Beginning from the simple and indisputable premise that those harmed by corruption should be able to do something about it, Professor Abiola Makinwa of the Hague University of Applied Sciences develops a novel approach to attacking the ubiquitous problem of corruption in public procurement. To appreciate it, take an example. Suppose government awards a contract to a company to build a road so farmers in the region can more easily and cheaply bring their products to market. Suppose further that thanks to corruption the road is either never built or it quickly becomes impassable. Who suffers most from the construction company’s failure to perform the road building contract? Who has the greatest stake in remedying the wrong?
The answer to both questions is clearly “the farmers,” yet as Professor Makinwa explains in a paper written for the Open Society Foundations’ Justice Initiative project on what civil society can do to step up enforcement of the anticorruption laws, the farmers have no legal right to sue for breach of contract. This holds whether the farmers live in a country governed by the civil law or the common law. In both, the general rule is that only parties to a contract can sue for its breach. Hence, in the case of the breach of the contract between the government and the road contractor for the contractor’s failure to build the road, only the government can haul the contractor into court.
But while that’s the general rule in both common and civil law systems, both systems recognize that there will be times when the principal beneficiary of the contract is a third-party and both permit the parties to a contract to give that third-party a right to sue for its breach. When in a public procurement there is an easily identifiable group of beneficiaries, like the farmers in the example, why shouldn’t these third-party beneficiaries have the right to sue? Professor Makinwa makes a strong case that they should while at the same time suggesting ways to ensure including third-party rights in public contracts does not result in a litigation free-for-all. Governments and civil society groups looking for ways to bolster the enforcement of the anticorruption laws would do well to examine her proposal carefully.
Professor Makinwa’s paper is the seventh in a series commissioned by the Open Society Justice Initiative on civil society and anticorruption litigation. It follows earlier ones on i) standing by GAB editor-in-chief Matthew Stephenson, ii) civil society litigation in India by Vidhi Centre for Legal Policy Director Arghya Sengupta, iii) private suits for defrauding government by Houston Law School Professor David Kwok, iv) private prosecution in the U.K. by Tamlyn Edmonds and David Jugnarain, v) damages for bribery under American law by this writer, and vi) public trust theory by Professor Elmarie van der Schyff, a professor of law at South Africa’s North-West University. The papers are all available here.