As explained in earlier posts (here and here), I am working with the Open Society Justice Initiative on a project to examine how civil society can prompt more corruption-related litigation — either by stimulating criminal prosecutions or filing civil suits itself.
One area that remains a puzzle is why businesses are not filing more civil suits for damages caused by bribery. At common law, if a merchant could show it lost a customer to a bribe-payer, it could sue the briber for tortuous interference with contractual relations and the bribe-taking employee for breach of fiduciary duty. A merchant that discovered it had paid higher prices or bought goods of a lesser quality because the seller had bribed one of its employees likewise had an action for damages, against the employee for breach of fiduciary duty and for fraud against the bribe-payer. The Civil Law Consequences of Corruption, a 2009 volume edited by Professor Olaf Myer, describes similar doctrines that corruption victims in countries governed by the civil law can invoke to recover damages. Moreover, regardless of legal heritage, parties to the United Nations Convention Against Corruption are required by article 35 —
“to 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 in order to obtain compensation.”
Am I missing something? Or is there only one country where businesses that are victims of corruption are heeding the invitation to sue for damages? And if so, why is this case? Why aren’t businesses in other nations besides this one seeking compensation for the losses bribe-paying has caused them? Continue reading