Present danger

Next year the government will bring in a new law, the Prevention of Corruption Act, 2004. This, together with the Money Laundering Act and Proceeds of Crime Act, which became law last year, will force firms to tighten up their ethical principles. And if you are found guilty of corruption, the penalty is prison. Recent construction cases have seen sentences ranging between four months and three years. As CM went to press, five men were being tried in Winchester Crown Court for conspiring to defraud Talbot Village Trust by overcharging for professional fees and construction work. The case is due to finish this month.

Criminal defence lawyer Martin Cunningham is currently dealing with two cases from construction, one of which has been under investigation for three years and has yet to go to court. Here, in question and answer form, Cunningham examines some common corruption conundrums and outlines how to avoid the need to use his services in the future:

Last Christmas I sent one of my contacts one of our firm's desk diaries. They are nice diaries – leather, gold edged - but I was rather shocked to receive a letter from him, together with the diary, saying that he was unable to accept such gifts. I feel he is accusing me of bribery.

It may be that your contact has set out his ethical norms and rules clearly and makes a policy of not accepting gifts. They may see acceptance as the seed of compromise and corruption.

You have not committed any offence but maybe you should look at your ethical standpoint. Note that 'bribery' is a common law offence and applies to the receipt or offering of any 'undue award' and applies to people in public office. When the person on the receiving end of a backhander is in the private sector, the legal term is 'corruption'.

I am the project manager on a large long-running job and every year I receive a case of Bushmills whiskey at Christmas from a supplier. I consider it to be a gesture of goodwill. My staff certainly appreciate it.

As long as the gift is transparent then everything is OK. By this I mean that you have advised your employer of receipt and they have approved it. ure 'favours'. If it comes, report it immediately.

I have worked in the industry for many years and made some good friends. At the moment I am building a new extension and one of the bricklaying contractors I regularly work with is helping me out. He is also working on the housing job I am currently overseeing.

This is not per se corrupt as long as you are not providing him with additional work or favouring him on present or future contracts which might detrimentally affect your employer's business.

You are paying him, aren't you? Where do the materials come from? Not from your housing job, I hope? You might just be leaving yourself exposed to allegations, don't you think?

I have put a bid in for a council project. The chief QS approached me and explained that he thought I was the best contractor for the job, but that since my bid was considerably lower than the highest price, perhaps I should revisit my costs so that I wasn't doing myself down. Without saying it in so many words, he also made it clear that he would require a proportion of the extra cost for himself.

This is corruption with a capital C!!

Prison sentences are usual, with the maximum penalty seven years

Martin Cunningham

The Prevention of Corruption Act 1906 says that if you give, agree to give, or offer to give gifts or cash in order to get business favours, then you are guilty. It applies to agents too.

This is a very important part of the law which affects the construction industry every day of the week. Prison sentences are usual, with the maximum penalty seven years.

In November 2000 David Thomas Hutchinson and David Albert Alexander Thomas, who were working for cable-laying subcontractors, were found guilty of paying money to Michael Anthony Simmons and Barry John Falconer, who both worked for Bell Cablemedia, in order to win work. Hutchinson and Thomas got four months and 12 months respectively; Simmons got three years, Falconer got six months.

In June 1999 Brian Burrett, former director of builders Construct Reason received nine months – as did Gordon Skingley, the former head of corporate loans at banking and investment firm Hill Samuel – when he paid Shipley in return for favourable loan facilities.

As project manager I organise team-building evenings with the managers on site. I pay for us all to go out for a meal, drinks, followed by entertainment at a local club. I invite the professional team along to this: the client's representative, etc.

This is not corrupt but again, be transparent. You do leave yourself open to approaches from the client's professional team and if an inducement or reward is offered you will find yourself in the murky waters of corruption. If your principal finds out third hand about such an offer you might find yourself without a job.

You might think it better to team build alone with your own staff. I would!

I am one of half a dozen contractors which work with the local council. We use many of the same suppliers and subcontractors so it makes sense for us to share information when we bid for jobs. It tends to turn out that we receive an equal share of work, which keeps all our workers in employment and gets the work done on time.

This is not corrupt as long as none of you are an agent of the local council. An agent for the purposes of the 1906 act is defined as including 'any person employed by or acting for another and a person serving under the Crown or any local or public Authority'.

If one or more of you were an agent of the local council then the fixing of bids could be said to be corrupt and at the least would leave you open to arrest, investigation and interview by the police.

I am a project manager and have just finished a successful office job. One of the board directors of the fit-out specialist, who I got to know well over the course of the project, has offered me two weeks at his villa in Spain next May.