ADJUDICATION FOLLOWING THE LATHAM REVIEW by hcj

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									           ADJUDICATION FOLLOWING
             THE LATHAM REVIEW

                                     Graham Watts
                                     Chief Executive
                        Construction Industry Council

         Chairman, Construction Umbrella Bodies (CUB)
                   Adjudication Task Group
10th Adjudication Update Seminar 08.11.04
                            Five Documents

     •   Budget 2004                        17 March
     •   DTI “kick-off” letter              24 March
     •   CUB Report                         29 July
     •   Latham letter                      17 September
     •   Griffiths response                 21 October



10th Adjudication Update Seminar 08.11.04
                                  Budget 2004
     Section 3: meeting the productivity challenge

     Para 3.59

         ‘… following concerns expressed by the
         construction industry on unreasonable delays in
         payment, the Government will review the
         operation of the adjudication and payment
         provisions in the Housing Grants, Construction
         and Regeneration Act 1996 to see what
         improvements can be made’.

10th Adjudication Update Seminar 08.11.04
                       DTI “kick-off” letter

        • ‘the Chancellor announced a review of
          payment provisions…’
        • DTI to run Review
        • Latham to chair Review
        • Detailed Timetable



10th Adjudication Update Seminar 08.11.04
                          Review Timetable

         •   End April                      - First meeting
         •   End July                       - Reports from work groups
         •   Early September                - Agree options
         •   Early October                  - Publish consultation paper
         •   End March ‘05                  - Implementation starts



10th Adjudication Update Seminar 08.11.04
      Review Group meeting – 29 April
     • Not a personal review

     • Establish two sub-groups for Review

         - Payment Group
                     chaired by Richard Haryott
         - Adjudication Group
                     chaired by Graham Watts


     • Agreed timetable
10th Adjudication Update Seminar 08.11.04
         CUB Adjudication task force

     •   Existed since 2001
     •   Guidance for Adjudicators (June 2002)
     •   Users’ Guide to Adjudication (April 2003)
     •   Enhanced Membership for Review
     •   Invited views from other bodies


10th Adjudication Update Seminar 08.11.04
                      CUB Report 29 July
                                Modus Operandii

     • Three full meetings
     • Need for consensus
          - Green
          - Amber
          - Red

10th Adjudication Update Seminar 08.11.04
                      CUB Report 29 July
                                     Major Issues

     •   Adjudication Working Well
     •   Need for further guidance
     •   19 ‘green’ recommendations
     •   8 ‘amber’ recommendations


10th Adjudication Update Seminar 08.11.04
                      CUB Report 29 July
                                 Further Guidance
                • Improve Quality of Adjudicators
                  More training & guidance on:

                    - dealing with late/inadequate submissions
                    - adjudicator’s power to take the initiative to ascertain
                      the facts/the law
                    - appointment of experts, assessors and legal advisers
                    - fees

                • Improve Guidance for users
                  - assess whether adjudication is right for them

10th Adjudication Update Seminar 08.11.04
                      CUB Report 29 July
                  Recommendations – Scope

     • Case to consider removing exclusion for PFI
       contracts
     • Case to consider removing the residential
       occupier exclusion
     • Law needs to be clarified in relation to
       ‘evidenced in writing’
     • Case to consider deleting process plant
       exclusions

10th Adjudication Update Seminar 08.11.04
                      CUB Report 29 July
                         Recommendations – Act
                                Cost

     • Outlaw the practice of one party requiring that
       the referring party pays both parties’ costs
       irrespective of outcome
     • Parties have freedom to agree that the
       adjudicator may award the parties legal costs

10th Adjudication Update Seminar 08.11.04
                      CUB Report 29 July
                 Recommendation – Act
              Single Adjudication Procedure

     • Section 108 should outlaw unacceptable
       provisions by tightening up on the
       minimum requirements for a compliant
       procedure
     • There should be a single procedure

10th Adjudication Update Seminar 08.11.04
                      CUB Report 29 July
                      Recommendations – Act
                      Immunity/Independence

     • Consider the introduction of statutory
       protection for adjudicators
     • Provide a clearer definition of the term
       ‘independent’

10th Adjudication Update Seminar 08.11.04
                      CUB Report 29 July
              Other Recommendations – Act

     • Amend Section 108(1) to include under or
       arising out of the contract
     • Prohibit such devices as requiring payments to a
       trustee stakeholder account (or similar)
     • Adjudicator should have a power to make full
       and final decision on their own jurisdiction for all
       purposes – or a power limited to certain
       circumstances
10th Adjudication Update Seminar 08.11.04
                      CUB Report 29 July
         Green Recommendations – Scheme
     • enforce the principal that the parties will bear their own costs
     • enable adjudicator to resign through lack of jurisdiction.
     • reasons to be given unless the parties agree otherwise.
     • express reference to the right to serve a response.
     • express ‘slip rule’.
     • express requirement that the adjudicator shall copy legal or
       technical advice to the parties.
     • Several drafting amendments aimed at improving procedure for
       appointment, related disputes, payment of interest, enforcement,
       negligence.



10th Adjudication Update Seminar 08.11.04
        Latham Letter 17 September
                          Key Points – General

     • ‘…enquiry into payment and related issues…’
     • A Government proposed and commissioned
       review.
     • New option for making Regulatory Reform
       Orders under Regulatory Reform Act (2001).
     • Adjudication = ‘agreed set of proposals’.
     • Payment = ‘harder to reach consensus’
     • Invite Government Consultation document

10th Adjudication Update Seminar 08.11.04
        Latham Letter 17 September
                    Key Points – Adjudication

     • Act has worked ‘generally very well’.
     • Adjudication – ‘remarkably successful process’.
     • Changes recommended – ‘to deal with those
       unforeseen issues which have arisen’.
     • Not to alter general thrust of Act.
     • Reinforce the intentions of Parliament.

10th Adjudication Update Seminar 08.11.04
          Griffiths Response 21 October
                          Key Points – General

     • Review is ‘valuable’
     • Credit that Review generated so much agreement
     • Excellent starting point for full consultation exercise
     • Consultation paper will contain ‘detailed proposals to
       establish degree of support …for ... specific changes to
       the Act’.
     • Amber issues are still under consideration.
     • Objective ‘has to remain that of building further
       consensus wherever possible’.


10th Adjudication Update Seminar 08.11.04
          Griffiths Response 21 October

                Rules out Changes to Scope

     • Extending Act to cover contracts for
       domestic customers
     • Removing exclusion of head contracts
       under PFI
     • Removing exclusion for operations related
       to process plant
10th Adjudication Update Seminar 08.11.04
                                 NEXT STEPS
     • Complicated negotiations within Government

                   - Inter-departmental
                   - What can be done under RRA
                   - Devolved Powers in Wales


     • No consultation paper this side of 2005
     • No chance of action before next General
       Election


10th Adjudication Update Seminar 08.11.04

								
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