The podcast was fun. First of its kind here at Building. Rudi Klein and yours truly were interviewed by Building’s ace interviewer, Chloë McCulloch, about the government’s changes to payment rules.
They’re called, “Preparing Britain for the Future”. It might have been more fun to call it, “Repairing Britain from the Past”.
I am delighted our prime minister is giving us our 10p’s worth of attention (there will be changes to the Construction Act), but a tad sorry to see go what we at Building first called the “Hugh Grant Four Weddings and a Funeral Act”. What on earth can we do to improve the dreadful title of the Community Empowerment, Housing and Economic Regeneration Bill?
Rudi and I are guessing at what’s coming. The hint is that the listening done via the civil servants at what was the DTI, then BERR, and the feedback and consultations, will bring changes. What does that mean? We have not had the results of the consultation. Perhaps it’s lost in the post.
But if we do not see the ousting from adjudication of the costly “contracts in writing” mistake, and if we do see new payment rules heaving with lawyers’ language, there will be an awful row. All the government says of construction changes is that it intends on “improving cashflow through construction supply chains and, where appropriate, encouraging parties to resolve disputes by adjudication rather than litigation”. Oh, do stop using that tosh language. You think you can fob us off by saying nothing?
Three changes (I think) will apply to adjudication and three to the payment rules.
I have already mentioned ousting the “contracts in writing” rule. The change will allow oral agreements about construction work to be adjudicated. I have no doubt that most experienced adjudicators will be able to wrestle with arguments about who promised what to whom when agreeing the plastering subcontract, and then go on to decide the plastering dispute. The idea is to stop the tactic of refusing to actually place the orders, thereby making oral contracts. All that leads to no end of trouble.
The other two adjudication changes are sensible. There is to be a ban on those people who try to stop adjudicators opening up, reviewing and revising certificates. Mind you, I never see much of that sort of rule. The reason is that employers shoot themselves in the foot by banning the opening up of certificates issued by the architect.
Nobody actually reads the small print in the disputes clauses when getting into a contract. If they did, you
can bet the subbie would say something rude
Also to be banned (well, sort of) is the iffy tactic of a term in the homemade subcontract small print, which requires the subcontractor to pay the main contractor’s legal costs of an adjudication, come what may. In real life nobody actually reads the small print in the disputes clause when getting into a contract. If they did, you can bet the subbie would say something rude. So the new rule will be that any agreement as to who pays the legal costs will only be effective if agreed “after the appointment of the adjudicator”. And that, my friends, will put paid to all that small-print footwork.
As to the payment rules, this is important and sound. The Construction Act is heaving with language that must go. Get shot of words and phrases we do not use – “set-off”, “abatement”, “due date” and “final date for payment”. All we want is to be told “what” sum and “when” it is payable. If you must, use the word “valuation“. And then make it plain that the valuation sum is the sum to be paid. Then make it plain that if the payer thinks he has a right to withhold part of the sum, he must issue a withholding notice from the valuation. Banned too will be the footwork of, “I will pay you subcontractor when your monies are certified up the line by the PQS/architect”. It is pay when paid by another name and banned anyway.
But let me end with a pat on the back for the government and the civil servants. I whinge that all this is taking too long, but you are listening and you are trying very hard to give this building industry what it wants. Well done. I said that on the pod. Gordon will no doubt get his pod weaving.
Tony Bingham is a barrister and arbitrator
To listen to the podcast, go to www.building.co.uk/podcasts