What are the civil consequences of bribery in your jurisdiction?
Bribery & Corruption (2nd edition)
There is a general article in the Anti-Unfair Competition Law which stipulates that business operators that have caused damages to others, shall bear the civil liabilities without further specifying the details. Unlike other jurisdictions such as the United States where the authorities (eg, the Department of Justice and the Securities and Exchange Commission) would implement the civil penalties on the offenders, civil consequences in China are only resolved through civil disputes, where the aggrieved party of the bribery could bring a lawsuit in court or use other alternative dispute resolution channels. However, China does have a similar mechanism reflected in the administrative penalties imposed by authorities such as the Administration for Market Regulation (“AMR”), which could include a fine ranging from RMB 100,000 to 3,000,000, confiscation of illegal gains, and the revocation of business license in serious circumstances.
As generally provided for by the French criminal procedure code, anyone who has personally suffered a loss directly caused by the offence of bribery is entitled to claim damages.
In addition, the provisions of the criminal procedure code specifically allow two types of legal entities - provided they meet certain conditions, such as being at least 5 years old - to file a civil claim:
- Associations the purpose of which is to fight against corruption; and,
- Foundations recognized as being of public interest.
Under civil law (sections 134, 138 (1) Civil Law Code), contracts proven to be connected with a bribe are null and void, payment of damages or rescission of the contract are possible consequences.
The aggrieved company may be entitled to claim damages from the perpetrator or the company he/she is acting for, on the basis of a breach of competition law or sections 823, 826 of the Civil Law Code. The company may even sue its own employee for breach of contractual duties, and terminate the contract without notice. However, the corporate entity bribing someone may also be able to hold the perpetrator or management (section 93 (2) Stock Corporation Act and section 43 (2) Limited Liability Companies Act) responsible for the act committed.
According to section 6 (2) No. 3 of the German Construction Contract Procedures (VOB/A, 2016) a company’s offer in relation to construction services could be excluded if the company was involved in a serious case of misconduct.
Civil consequences may arise either from provisions of the Greek Civil Code or the provisions included in the Civil Law Convention on Corruption in 2001 (Law No. 2957/2001). Apart from seeking compensation, entities that have gained unlawful advantage or benefit through acts of bribery may face consequences such as annulment of agreements/contracts and claims for related damages.
If an employee commits an offence under the 2018 Act this may give rise to a civil cause of action against the employee to recover damages in respect of any loss to the business.
A person who obtains a benefit by reason of a fiduciary relationship may also be required to account for the unauthorised profit made by him.
Even if there are not specific civil consequences of bribery, the act performed by a relevant person who has been bribed in order to do so, might be considered voidable. Moreover, of course, the person who has received the bribe and the person who has provided it are to be considered civilly liable for any damage caused by their misconduct to third parties.
A person who suffered damages resulting from a bribery can seek relief before the court; the victim can choose to direct himself to a civil or to a criminal court. If a criminal case is initiated prior to or during civil proceedings, such civil proceedings are suspended until the finalisation of the criminal proceedings.
The Act of 20 March 1991 on the approval of contractors provides for the possibility of refusing or suspending the recognition of a contractor if he/she commits certain acts of public bribery. The person convicted of public bribery cannot apply for public contracts according to the Act of 17 June 2016 on Public Procurement.
A person who commits bribery may be subject to civil disciplinary action under applicable laws. It is also possible that if such person causes damage to his/her organization by committing bribery, he/she may be liable for damages arising from a breach of the statutory duty of care.
The EACC may institute civil proceedings against any individual. The EACC may also negotiate and enter a settlement with any person against whom it intends to bring or has brought a civil claim. Pursuant to section 56B of the Anti-Corruption and Economic Crimes Act, EACC may tender an undertaking in writing not to institute criminal proceedings against a person who has given a full and true disclosure of all material facts relating to past corrupt conduct and economic crime by himself or others; and has voluntarily paid, deposited or refunded all property he acquired through corruption or economic crime; and has paid for all losses occasioned by his corruption conduct to pubic property. Such a settlement or undertaking is to be registered in court.
The court may order the convicted person or private entity, or in appropriate cases, a public body, to pay back the amount or value of any advantage received by him to the Government. If the convicted person is a State officer or a public officer, such person shall be barred from holding public office. If a director of a company is convicted of bribery, such director shall be disqualified from holding the position of director in that or any other company in Kenya for a period of not more than ten (10) years. If the convicted person is a partner in a firm, such person shall be disqualified from serving as a partner in that or any other firm in Kenya, for a period of not more than ten (10) years. A person who is convicted of an offence involving bribery shall be disqualified from being elected or appointed to hold a state office or a public office for a period of not more than ten (10) years after conviction. A person other than a natural person convicted of bribery, shall be disqualified from transacting business with the national or county government for period of ten (10) years after such conviction.
Civil consequences of FCPA violations include the imposition of a fine of up to $20,521 per violation of the anti-bribery provisions, 15 USC section 78ff; 83 Federal Register 1396 [11 Jan 2018], an injunction prohibiting any act that violates or may violate the FCPA, requiring corporate entities to improve compliance programs and retain an independent consultant to advise on such programs, and disgorgement of ill-gotten gains plus pre-judgment interest. For actions involving an individual, the SEC could also impose additional restrictions, including barring that individual from serving as an officer or director of an issuer for a specified period of time.
Corporate violators of the FCPA may also face collateral consequences from civil enforcement actions, including ‘suspension or debarment from contracting with the federal government, cross-debarment by multilateral development banks, and the suspension or revocation of certain export privileges’. DOJ and SEC, A Resource Guide to the U.S. Foreign Corrupt Practices Act at 69-70 [2012, updated 2015].
Under Mexican Law, consequences of bribery are mainly administrative and criminal, though, the administrative consequences include the payment of civil damages and losses. In essence, the LGRA provides that bribery, as a serious administrative offence, shall be sanctioned as follows:
In case of individuals, other than public officials: (i) a fine consisting in up to two times the benefits obtained or, if not obtained, the equivalent of 100 to 150,000 Measurement and Updating Units (“UMA’s”) (currently around USD $427.00 up to USD $639,683.00); (ii) disbarment/ banning to participate in public acquisitions, leases, services or works, as appropriate, for a period not less than three months and not exceeding eight years; and (iii) payment of damages and losses caused to the Federal, local or municipal Public Treasury, or to the estate of the public entities.
In case of legal persons, including business organizations: (i) a fine consisting in up to two times the benefits obtained or, if not obtained, the equivalent of 1000 to 1’500,000 UMA’s (currently around USD $4,265.00 up to USD $6’396,825.00); (ii) disbarment/ banning to participate in public acquisitions, leases, services or works, as appropriate, for a period not less than three months and not exceeding ten years; (iii) suspension of activities for a period not less than three months and not exceeding three years; (iv) be subject to early dissolution; and (v) payment of the damages and losses caused to the Federal, local or municipal Public Treasury, or to the estate of the public entities.
In case of public officials: (i) suspension of employment, position or commission;(ii) dismissal of employment, position or commission; (iii) economic penalty to be determined by the competent authority; and (iv) temporary disbarment for employment, positions or commissions in the public service and for participating in public acquisitions, leases, services or works.
Administrative sanctions and fines determined by judicial proceedings must be considered as independent and separate fines.
The administrative sanctions establish fines of 0.1% to 20% of the offending entity’s gross revenues in the fiscal year prior to the initiation of the enforcement proceedings (but never less than the advantage obtained).
The judicial sanctions may be applied cumulatively with those established as administrative sanctions and consist of: forfeiture of assets, rights or other values obtained as a result of the wrongdoing; partial suspension or interdictions of corporate activities; compulsory dissolution of the legal entity and debarment, which includes the prohibition from receiving incentives, subsidies, grants, donations or loans from public financial institutions for at least one year to a maximum of five years.
There is no recognised civil cause of action of corruption or bribery itself, although there may be civil consequences that result from a corrupt payment. For example:
- A contract that has been procured as a result of a corrupt payment is likely to be voidable.
- There may be available claims by an employer against a corrupt employee. Such claims could seek damages or orders enabling the tracing of the proceeds of the employee’s wrongdoing as a means of recovering the employer’s money that was used to pay a bribe.
- There may be available claims for damages based on deceit or misrepresentation.
The primary action against a corrupt individual, however, will be under the criminal statutes. Sentences handed down for such offences can involve reparation payments ordered against the offender and payable to any identified victims. Such reparation may be available if the offender’s conduct has created proceeds of crime, which can be liquidated and available to identified victims.
Case law on the civil consequences of bribery is very limited. However, it is generally accepted that, depending on the circumstances, bribery may have several civil consequences in Denmark, e.g. liability for damages resulting from bribery. Furthermore, any agreement concluded in connection with / because of bribery may be declared null and void by the courts (ordre public). Furthermore, bribery may result in exclusion from public procurement tenders.
With respect to the civil consequences of bribery, there are several points that should be addressed, as follows: (i) the money, valuables or any other benefits representing the bribe; (ii) the prejudice caused by perpetrating the crime.
The Criminal Code stipulates explicitly that the money, valuables or any other benefits received, given or offered as a bribe shall be subject to seizure, and when such can no longer be located, the forfeiture of the equivalent shall be ordered. The same legal regime applies to the money, valuables or any other assets received, given or supplied with respect to influence peddling or influence buying.
In the matter of the prejudice caused by bribery, the general stipulations of the law are applicable, which state that any person that suffered a prejudice as a result of an illicit act has the right to obtain reparation. Thus, the person found guilty of committing a corruption related crime shall repair the prejudice caused by its actions, in accordance to the general provisions of Tort law.
Under Section 14 of the PCA, where a bribe has been given by any person to an agent, the agent’s principal may recover the value of the bribe as a civil debt. This would allow, for example, a company to seek damages from a former director or employee who received corrupt payments on account of their dealings on behalf of the company. Any such civil liability would be in addition to any penalty or fine imposed as part of a criminal sentence.
In addition to the civil recovery proceedings under the PCA, other types of civil action are available. For example, in certain circumstances, it is possible for a company to bring a civil action for conspiracy against its employee(s) who received bribes and/or the person who gave bribes.
In principle, anyone who is injured in their economic interests by bribery can sue the perpetrators for damages in accordance with the laws on tort (and possibly contract) as well as for the surrender of unlawfully earned profits. This entitles in particular a company whose employee was bribed to claim the amounts paid as a bribe.
The SFO has civil recovery powers to recover property obtained through unlawful conduct without resorting to criminal prosecution.
Victims of bribery may also make civil claims for damages against the briber and/or the recipient of the bribe for financial loss.
There are no civil or administrative enforcement bodies specifically responsible for investigating or prosecuting bribery or corruption. However, bribery in the private sphere could result in civil liability through claims such as unjust enrichment or breach of fiduciary duty. The most significant penalty in the civil context is that of civil damages, which may be made up of both general and punitive damages.
Anyone who offers or accepts a bribe may be held civilly responsible for damages caused by the illicit conduct.
Profits resulting from criminal activity will probably be confiscated by the State.
Moreover, according to Law No. 5/2002, of 11 January (Article 7) there is a legal presumption that subverts the in dubio pro reo principle in such a way that a suspect has the burden to proof to regularize any revenue other than that which is consistent with that person’s lawful earnings.
Failing to prove lawfulness of earnings results in such earnings being considered a product of crime and consequently being confiscated in favor of the State.
Broadly speaking, the Argentine Civil and Commercial Code (ACCC) establishes a duty to avoid causing an unjustified harm (ACCC art. 1710). The breach of this duty creates an obligation to compensate the generated torts (ACCC art. 1716). Besides, the Antitrust Law No. 27442 establishes a tort action against those who violate the free competition regime. Although there is no case law, it could be argued that in the context of a bidding process, a bribe paid in order to win a contract rises a right to compensation for the excluded competitors of such procedure.
On the other hand, if anti-bribery clauses were in place in a contract, a plaintiff (an investor, business partner, competitor in a procurement process, etc.) may take the non-compliant party to trial for damages.
Also, Decree No.1023/2011 establishes in its article 10 that public contracts tainted with corruption will be terminated.
Additionally, the Argentine Government has recently issued the Emergency Decree 62/2019 which sets a Procedural Regime for Civil Action that will apply to non-conviction based asset forfeiture. The Decree establishes a civil action in favour of the Federal Government which will apply to the goods or titles that are allegedly the result of certain crimes, including bribery. This civil proceeding is autonomous from any conviction issued by a criminal court. The final judgment will be res judicata regarding the goods or rights involved, regardless of the outcome of any other judicial action. However, the final judgment of dismissal or acquittal issued at the criminal court, based on the inexistence of the fact under investigation or in which said fact does not fit into a legal figure, will oblige the Federal Government to restore the property or right (or, when that’s impossible, an equivalent value in money) to its previous owner.
In Angola, the civil consequences of corruption are those that arise from the civil responsibility, i.e., the reparation of the damages (devolution of what has been illegally received without prejudice of the payment of a compensation).