The government’s latest attempts at spelling out the Construction Act’s payment rules are a triumph of impenetrable gobbledegook. It’s time for some plain English

Eighteen months ago the DTI hosted a consultation day to consider changes to the Construction Act.

To you and me that means adjudication and improved payment rules. When I wrote about that day, 3 March 2006, I remarked on how “the attendees were completely at odds with each other about revising the payment rules”.

We have just had another consultation day. And do you know, this time the attendees were not all at odds with each other about revising the payment rules. They are only at odds with what the DTI – now called the Department for Business, Enterprise and Regulatory Reform – is proposing.

The reason is that the proposals are – and here I want to use all sorts of rude words; I want to take hold of the writer of the rules by his lapels, bash him on the head like Basil did to Manuel, and ask him to visit a building site on this planet – simply unfathomable.

I will tell you what is being proposed in a moment, but fasten first on this. The bloke what done the work needs, his money. To get it, he is willing to send an invoice (yes, yes we call it an “application for payment” – hurrah). If the bloke what does the paying disagrees with the application, the bloke what done the work wants to know why. Chapter and verse now. And if the difference between the two blokes is serious enough, there is another bloke called an adjudicator who will sort it out. Real life? Yes, of course.

Your drink Sir [Hereinafter called 'The Pint'].

"Your drink Sir [Hereinafter called 'The Pint']."

Instead, we got the Construction Act, a pig’s ear of a document. The payment rules are described in the latest edition of the Building Law Reports as “not conspicuous an example of the draftsman’s high art”. Lord Hoffman, the senior Law Lord, said they were “not felicitous”. Lord Neuberger went with “not well drafted”. Well, blow me down, but here in the 2007 proposed changes it looks as though the same draftsman has been brought in.

We do not want a set of payment rules that uses bad language. Damn it, not even us lawyers really understand all this tosh

Look, we do not want a set of payment rules that uses bad language. Plain English will do nicely. The proposals talk of “set-off”, “abatement”, a “become due date”, a “final date for payment”, a “notice” for this, a “notice” for that. This is lawyer talk. Stop it. True, true, if you go to my local pub you will find every bricklayer and builder arguing about equitable “set-off” and common law “set-off” and cross “set-off”, to say nothing of “abatement”. It occupies their drinking time. But damn it, not even us lawyers really understand all this tosh.

Here is a snifter of what is proposed: “Every construction contract shall provide for the giving of an ‘effective notice’ of the amount (if any) of the payment made or proposed to be made in respect of a payment which ‘becomes due’ under the contract, or would have become due ‘if’ a) the payee had carried out his obligations under the contract; and b) no set-off was permitted by reference to any sum claimed under the contract or one or more other contracts; and c) no abatement was permitted.

“To be ‘effective’ such notice must be given to the payee specifying: a) the amount (if any) of the payment made or proposed to be made; and b) where the amount in (a) is less than the amount that the person issuing the notice considers would have been due had (a) to (c) in subsection (2) applied, the ground for withholding payment, or if there is more than one ground, each ground and the amount attributable to it; and c) the basis on which those amounts were calculated.”

Please do not have any of this. Instead use plain construction industry English:

  • Every construction contract shall provide “valuation dates” and valuation machinery, and dates or circumstances when monies will be paid. If not, the “scheme” rules will apply
  • On or about five days before the valuation date, the contractor will submit his valuation in detail
  • But the contractor’s valuation is the amount payable, save that on or about five days after the valuation date, the payer will submit his valuation if he disagrees with the contractor’s valuation, or if he has a claim, and say in detail why and how much. The payer’s valuation is then the amount payable.

See? No talk of “set-off” and the rest. No talk of what ifs. And when there is a difference of opinion between the two valuations, then either the contractor can shrug and make a better fist in his next valuation or call, if he must, for an adjudicator to shake out the valuation. Easy.