HOME NEWS & VIEWS MEETINGS COMMITTEE LAW REPORTS CONTACT LONDON INSTITUTE
Articles
Adjudication Update
In the last issue of News & Views I set out the timetable for the production of a proposed Government White Paper on changes to the Housing Grants Construction and Regeneration Act 1996. The more observant of you may be wondering what has happened to this, given that I was predicting it should be out in the autumn. Well it appears that there have been a few delays.
The government were planning to use the Regulatory Reform Order (RRO) procedure to bring about changes to the primary legislation quickly. However such procedures require there to be consensus within the relevant industry before it can be used. Whilst there was good general consensus in the submissions made on changes to the Adjudication procedures, those for the payment provisions proved more difficult, with the views of the various factions within the construction industry somewhat polarised. It will therefore not be possible to use an RRO for changes to this element, which will need new legislation.
Sir Michael Latham recently published an article in Building Magazine that sets out what he thinks may be in the White Paper concerning adjudication, when it does come out. For those of you who did not see this his "hunches" are that it may propose the following.
- The adjudication process will not be extended to include PFI contracts, residential occupiers or the process plant sector, because no discussions have taken place with those sectors.
- Contracts that require costs to be paid by the referring party even if they win (Bridgeway v Tolent) will be outlawed.
- Adjudicators will be given immunity but not the power to award costs.
- Adjudicators will be required to be independent and not just impartial.
- The use of the Scheme will become compulsory. Procedures that do not conform precisely to the Scheme will be void.
- The use of trustee stakeholder accounts for adjudicator's awards will only be allowed if the adjudicator personally directs this.
- "Some" action will be taken to allow adjudicators to rule on their own jurisdiction.
- The reimbursement of costs associated with a suspension for non-payment will be accepted.
- Cross-contract set-off will be banned.
- "Pay when certified" clauses will also be explicitly banned, although Sir Michael expressed the opinion that these were probably already covered by the existing ban on "pay when paid" clauses.
Sir Michael's view remains that the government will probably make these changes, although he is not certain of that.
As they say "watch this space".
Report by: Peter Cousins