One problem that has bedevilled the Construction Act’s payment rules is finding a few simple sentences that explain what they actually are …
King’s College London and the Society of Construction Law (SCL) hosted a chat about amending the Construction Act. Hundreds attended. It was worth it.
Nobody came from the business and enterprise department, though. Pity. No member of parliament came, either. Pity, because parliament will be considering these reforms. The hundreds who did attend included adjudicators, dispute consultants, construction lawyers and big firms. But I didn’t spot many putter-uppers.
Not many of the eight-man firms that actually make up the industry came, and I know why. They were busy trying against the odds to build Britain’s buildings, and trying to get the cash in to pay for the bricks, blokes and plaster each week. Too busy to come to King’s College and teach us some common sense, but a pat on the back to King’s College and SCL for getting the event in the frame.
The struggle is on to find words that say the sum due will be paid, unless a pay less notice is issued by the final date for payment explaining why the sum due is not, after all, the sum due
Before I go any further, let me remind you what happened 10 years ago. Parliament gave us new payment rules in an act written just for the commercial construction industry, and a new management system for disputes. It is the hugely successful 28-day adjudication system, which makes enforceable decisions about disputes. I had expected whingeing about it, but it’s working so well there was none.
Mind you, in these 10 years we have licked the adjudicators into shape, and the courts are a superb guiding light. Being an adjudicator is now a serious job, demanding skills we never anticipated 10 years ago. No matter what the size or complexity of the dispute, we have developed a world-beating system that commerce welcomes. So the amendments to the act don’t touch adjudication.
What the amendments do focus on is trying to knock out what I call satellite disputes about the right to adjudicate. And let’s be plain: few disputes I adjudicate have no immediate quarrels of a technical nature. These are not at all about the actual dispute; instead, a sophisticated and legitimate game is played to provide a future reason for avoiding the future enforcement of the adjudicator’s award. It doesn’t matter that the games more often than not amount to nought. But the money spent in adjudication dealing with these satellite disputes is enormous and wasteful. One example is arguments about whether the contract is “in writing”.
Nearly all of us agree that this satellite issue should be ousted. Sadly, what is not to be ousted is allowing differing rules to apply to the procedure. It is easy to trip over a special rule and get into difficulties. Pity that parliament will not say that the Scheme for Construction Contracts is to be used in all cases.
The amendments to the payment rules are in principle welcome. The snag here, though, is not so easy to cure. Nobody is clever enough to put otherwise good ideas into plain, English. What we’re trying to say is this: hitherto, it has been the devil’s own job to truly find out “the sum due”. The reason is that one man’s meat is another man’s poison. The struggle is on to find plain English that says the sum due will be calculated and published in detail by a certifier in head contracts and by the main contractor in subcontracts. And that valuation will be published no later than five days after the valuation date. But a valuation may also be done by the potential payee at the same time. However, that payee valuation only becomes the sum due if the valuation by the certifier or main contractor is published late, or not at all, or is wrong. Then, the payee’s valuation becomes the sum due.
None of us can find language to say all that. Nor can we find language for the next bit: having got the sum due there is great enthusiasm to retain the withholding notice; in other words, giving the payer a limited opportunity to actually pay less. The struggle is on to find words that say the sum due will be paid, unless a pay less notice is issued by the final date for payment explaining why the sum due is not, after all, the sum due.
In these 10 years we have licked the adjudicators into shape, and the courts are a superb guiding light
Do you think that if we held another chat at King’s College and invited, coaxed, cajoled the putter-uppers to come along as well, they would give us the plain English words to get us home?
Tony Bingham is a barrister and arbitrator