Private investigations

Criminality and malpractice within the construction industry is rife. All have the potential to damage a company’s reputation, whether it concerns collusive tendering, bribery, violation of environmental ethics, ghost employees, disguising inflated professional fees in a contract, or posting video footage of bullying and dangerous behaviour posted on the internet.

With the industry coming under increasing scrutiny, and individuals as well as companies being prosecuted, doing nothing when faced with evidence of malpractice is not an option. When faced by an incident, a company must be seen to be acting promptly, ethically, fairly and within the law.

Planning an investigation is crucial to success. This will help in establishing the scope of the inquiry, who needs to know, as well as determining what immediate action is required – the police or statutory bodies may have to be called in or notified and consideration given to the likely impact on the workforce, customers, shareholders and even the industry as a whole.

At the outset, investigators should conduct an analysis and write an action plan detailing allegations and outlining the policies, procedures or laws that may have been transgressed. That plan should also provide a timeline, outline necessary resources (such as team members and resources), evidential sources (for example, documents and computer data), possible witnesses and the order in which they will be interviewed.

Human resources professionals are likely be called on in the early stages, perhaps in conjunction with in-house or retained lawyers, but their time may be limited because of their normal workplace activities. While both are experienced in handling disciplinary processes and corporate affairs, in some instances it is simply not possible for an internal investigation to be conducted without the help of specialist support. Many serious cases now involve organised gangs, complex frauds and counterfeit documents that can only be adequately investigated by professional investigators, forensic auditors, computer specialists and other experts.

The selection of a suitable external investigative team can be accomplished through the advice and guidance of the company’s solicitors. However, any team will still need to work in close conjunction with internal professionals, in order to provide all the evidence necessary to ensure that a case is brought to a satisfactory conclusion. Investigators need to remember that internal resources, such as HR, will provide industry-specific knowledge, an insight into the company and be sensitive to its dynamics, its workforce and their working practices.

Covert activities may be considered as a means of obtaining evidence, such as test purchases, pretext enquiries, email
monitoring and covert surveillance

Of key importance is obtaining, preserving and securing evidence. The relevant procedures, policy documents, internal and external communications and background information must be considered, and relevant material collated and analysed. CCTV data should be obtained, stored securely and handled in accordance with the information commissioner’s code of practice; copies of recordings will only be admissible as evidence providing there is a clear audit trail.

Credit referencing and database searches through Equifax, Experian, Companies House, Land Registry and the Electoral Role to name a few, are an invaluable source of information.

Various covert activities may be considered as a means of obtaining evidence – test purchases, pretext enquiries, email monitoring and covert surveillance. However, legal constraints govern the admissibility of this type of evidence and investigators need to be mindful of the Police and Criminal Evidence Act 1984, Regulation of Investigatory Powers Act 2000 and employment law.

Written statements are fundamental to any investigation and must be taken from witnesses and suspects; however they should not be taken purely on face value and need to be examined carefully to ensure facts are correct and can be corroborated. Discrepancies need to be highlighted and discussed during interviews with witnesses or the accused. Care must also be taken to ensure the admissibility of evidence. For example in civil matters hearsay evidence is acceptable, whereas in criminal matters it is generally off-limits.

There will be those reading this article thinking “What about my margins?” and rightly so. However, when compared with the potentially ruinous impact on the business of failing to conduct a proper investigation, the cost of external support ought to be easily justified to the board.