What are the civil consequences of bribery in your jurisdiction?
Bribery & Corruption
In Australia, bribery is a criminal offence both at federal, state and territory levels.
There have been non-criminal cases against directors who have been found to have breached their director's duties in failing to identify and prevent bribery within their organisations. There have also been civil class-actions by shareholders against listed companies who have been investigated for corruption.
It is possible for companies or individuals who have been negatively impacted by another's bribery (e.g. a losing bidder) to bring a civil claim in relation to losses suffered.
If bribery has caused damage, there is a possibility to claim damages in separate civil proceedings or in the criminal proceedings concerning bribery. In the criminal proceedings the court may impose on the accused the obligation to redress the full damage inflicted by the act of bribery or to pay compensation of up to PLN 200,000 instead.
The issuance of a non-appealable guilty judgment in criminal proceedings is binding on a court in civil proceedings with respect to the accused, which facilitates seeking further compensation.
An employer may have a civil cause of action to recover damages from an employee who has committed an act of bribery that has caused loss to the business. A person who obtains a benefit by reason of a fiduciary relationship (which can include employer–employee and principal–agent relationships) may also be required to account on trust for the unauthorised profit made by him.
The European Union (Award of Public Authority Contracts) Regulations 2016 prohibit a natural or legal person from participating in the procurement procedure for public contracts where that person has been convicted of certain offences, including a corruption offence. The Office of Public Procurement has also issued guidance on the ethical requirements on those involved in the public procurement process.
Where a breach of Irish bribery law is committed by a company in connection with a project funded by the World Bank and other international financial institutions, such companies may be debarred from bidding on contracts funded by the World Bank, International Monetary Fund and other international financial institutions, and publicly named.
The administrative and judicial proceedings, detailed in Question 2 above, are independent from one another and may lead to different penalties being applicable to the legal entities investigated.
While the administrative proceeding may result in the application of a pecuniary penalty that may range from 0.1% to 20% of the turnover of the legal entity in the year immediately preceding the commencement of the administrative proceeding and the mandatory and extraordinary publication in the press of the condemnation decision, the judicial proceeding may result in the application of the following penalties: loss of assets, rights and values that may represent an advantage or profit, directly or indirectly, of the violation; suspension or partial interdiction of its activities; compulsory dissolution; and prohibition to receive incentives, subsidies, subventions, donations or loans from public bodies, agencies and/or financial institutions, for a period of one to five years.
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.
The aggrieved party may sue the offenders for any losses sustained. This is the only civil consequence of bribery in this jurisdiction. An example of this would be if “A” was awarded a contract from “B” but “B” was later bribed by “C” to give the contract to him and cancel any arrangement with “A.” In such cases, “A” could sue both “B” and “C” and the respective organisations they may represent for damages.
What is beneficial here is that there is no prescription for a claim against bribery.
Article 239 bis 2 of the code states as follows:
“A criminal lawsuit shall not be terminated by lapse of time limitation in any of the crimes set forth in this Chapter, and the punishment imposed shall not be extinguished. Moreover, civil actions either arising or related thereto shall not be terminated by the lapse of time limitation.”
“A” could also file charges and request fines, however these fall under criminal sanctions.
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 to bring a civil action for damages against a bribe payer or other third party (such as the employer of the bribe payer) for fraudulent misrepresentation or deceit.
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 party damaged from 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 Industry and Commerce (“AIC”), 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.
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; (ii) 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.
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.
As such bribery is considered to a criminal offence in India, however, the courts and other authorities have been granted discretion to impose fine instead of imprisonment once the offence is proved to have been committed. Such a fine is usually imposed in lieu of imprisonment. The amount of fine to be levied varies under different Acts. The Prohibition of Benami Property Transactions Act and Prevention of Money Laundering Act also provide for attachment of property of the accused in addition to fines.
The Angolan legal system, having a civil law structure, does not include the concept of collateral civil consequences of criminal conviction as it is understood in common law systems.
The Angolan Penal Code provides for certain civil consequences for crimes, including, but not limited to, suspension of political rights, dismissal from public positions, being ineligible to public positions, being no longer legal guardian, etc. (art. 76).
Until 2014 bribery acts were sanctioned under the terms of the Angolan Penal Code but these provisions have been tacitly revoked by the entering into force of the LCMLO which establishes a new legal framework for the crime of corruption. We say tacitly because the new legislation does not include an express repealing norm. However, considering the overlapping scope of both norms, it seems that, from February 10th 2014 onwards — date of the entering into force of the LCMLO — the applicable legal instrument establishing and punishing corruption crimes will indeed be the LCMLO. Under the terms of the Angolan Penal Code, a public official could be, under certain circumstances, condemned to dismissal from the public office but this consequence does no longer arise from LCMLO.
If the act performed as a result of a bribe is a violation of one’s duties, the perpetrator of that act may be held civilly responsible for any damages caused by that act in the general terms of the law.
The State may be held jointly and severally liable for damages caused to individuals by the bribed party’s actions.
Pursuant to Article 110 of the Penal Code, any proceeds resulting from bribery may be declared forfeit in favour of the State. Article 7 of Law 5/2002 establishes an enhanced forfeiture principle, which presumes that the difference between a person’s actual estate and an estate consistent with that person’s lawful earnings to be proceeds of a crime and thus may be forfeited in favour of the State.
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.
Under civil law (sections 134, 138 (1) Civil Law Code), where contracts are proven to be connected with a bribe, are null and void, payment of damages or the 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 termination without notice. However, the corporate entity bribing someone may also be able to hold the perpetrator or the 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.
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 liable for any damage caused by their misconduct to third parties.
The Criminal Procedure Code, approved by Decree-Law no. 48/96/M, as amended by Dispatch of the Chief of Executive no. 354/2013, November 5th 2013, provides, in its Article 477, that court decisions may include civil consequences including, but not limited to, suspension of political rights, dismissal from public positions, being ineligible to public positions, inhibition of voting rights, being no longer legal guardian, among others.
Article 478 further provides that the judge may order any other measures needed for the execution of the sentence.
HRA: Civil consequences are not prescribed for bribery in Mozambican jurisdiction. However, if the act performed as a result of a bribe is a violation of one’s duties, the perpetrator of that act may be held civilly responsible for any damages caused by that act in the general terms of the law.
There are no general rules which describe civil consequences of bribery. If a government official accepts a bribe in violation of the Ethics Law or the Ethics Code, the official may be subject to a disciplinary action. If a corporate officer gave a government official a bribe and caused damage to the corporate, the corporate officer is liable for the damage suffered by the corporation.
As opposed to criminal proceedings, the main purpose of civil proceedings is to obtain compensation for damages from a civil court.
The 3rd article of the Civil Law Convention on Bribery (ratified by France) provides that ‘each party shall ensure that entities or persons who have suffered damages as a result of any act of bribery have the right to initiate legal proceedings to obtain full compensation for such damages. Such compensation may cover material damage, loss of profits and non-pecuniary loss.’
Article 1 of Act No. 2013-1117 of 6 December 2013 allows any approved association to exercise the rights recognized to the civil parties, especially regarding national public bribery, public bribery and bribery.
For Its part, the AFA can apply pecuniary sanctions for non-compliance with its recommendations. The amounts are ≤ €200,000 for natural persons and ≤ €1 million for legal persons. The AFA may also order the publication of its decision.
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 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.
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].