JIM UNICK – RETIRED BUT NOT FORGOTTEN

The circle of life at CDR is turning. As we welcome Scott Thomson, sadly we announce the retirement of Jim Unick as Chairman and Director from CDR.

Jim has been a Director of CDR since its inception in 1997 and, as he reaches his 60th birthday, he has decided to step down. Jim will continue to act as a consultant, just doing so with a further practiced and refined golf swing.

FAR-EAST SPEAKER

In November last year, Janey Milligan, returned from Hong Kong where she was a guest speaker on “Security of Payment in the Construction Industry – Should it be the subject of legislation in Hong Kong?” at the Lighthouse Club Conference. Janey spoke about UK legislation regarding payment terms within the construction industry.

The aim of the Conference was to examine payment practices in jurisdictions outside Hong Kong. Janey commented with particular reference to the impact of the Housing Grants, Construction and Regeneration Act 1996.

Janey thoroughly enjoyed her visit and whilst there also took the opportunity to meet members of the RICS where she delivered a presentation on Trends in Dispute Resolution; Statutory Adjudication and Mediation.

PARTY OF THE YEAR

At the end of November, CDR held a party at Tiger Tiger in Glasgow to celebrate its 10 year anniversary and recognise the hard work and achievements which have contributed to establishing CDR as a well respected organisation. A selection of our most loyal and supportive clients, who have made a decade of success possible were invited. The event was voted a huge success and again we would like to thank all who attended and joined in the celebration on the evening.

After the event Janey remarked “The turnout was fantastic and we couldn’t have hoped for a better atmosphere – here’s to the next 10 years and more satisfied clients”.

LISA CATTANACH– STAR PUPIL

Congratulations to Lisa Cattanach, who is now well on her way to attaining an LLM in Construction Law and Arbitration from Robert Gordons University. Lisa is studying by distance learning and impressed all with her achievements in her first year exams. Her grades were sufficiently high to allow her direct entry to Fellowship of the Chartered Institute of Arbiters, subject to passing a peer interview. Let’s hope the second year is as successful as the first year.

Lisa said “Undertaking the LLM in Construction Law and Arbitration has helped to consolidate the practical expertise I have gained over the years with the theoretical background”.

EUROPEAN MEDIATION CONFERENCE 2007

Sponsored by the Chartered Institute of Arbitrators, Kahleen, who organises the Institute Mediation Group, attended the European Mediation Conference 2007 in Vienna on 27 – 29 September 2007. The Conference was attended by around 300 delegates and dealt, broadly, with:

• Quality of mediators;
• Standards and Accreditation;
• Credibility of mediation and lifting its profile across Europe; • The mediation process;
• The exchange of views; and
• The establishment of the European Mediation Network Initiative (EMNI).

As a practising Mediator, Kahleen found the course of particular interest although she claims to have seen little of the wonderful destination!

CDR ADJUDICATION CASE REVIEW

Within this issue of the Newsletter we concentrate on the thorny issue of timing in Adjudication, how it may effect your Decision and its enforcement.








Epping Electrical Company Ltd –v- Briggs and Forrester (plumbing Services) Ltd

This case involved an application for summary judgement by Epping to enforce an Adjudicator’s Decision. The contract between the parties stated that adjudications were to be in accordance with Construction Industry Council (CIC) procedure. After an agreement to extend the date for Decision, the Adjudicator relayed to the parties on the date of said Decision that it would be released when his invoice was paid. The adjudicator subsequently released his Decision 2 days later.

Briggs argued that as they agreed to an extension on the condition that the decision was to be released on that date and it wasn’t, the Decision was 7 days late and as such unenforceable. Epping argued that there was no such distinction within ‘the act’ or CIC procedure between the ‘reaching’ and ‘delivery’ of a Decision. On the evidence before them, the courts held that there is a distinction. If you agree to an extension to the Decision date on the basis that the Decision will be delivered, you better make sure you receive it, or it’s not worth the paper it’s written on!

Aveat Heating Ltd –v- Jarram Falkus Construction Limited

Aveat was employed to perform construction works in terms of GC/Works sub-contract conditions. Within this contract it was eventually held that the Scheme was implied into the contract. Within the Scheme, the courts interpreted, contrary to Jarram’s arguments, that ‘referral date’ means the date of receipt by the adjudicator not when the Referral was dispatched. This is of significance as the Adjudicator took the decision date to the wire before issue, and if the adjudication time-scale provisions were from the date of dispatch the Decision would be late

AC Yule & Sons Ltd –v- Speedwell Roofing & Cladding Ltd

AC Yule began adjudication against Speedwell under the Scheme. If you believe that silence is golden, Speedwell Roofing may disagree. During the predictable actions and formalities within the adjudication procedure, the adjudicator asked for an extension to the Decision date. AC Yule responded positively, Speedwell didn’t respond at all however, submitted further information. The Decision was released on a date accommodating the extension. When Yule attempted to enforce the Decision Speedwell argued it was late and as such not enforceable. Speedwell failed in that a ‘reasonable man’, acting honestly and reasonably is under obligation to make it clear if they object to an adjudicator’s request.

Conclusion

From the foregoing case we can see that the Courts are continuing to maintain the position held in Ritchie Brothers v David Philps that a Decision must be issued to the Parties on the Decision Date as the latest. The days of being able to advise Parties that you had reached your Decision by the Decision Date, and state it will be released upon payment of fees are fast becoming a distant memory.

However, the good news for Adjudicators is the position held in the AC Yule & Sons case where an Adjudicator requests an extension to the Decision Date. One Party does not state its acceptance or otherwise, however, acts as if it has agreed to an extension, the Party cannot later contend that the Decision was issued late.

Reforming the Construction Act – An Adjudicators Perspective

The current construction legislation ‘flavour of the month’ is the proposed re-jigging of ‘the Act’. The main points being considered following consultation are;

• Improve transparency and clarity in the exchange of information relating to payments to enable the better management of cash flow;

• Encourage the parties to resolve disputes by adjudication, where it is appropriate, rather than by resorting to more costly and time consuming solutions such as litigation; and

• Improve the right to suspend performance under the contract.

Janey L Milligan, Chairman of Construction Dispute Resolution, at a recent seminar commented in relation to bullet 2 above;

“On the whole the proposals are likely to make adjudication more accessible, particularly to Parties lower down the supply chain which was the initial intention of the Act. The possibility to award costs may make adjudication more popular for some Parties who otherwise would have chosen arbitration or court for their dispute. While I do have some reservations about oral and partly oral contracts I am in favour of the proposals”.

The information contained within this newsletter does not constitute legal or other professional advice. Construction Dispute Resolution will not be held liable for actions taken based on information contained within. Further information on anything contained within this newsletter is available upon request from info@cdr.uk.com