Many in the industry will be keen to respond to this document and, therefore, I shall mention a few things that readers might wish to consider.
Perhaps the most significant recommendation made by the CIB was that the act should be amended to enshrine a single procedure to displace the myriad "bespoke" adjudication procedures. These bespoke procedures are, of course, designed either to flout the act or undermine it in some other way. Therefore, the CIB proposed that the scheme's adjudication procedure (with amendments) be incorporated into the act as the only permissible procedure.
Another recommendation made by the CIB was that the act's process plant exemption should be deleted. The anomalies and uncertainties inherent in this exemption have given rise to about six court cases following adjudicators' decisions. The DETR must be told that the process plant exemption must go; deciding what activity is encompassed by this exemption and what isn't is fast becoming a nightmare.
Back to the point about bespoke adjudication procedures: the CIB singled out the provisions in bespoke procedures requiring the referring party to meet the other party's costs win or lose.
How has the DETR responded to these points?
The DETR says it would be ‘premature’ to amend the act to deal with the bespoke problem and the process plant issue. I find this argument a bit daft
It believes that it would be "premature" to amend the act to deal with the bespoke syndrome and the process plant issue. These matters, say the DETR, are still giving rise to litigation. I find this argument a bit daft. Surely, the simple amendments that would be required to address the CIB's concerns would avoid this. Anyhow, I thought that this legislation was all about avoiding litigation.
The DETR adds that such amendments could reopen the compromises that underpinned the drafting of the act. Industry bodies wanted – and still demand – an effective adjudication procedure, not bespoke arrangements aimed at doing down the act. Nonetheless, the DETR agrees in principle that the act should be amended to deal with the costs issue. It also supports an interim amendment to the scheme to make clear that the adjudicator does not have the power to require the losing party to pay the winner's costs. If the DETR is prepared to amend the act to deal with the cost problem, it might as well make life easier for everyone and enshrine the scheme's adjudication procedure.
In the consultation document, the DETR responds to suggestions made by the CIB for amending the scheme. The DETR suggests that one way of dealing with these matters is to provide better guidance for both adjudicators and users of the process; this is welcomed by the industry. In fact, it is understood that the DETR will make resources available to help produce this guidance.
Comments are specifically invited on the proposal to include a "slip rule". I agree with the DETR's view that, within the context of adjudication, the slip rule should only extend to manifest errors of typography or arithmetic. The slip rule definition used in the Arbitration Act 1996 is too broad and could provide many more opportunities for attacking adjudicators' decisions.
Lack of space prevents me from dealing with the other CIB proposals to amend the scheme to deal with "ambush" and to provide a right for defendants to respond to referrals to adjudication.
The consultation paper can be downloaded from www.construction.detr.gov.uk/bregs/contract.htm. Responses are due by 18 June and can be emailed to firstname.lastname@example.org, tel 020-7944 5662. Rudi Klein is a barrister and chief executive of the Specialist Engineering Contractors Group.