Encouraging More Corruption-Related Litigation?

On June 28 the Oxford Institute for Ethics, Law and Armed Conflict and the Open Society Foundations’ Justice Initiative will, with the help of this writer, host a one-day conference at the Said Business School entitled Legal Remedies for Corruption to discuss ways civil society can stimulate corruption-related litigation – either by pressuring prosecutors to file more criminal cases or by bringing their own civil actions for damages.

The question mark in the title is for American readers who might be forgiven for asking why such a conference is necessary.  Isn’t there enough litigation already? The U.S. Department of Justice and Securities & Exchange Commission continue to vigorously enforce the Foreign Corrupt Practices Act, while the Justice Department’s Public Integrity Section continues to ferret out corrupt federal, state, and local officials.  In 2012, the last year for which data is available, the section charged more than 1,000 individuals with accepting bribes, criminal conflict of interest, and other corruption offenses. And private parties in the U.S. have also been willing to sue alleged bribe payers, with suits brought by a range of injured parties including competitors, suppliers, partners, shareholders, and employee-whistleblowers.  Even foreign governments have taken advantage of American law’s broad standing rules and generous theories of damages: One alleged bribe payer recently paid a company owned by the Government of Bahrain $85 million to settle a claim it had harmed the company by bribing one of its employees to secure a contract, while the government of Trinidad has brought an action under Florida’s version of the Racketeer and Corrupt Organizations Act against the companies that allegedly rigged bids on an airport construction project in Port of Spain.

It turns out that while there is a great deal of litigation — public and private — over bribery allegations in the United States, this is much less true in most of the rest of the world.

To be sure, as OECD and Transparency International reports show, several OECD countries are stepping up prosecutions for the bribery of foreign officials; and civil society activists have instigated some important cases.  International NGOs have initiated cases in France and Spain against the ruling cliques of Equatorial Guinea, Gabon, and the Republic of the Congo for the wholesale theft of their nation’s resources. And, thanks to an action brought by SERAP, the Socio-Economic Rights and Accountability Project, the Economic Council of West African States’ Community Court of Justice ordered the Nigerian government to restore education funds lost through corruption. Civil society groups in South Africa (click here and here for cases) and India (here, here and here for illustrative cases) have also won some important corruption-related public interest cases.

But these few cases, and a handful more in other jurisdictions, are all that internet searches, a canvass of social science and legal journals, interviews with civil society activists, and a request for information directed to over 200 alternative law groups in more than 50 countries revealed. (There may be more, and one aim of the Legal Remedies conference will be see if anything has been overlooked. That is also one reason for this post; readers with information about private actions for damages arising from corrupt acts in other nations are asked to post a comment with details.) Why haven’t more cases been brought?  While in some nations the courts are so weak that potential plaintiffs would see little chance of success, this is not true everywhere.  European courts and the European Court of Justice are hardly docile and the ECOWAS court was not shy about ruling against Nigeria in the SERAP action.

Nor does it appear that a lack of law or legal doctrine is holding back litigation.  A recent analysis of the laws of eight European states identified various legal theories that would support private actions for damages.  More significantly, the 171 nations party to the United Nations Convention Against Corruption must, by article 35, ensure “that entities or persons who have suffered damage as a result of an act of corruption have the right to initiate legal proceedings against those responsible for that damage;” a similar provision in the Civil Law Convention of the Council of Europe binding European states has been in force for over a decade.

Why, in the battle against corruption, has litigation in national and international courts not played a more prominent role?  And what can be done to strengthen their role?  The June 28 Legal Remedies conference will likely not provide definitive answers to these questions; it will be enough if it helps start a dialogue on what to do and how to do it.  Readers who are lucky enough to find themselves in Oxford on June 28 are welcome to attend.  Those unable to attend are invited to contribute to the dialogue by commenting on this post.

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