or a member of the security services. He simply has a defence which he has to prove. If he fails to prove that defence, he is guilty of the offence of bribery, so he is bribing. That is why I ask the Minister please to look at this again. Surely, he can draft a clause which says, for example, it shall not be an offence for a person who is a member of the security services et cetera to do what is said in Clause 1 if it is under whatever conditions he likes to lay down. That would be a far better assurance to the members of the security services.

I shall not divide the House again on this issue, your Lordships will be relieved to hear.

Noble Lords:

Oh!

Photo of Lord Thomas of Gresford Lord Thomas of Gresford Shadow Attorney General

I can see that the Conservative Benches are anxious to take another walk through the Lobbies but I do not propose to allow that, although I am told that they did not walk last time. I shall not move the amendment.

Amendment 29 not moved.

Amendment 30 not moved.

Amendment 30A (to Amendment 30) not moved.

Clause 16 : Consequential provision

Amendment 31 not moved.