Two solicitors have published a document listing 47 common practices in the industry, all of which are also criminal offences. It’s a real eye opener …
Have you recently concocted a claim that is a tad ambitious? I mean is the claim tactical, a ploy … just damn well false? Have you applied for an iffy extension of time? Have you refused an extension of time despite its being justified? Have you agreed to supply materials to meet a contractual standard but sent a lesser standard for the same price? Have you compiled an invoice for more work than actually done? Have you cobbled together exaggerated day-work sheets? Have you inflated a claim for variations? Have you concealed defects? Have you refused to issue a final certificate? And when it came to dispute resolution, have you concealed documents from the adjudicator, told fibs, put in a false document or a deliberate false expert report? As a lawyer or arbitrator or adjudicator have you charged for more work than spent on the case? Are you sitting comfortably?
Neil and Catherine Stansbury are solicitors who have taken a special interest in dishonest footwork in the construction and engineering industry. They have published the Anti-Corruption Code for Individuals in the Construction Industry. It is an eye opener. The code explains how concealment of defects, wrongful levying of liquidated damages, wrongful withholding of payment, fabrication of claims or falsification of evidence can easily amount to corruption, and corruption is a criminal offence. If you are convicted of it, you can go to jail.
The code is brilliant in that it focuses on construction crime by examples: 47 of them. Let’s take a look at some. Here is a good start; is it familiar? A has a favoured subcontractor but wishes to ensure that it pays the market price. So A goes out to other subcontractors for quotations with no intention of doing anything apart from asking the favoured subby to match the other prices. This is a crime: obtaining services by deception.
Next example: a variation arises. A is asked to estimate the price and time impact. It exaggerates both. The architect reduces both to the correct level. Crime: if A was dishonest, it is guilty of false accounting, attempt to obtain property by deception, attempt to obtain a money transfer by deception. Say, however, the architect takes a “favour” from A to accept the price and time quotation, goes ahead and is paid. Crime: bribery, false accounting, obtaining property and money transfer by deception and conspiracy to defraud … the contractor, architect and individuals are open to prosecution. Did you notice how an offence is created even when no loss is suffered? That’s because the act of trying to have one over on the other bloke is enough to create the crime. The intention was to commit an offence. It is irrelevant that you were rumbled.
What do you reckon about this one? The client delays the works and the contractor applies for extension of time and prolongation costs. The client and contract administrator or architect agree that nothing will be awarded, knowing full well it was deserved, then levy liquidated damages. But an adjudicator awards the contractor the right time and money. Crime: if the employer’s folk were riddled with dishonesty it is conspiracy; a variety of attempts to and false accounting. If on the other hand this type of claim for time and money was a dishonest attempt by the contractor, that is just as naughty.
The anti-corruption code is brilliant in that it focuses on construction crime by examples: 47 of them
Tricky, too, is giving evidence in an adjudication. Even though no oaths are taken, you can still incriminate yourself with false accounting, deception and conspiracy. Doing all that in court will add perjury and contempt. Perjury also applies in arbitration.
Try to avoid making a debt by dishonesty, or bribing, intimidating or blackmailing. Try not to deceive or beat up the competition. Try not to aid, abet, counsel or procure dishonesty. Try not to turn a blind eye. If you do, one day you may meet a jury that decided that you knew that the ordinary man would regard your footwork, your sharp practice, as dishonest – and your career is over. But a dispute whereby you hold genuine views that are properly researched but turn out to be wrong is fair play. The dispute is respectable, so long as it is just that.
Tony Bingham is a barrister and arbitrator specialising in construction