HSE University Anti-Corruption Portal
A Report on Repairing Damages to Victims of Corruption Released
Vladislava Ozhereleva

The Stolen Asset Recovery Initiative (StAR) has issued an analytical publication entitled Victims of Corruption: Back for Payback.

The paper highlights that the provisions on asset recovery, in particular, on the compensation of damages to the victims of corruption which have been implemented in a way of another in the domestic legislation of different countries are contained in such international documents as:

Asset recovery and subsequent reparation of damage to the victims of corruption can be provided for in different legal acts and implemented through various mechanisms depending on the jurisdiction, including:

1) Criminal proceedings:

  • A court may order the defendant to pay restitution to the victim of corruption as part of their sentence for the violation of domestic law (this is the practice used in Botswana, Ghana, Sri Lanka and Nigeria);
  • The restitution may be part of court settlements of violations of extraterritorial legislation including anti-corruption laws. This approach is adopted by the United States, Australia, Brazil, Canada, France, Hong Kong, China, Spain and the United Kingdom;
  • The restitution may be envisaged in the terms of a deferred prosecution agreement or other non-trial resolution, concluded by the defendant and law enforcement; the latter represents the interests of victims of corruption while the victims are not engaged in the non-trial resolution, which may result in their insufficient representation and compensation. This, in particular, was the case of the non-trial resolution with the accused under the operation Car Wash (Lava Jato), which led to the systematic failures in respecting the interests of the victims of crimes;

2) Civil proceedings: in this case a natural or legal person can individually demand from another natural or legal person, including those involved in a corruption offence only indirectly, to repair damage through civil action;

3) Class actions and representative actions: these mechanisms are used to repair a collective damage within a single action, where there are too many claimants to file separate lawsuits. For example, such action against an act of corruption committed by the public utility company Commonwealth Edison arose in Illinois, the United States: the company was accused of bribery of officials that led to class members paying higher prices than they should have, with the overcharge exceeding US$150 million. In case of class actions in different jurisdictions, there can either be single restitution for all members or a certain amount of restitution under individual proceedings;

4) Constitutional protection mechanisms: many countries such as Argentina, Brazil and Costa Rica foresee mechanisms that will allow for immediate remedy in cases in which constitutional rights are violated also by corruption offences;

5) International and regional human rights mechanisms: in spite of the fact that the application of these mechanisms can be considerably limited in corruption cases, the reports and decisions of regional human rights courts, commissions and UN bodies can contain references to corruption crimes and the rights of persons who have suffered damage inflicted by such crimes especially if the standards that are applicable in several countries in the same region also with regard to restitution are established. For example, the Independent International Fact-Finding Mission on the Bolivarian Republic of Venezuela established by the United Nations Human Rights Council in 2019 incorporated references to corruption, including corruption in the justice system, in its reports;

6) Payment of compensation from reparation funds financed by the sanctions for offences, including corruption ones: these funds allow for full compensation of damage to the victims of corruption even if it is impossible to confiscate it from the accused; such a fund, for instance, has been created in Colombia.

However, depending on the jurisdiction, the law can limit the range of persons entitled to resort to the abovementioned mechanisms. In Italy and Switzerland for example, it is impossible to recognise a natural or legal person as a victim of corruption, meaning that the lawsuit can be filed only by the state, authorities or other public subjects; other jurisdictions grant this right to the state, public or municipal authorities, state-owned enterprises, certain interested persons, in particular, public procurement bidders that have lost a tender because of bribery by their competitors, non-governmental organisations and other natural or legal persons.

To get compensation, the claimant should normally provide the following evidence:

  • Existence of damages and the cause-effect relation between the damage and the actions of the defendant;
  • Existence of relation between the actions of the defendant and the damage suffered.

Where possible, the abovementioned person should also provide the assessment of the damage inflicted to him/her.

Damages can be:

  • Direct or indirect (unlike the direct damage, the indirect one is recognised only in certain jurisdictions such as Uganda);
  • Material and immaterial (immaterial damage, like indirect one, is recognised only by some jurisdictions, including France, the United States, Colombia and South Africa).

An example of indirect immaterial damage that almost everywhere will not constitute the grounds for a person being recognised as a victim of corruption is the following case from Uganda. A woman experiencing problems in labour entitled to free care under Ugandan law was requested to pay the illegal remuneration of 50,000 Ugandan shillings (about US$ 15) by the personnel in exchange for the medical assistance; having no possibility to give them the money, she was turned away and died with the baby thereafter.

The jurisdictions that recognise immaterial damages adopt different approaches to their assessment: in the United States for instance, where an employee agrees to accept a bribe, the immaterial damage can be a breach of duty and a betrayal of trust of the employer, whereas the reparations can imply the payment of a certain percentage of the wage of the employee. South Africa obliges the victims of corruption to provide preliminary assessment of the immaterial damage, where plaintiffs are expected “to place the best available evidence before the court on the issue of quantification, so the court will do the best it can to quantify the loss”.

In order to improve the reparation mechanisms the StAR experts suggest that countries consider the following recommendations:

  • Enable the participation of victims in criminal proceedings, in particular, by:
  1. Enacting the necessary legislation;
  2. Providing for the mechanisms for informing potential victims of corruption of prosecution and criminal proceedings and about their right to intervene as a civil parties to them;
  3. Entitling victims of corruption to present evidence at trial and request the prosecution to gather such evidence, and to pursue separate and independent lines of inquiry;
  4. Enabling an independent review (including by victims) of a decision not to prosecute a corruption crime;
  5. Considering ways of limiting the litigation costs for victims, such as by foreseeing mechanisms for donor funding and prohibiting excessive charges for public interest litigation;
  • Enable victims of corruption to participate in pre-trial resolutions, and their representation in the decision-making process concerning the allocation of compensation of reparations, as well as in the oversight of the disbursement of the funds. Policymakers should develop guidelines to ensure that the interests of victims are represented in the course of these processes;
  • Consider the possibility to provide the right to recover damages:
  1. To collective victims;
  2. In case of indirect damages;
  3. In case of immaterial damages;
  4. To any natural and legal persons, as well as beneficiaries of organisations that have suffered damage inflicted by corruption offences in public procurement;
  • Analyse the expediency of establishment of dedicated funds financed by the proceeds confiscated from the convicted to fully compensate victims of corruption in the event that they cannot be compensated otherwise;
  • Take measures to provide better access to data, continue investigations in the area of reparation of damages to victims of corruption and active engagement of civil society organisations, academia and victims of corruption in the debate on relevant issue. It is recommended, in particular, that:
  1. Authorities publicly report on instances of reparation for corruption;
  2. Researchers, scholars and practitioners closely follow and study the jurisprudence and conduct surveys of practitioners and victims to continuously identify ways of addressing the numerous challenges;
  3. Non-governmental organisations actively intervene as parties to criminal and civil proceedings in cases affecting collective or diffuse rights and interests.
Asset recovery

We use cookies in order to improve the quality and usability of the HSE website. More information about the use of cookies is available here, and the regulations on processing personal data can be found here. By continuing to use the site, you hereby confirm that you have been informed of the use of cookies by the HSE website and agree with our rules for processing personal data. You may disable cookies in your browser settings.