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No more boobs
As the Chinese say, a man who makes a mistake and
does not correct it makes another mistake. This should be born
in mind by the DTI in its present review of the Construction Act
“An awful lot of wasted money, adjudicator
and court time has been spent fathoming quarrels about
contracts”
Well, well. A pat on the back for the DTI.
The proposals for changes to “Construction Act adjudication and
payment rules” are ever so well done. Mind you, it is a surprise
that the changes will require the full apparatus of parliament –
the intention being to change the primary act, instead of
indulging in a little ministerial tinkering. That’s a serious
point, not a minor whinge. If the act is to be changed and
parliamentary time is to be made for it, there are important
other matters that we ask for. Hitherto, most of us have not
been giving thought to primary act changes. Let me come back to
the implications.
But first this legal page has been, quietly
and politely, shouting its bloomin’ head off about the
“contracts in writing” rule. And lo, the first change is that
all those rules are to go, vamoose. It will no longer be the
case that “adjudication and the payment rules” only apply to
“contracts in writing”.
Hooray. An awful lot of wasted money, wasted
adjudicator and court time, has been spent fathoming quarrels
about contracts. Once the act is changed it will apply to not
only contracts in writing, but also that that are entirely oral,
partly oral, and partly written, and those varied by oral
agreement.
Wait, wait: the DTI in these latest proposals
said it would apply to “contracts” of all hue. Please, please
also include as “in scope” all “agreements” irrespective of
whether they are “contracts”. Take a look at Bennett vs
Inviron [January 2007]. It was an “agreement in
writing” but not a “contract in writing”. It was, said the
judge, an “equitable agreement” in writing. So, come on DTI,
look at that. Go to the lengths of dealing with any old
“agreement” to do building construction works. A “construction
contract” shall mean any “agreement”, whether a contract or not.
Mind you, this change will not quite make the
garden rosy. There will be a few quarrels about oral agreements.
Do rehearse all that before you begin adjudication. If you are
at odds about the existence of oral terms, that is another
quarrel for a separate adjudication. And all you non-lawyer
adjudicators mug up on law of contract and equitable agreements.
And while parliament is spending a few
minutes deleting the “contracts in writing” disaster would they
add a few words in the primary act about the right to refer a
dispute “arising under the contract”? Add “or in connection with
the agreement/contract”? Why? Because on several occasions
quarrels crop up regarding collateral agreements.
And, while parliament is spending a few
minutes doing that, would it take a look at something that we
have long allowed to engineers, architects and surveyors in the
role of arbitrators? Please look at the Arbitration Act 1996
section 30 and let the adjudicator rule on their own
jurisdiction. Responding parties taking jurisdiction points,
with an eye to tactics after the adjudication, spend lunatic
amounts of money. It will stop if adjudicators are empowered to
decide jurisdiction.
And while parliament is spending those few
minutes would it take a look at another “something”. Bring a
rule into the primary act that anyone who proceeds with
adjudication without raising timely objections to “the right to
adjudicate” loses the right to
object. The same goes for anyone failing to object that the
adjudication process is being improperly conducted.
There is more. Adopt section 56 of the
Arbitration Act. It says, “the arbitrator may refuse to deliver
their award to the parties except on full payment of the fees
and expenses”. Why? Because there is a whole heap of losers in
adjudication who enjoy not paying the adjudicator’s fees? So
public money is spent suing. Easy, isn’t it?
And there is more. We boobed in 1996. The act
forgot to deal with enforcement. Here is the crucial cost-saving
line: “An award made by the adjudicator pursuant to an
adjudication agreement may, by leave of the court, be enforced
in the same manner as a judgment, or order of the court, to the
same effect.”
That wording was on a bit of paper that
slipped behind a radiator in the Palace of Westminster. But we
found it! Come on parliament, save public money. Make the award
an enforceable instrument. Don’t boob again.
Readers are invited to forward recent
judgments for reporting in this column (with full
acknowledgement) to: Tony Bingham, 3 Paper Buildings, Temple,
London EC4Y 7EU. DX: 37164 Biggleswade
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