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
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.
An awful lot of wasted money, adjudicator and court time has been spent fathoming quarrels about contracts
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.
Tony Bingham is a barrister and arbitrator