Civil Remedies for Corruption in Government Contracting: Zero Tolerance Versus Proportional Liability

53 Pages Posted: 22 Apr 2009 Last revised: 8 Jun 2009

Kevin E. Davis

New York University School of Law

Date Written: April 22, 2009

Abstract

Bribery in public contracting is a serious problem, particularly in societies with weak public institutions. The trend in the law applicable to contracts between governments and foreign firms is to refuse to enforce contracts procured through bribery. This zero-tolerance approach may have perverse consequences. Proof that a firm obtained a contract through bribery does not necessarily indicate the extent to which the firm has fallen short of its obligations to combat bribery. The zero-tolerance approach fails to take into account the extent to which the firm has not only attempted to prevent bribery but also monitored and punished employees who engage in bribery, cooperated with law enforcement authorities, and created value for the government in the course of performing its side of the contract. Subjecting bribe-payers to liability that is more proportional to fault seems preferable on a number of grounds.

Suggested Citation

Davis, Kevin E., Civil Remedies for Corruption in Government Contracting: Zero Tolerance Versus Proportional Liability (April 22, 2009). NYU School of Law, Public Law Research Paper No. 09-22; NYU Law and Economics Research Paper No. 09-16; IILJ Working Paper No. 2009/4. Available at SSRN: https://ssrn.com/abstract=1393326 or http://dx.doi.org/10.2139/ssrn.1393326

Kevin E. Davis (Contact Author)

New York University School of Law ( email )

40 Washington Square South
Vanderbilt Hall, Room 335
New York, NY 10012-1099
United States
212-992-8843 (Phone)

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