ADJUDICATION%20FOLLOWING%20THE%20LATHAM%20REVIEW

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ADJUDICATION FOLLOWING THE LATHAM REVIEW

• Graham Watts
• Chief Executive
• Construction Industry Council
• Chairman, Construction Umbrella Bodies (CUB)
• Adjudication Task Group

2
Five Documents

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

3
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.

4
DTI kick-off letter

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

5
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

6
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

7
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

8
CUB Report 29 July

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

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CUB Report 29 July

• Major Issues
• Adjudication Working Well
• Need for further guidance
• 19 green recommendations
• 8 amber recommendations

10
CUB Report 29 July

• Further Guidance
• Improve Quality of Adjudicators
• More training guidance on
• - dealing with late/inadequate submissions
• - adjudicators 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

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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

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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

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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

14
CUB Report 29 July

• Recommendations Act
• Immunity/Independence
• Consider the introduction of statutory protection
  for adjudicators
• Provide a clearer definition of the term
  independent

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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

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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.

17
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

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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.

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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.

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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

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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