As governments around the world watch the rising tide of public sentiment and law enforcement actions against corruption,[1] some are looking to the United Kingdom Bribery Act 2010 (the “Act”) as a model for crafting their own criminal sanctions, including with regard to corporate criminal liability.[2] Section 7 of the Act, which is captioned, “Failure of commercial organization to prevent bribery,” defines the offense in just 45 words:
A relevant commercial organisation (“C”) is guilty of an offence under this section if a person (“A”) associated with C bribes another person intending—
(a) to obtain or retain business for C, or
(b) to obtain or retain an advantage in the conduct of business for C.[3]
Unless the company, as an affirmative defense, can “prove that [it] had in place adequate procedures designed to prevent persons associated with [it] from undertaking such conduct,”[4] it faces a criminal fine without statutory limit.[5]
The Section 7 “failure to prevent” model has proved popular in some quarters. The United Kingdom has since used it to craft new criminal offenses for “failure to prevent” facilitation of tax evasion; some jurisdictions, such as Bermuda and Kenya, have adopted “failure to prevent” corporate offenses closely based on Section 7; and Australia and Ireland are actively considering similar legislation.[6]
Popularity, however, is no guarantee of soundness. A close analysis of Section 7 shows that it contains a critical flaw: as currently drafted, it violates the principle of fair warning, which has long been a fundamental requirement of English and U.S. law.
United Kingdom and American courts and commentators are closely aligned on the concept and scope of the “fair warning” principle. In the United Kingdom, “those subject to the law must be able to ascertain what the law is and therefore to foresee any legal consequences of particular actions, rather than being taken by surprise after the event.”[7] The principle also makes clear that “[i]ndividuals ought not to be left to guess at what they can or cannot do without infringing the criminal law and subjecting themselves to punishment.”[8] Similarly, American law, grounded in the Due Process Clauses, requires in any criminal statute that “a fair warning should be given to the world in language that the common world will understand, of what the law intends to do if a certain line is passed.”[9] In addition, American courts will “ba[r] enforcement of ‘a statute which either forbids or requires the doing of an act in terms so vague that men of common intelligence must necessarily guess at its meaning and differ as to its application’.”[10]
In drafting and debating Section 7, members of the United Kingdom Parliament made two critical errors. First, they unwittingly created confusion about what standard of criminal liability they were choosing for the new offense. The words of Subsection 7(1) appear to make it a “vicarious criminal liability” offense, but both Parliament and the United Kingdom Serious Fraud Office repeatedly characterized it, and expressed their intent that it be charged, as a “failure to prevent” offense.[11] In fact, the United Kingdom Ministry of Justice’s guidance on Section 7 clearly states that that section “creates a new form of corporate liability for failing to prevent bribery on behalf of a commercial organization.”[12] Clearly the same criminal offense cannot be grounded in language referring to two inconsistent bases for criminal liability — traditional vicarious liability and “new” failure to prevent — without violating fundamental principles of the rule of law.
Second, even if one were to assume that the actus reus and gravamen of Section 7 are “failure to prevent bribery,” nowhere does the Act define the generic terms “failure,” “failure to prevent bribery,” or “adequate procedures designed to prevent [associated persons from bribing].” It is a commonplace in English and U.S. law that the term “failure” provides a sound basis for criminal sanctions only if there is a specific corresponding, pre-existing legal duty to act.
Specifying the pertinent legal duty to act or including definitional language, then, is essential to providing fair warning. Section 7, however, does not define a specific legal duty regarding the prevention of bribery. In addition, neither the Act nor the Ministry of Justice Guidance provides any objective standard by which to determine the adequacy of “adequate procedures.” Consequently, these critical terms are so vague and amorphous that they fail to give fair warning and therefore pose a risk of arbitrary enforcement by prosecutors.
It is not too much to ask that a legislature drafting any criminal offense choose one standard of liability for that offense and be articulate about the standard it is choosing. To tout corporate criminal legislation — as the United Kingdom government has done with the Act — on the ground that it is “some of the world’s strictest legislation on bribery”[13] means little if a legislature fails clearly to define critical terms in that legislation, or cedes the difficult task of providing such definition to a government department that, while professing its commitment to advancing the rule of law,[14] can revise that definition at will.
No matter how important it is to combat bribery and corruption as a public policy objective, corporate entities, no less than individuals, are entitled to fair warning of what they may and may not do in seeking to avoid and prevent bribery.
Footnotes
[1] See Vikram Khanna, The rising global tide against bribery, Singapore Straits Times, January 17, 2018; Jonathan J. Rusch, Section 7 of the United Kingdom Bribery Act 2010: A “Fair Warning” Perlustration, 43 Yale J. Int’l L. Online 1, 1-2 (2017).
[2] See Jonathan J. Rusch, supra note 1, at 4.
[3] Bribery Act 2010, c. 23 (Eng.), §7(1).
[4] Id. §7(2).
[5] See id. §11(3).
[6] See Jonathan J. Rusch, supra note 1, at 4-5.
[7] Richard Card, Card, Cross & Jones Criminal Law § 1.34 at 15 (21st ed. 2014).
[8] Dowds v. R., [2012] EWCA (Crim) 281 [36], [2012] 1 WLR 2576.
[9] McBoyle v. United States, 283 U.S. 25, 27 (1931).
[10] United States v. Lanier, 520 U.S. 259, 266 (1997) (quoting Connally v. Gen. Constr. Co., 269 U.S. 385, 391 (1926)).
[11] See, e.g., Rusch, supra note 1, at 11-13.
[12] Ministry of Justice, The Bribery Act: Guidance 8 (2011) (PDF: 390 KB).
[13] Anti-Corruption Summit 2016, Gov’t of the UK.
[14] Ministry of Justice, About Us, (last visited Feb. 8, 2018).
Jonathan J. Rusch is Adjunct Professor of Law at Georgetown University Law Center and Head of Anti-Bribery & Corruption Governance at Wells Fargo.
The above post is adapted from Professor Rusch’s essay (PDF: 420 KB) in The Yale Journal of International Law Online.
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