Talking shop 'til you drop

One of the best organisations in the construction industry is called the Society of Construction Law. I love it. It has been going for nigh on 20 years, and I think it is about to drop a clanger. Let me come to that in a minute or two.

When the society first started all those years ago, I used to creep into the back of the meeting room at King's College, London, to listen to talks about construction law. Those talks were always staggeringly impressive. I learned oodles. I wasn't a member, just an interloper. One day I got caught; join, they said. I did. You should. If you have half an interest in learning lots from lectures, papers or talks and live in the UK, Ireland, or Hong Kong, come and listen.

The trick is that the society lays down no rules. It is just a meeting where someone has been coaxed to present their thoughts about a legal topic in construction. The other trick is that you are not there to agree or disagree. By all means ask a question or two, but that's that. It gets folk thinking, which isn't a bad idea, six times a year.

Three thinkers have just won prizes for their papers. Each year the society awards the Hudson Prize. First prize went to Adrian Baron. He is a senior associate with solicitor Deacons in Brisbane, Australia. I love what he said. I don't agree with it, but that's not the point. Ben Ring, solicitor with Linklaters & Alliance's construction division in Hong Kong, and Dr Hamish Lal, a solicitor at Freshfields Bruckhaus Deringer, shared the prize for second place.

Adrian Baron tackled a tricky area concerning liquidated and ascertained damages (LADs). LADs are a tickling stick. The very mention of the phrase gets people worked up. Enough to start a slanging match. They are the lawyer's bread and butter. Baron explains how employers sometimes go over the top when calculating these damages and then publishing the figure in the tender documents. If the figure is on the wild side, it may ultimately prove to be a penalty. No such thing as a penalty clause is allowed in English law, so the liquidated damages figures fail altogether.

So far, so good. Then what? If the main contractor is indeed late but the liquidated damages figure is void, does he get off scot-free? If not, how are the late completion damages calculated? Are they to be calculated as the true consequences of getting the building late? If so, are they capped at the previous published LADs figure, or are they capped at what should have been the correct LADs figure, or (keep up) are they open-ended? Can the employer happily claim more than the void penalty clause? I am not going to tell you what Baron concluded. Look it up on www.scl.org.uk.

I love the society is because it is a place for you or me or anyone to suggest or plead our point of view. It’s about to drop a clanger

Ben Ring's paper touches on a sensitive topic. He asks which courts or arbitral tribunals are truly independent. Carefully, he suggests that some courts in certain countries are not, how shall we say, "reliable" enough. For that reason, at least, commercial people opt for an international arbitration tribunal and carefully choose where the tribunal will hear the case. The worry then is that once a dispute arises, one of the parties to the arbitration clause will try to go to a local,

and possibly partisan, court to spoil the use of international arbitration. Ring's paper is vital reading for international construction people.

Dr Hamish Lal's prizewinner is another fascinating area for fancy footwork in disputes. The employer has delayed the main contractor but has a big smile on his face because the main contractor has failed to give written notice of extension of time. The contract has what we call a "condition precedent" provision, which makes it a must to send notices. Does the employer get off scot-free, or can the main contractor still make its claim for prolongation? The answer, or rather Lal's answer, is in his paper, free on the web.

And did you notice I said his answer? I love the society is because it is a place for you or me or anyone to suggest or plead our point of view. That's where I think it's about to drop a clanger.