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Opinion - Editorial
I would like to thank all of the contributors for their assistance again this month. As we were oversubscribed for this issue I would also like to apologise to those whose contributions I have not included. I promise you all that they will be in the next issue.
Adjudication
In my last editorial I warned of a possible White Paper on changes to the Housing Grants, Construction and Regeneration Act 1996 (HGRCA). This has now been published and asks for comments on certain proposals. A copy of this White Paper can be found at http://www.dti.gov.uk /consultations/ files/publication-1479.pdf.
Proposals for comments include:
- Removing the need to issue a S110(2) notice of amount due under the contract. Instead S110(1) would be strengthened to require a better definition in the contract for what is to be paid, when it is to be paid, and how it is to be calculated.
- Requiring that a withholding notice should state the net amount to be paid as well as the amount to be withheld.
- Restricting the use of "pay-when-certified" and "pay-what-certified" clauses. There would be no change to the use of "pay-when-pay" clauses for "upstream" insolvency.
- Giving the Contractor the right to claim their reasonable costs for suspensions due to non-payment (S112 of the HGCRA), and allowing a reasonable period for remobilisation. These could be agreed in the contract, otherwise there would a "backstop" provision.
- Limiting the right to cross-contract set off to that of equitable set-off using the current legal tests.
- Giving the Contractor the right to be paid for materials manufactured off site, subject to certain safeguards.
- Preventing the use of Trustee Stakeholder Accounts for adjudicator's awards unless the recipient is insolvent. In that case the adjudicator would be given the power to act as the trustee stakeholder for his award to allow the loser a limited period to commence further proceedings.
- Giving the Adjudicator the powers to decide his own jurisdiction in relation to certain questions, i.e. is there a construction contract? Is there a dispute? Have I been properly appointed? This decision would be final and enforceable even if it is wrong.
- Giving the Adjudicator the right to payment even if he resigns for want of jurisdiction. Giving the Adjudicator statutory immunity (analogous to S29 of the Arbitration Act), rather than contractual immunity as present. This would give immunity from third party suites.
- Imposing the requirement for the Adjudicator to be independent as well as impartial. This would import Paragraph 4 of Part II of the Scheme into the HGCRA.
- If you wish to comment on these time is short. You only have until 21 June 2005. If you do not comment you cannot complain if what you end up with is not what you wanted. However, given the recently announced (at the time of writing this editorial) general election, I doubt whether any changes to the law will be enacted in the very near future.
Peter Cousins