Raynsford verdict on adjudication - it is still to come to fruition
It is nearly three years now since statutory adjudication first sprouted, beanstalk-like, and with what some saw as unhealthy speed, from the fertile wake of the Latham report into construction procurement. Some say, apocryphally no doubt, that Part II of the Housing Grants, Construction and Regeneration Act 1996 was drafted by a biologist. I, of course, could not possibly comment, but if it were, then it would explain a lot.
After a dormant phase during which the government and the construction industry's equivalent of the chattering classes laboured over the wording of the government's Scheme for Construction Contracts, both the act and the scheme were brought into force in May 1998.
The sapling procedure was feted by industry enthusiasts but was eyed warily by the lawyers who felt that anything this badly thought out and (with apologies to the biologist) badly drafted was bound to fail sooner or later.
This did not stop various industry bodies from propagating their own adjudication rules and in the early days there were no fewer than 16 adjudicator nominating bodies operating a variety of bespoke adjudication procedures.Once the legislation was passed, however, both fans and sceptics realized that little could be done either way until the procedure had put down a few roots and its development been monitored.
The government for its part, perhaps appreciating the biologist's shortcomings, undertook to make changes if they were necessary.The monitoring process has been carried out in the main by the Construction Industry Board (CIB) which reported to construction minister Nick Raynsford at the end of last year. Raynsford recently published his response and announced his proposals for making improvements to the adjudication process.
These proposals are made against the background of adjudication doing well, but requiring a little pruning and tweaking to particular areas including: problems caused by bespoke adjudication procedures; difficulties defining the boundaries of adjudication; ambush costs, particularly rogue provisions that the referring party should pay the costs of adjudication, whatever the outcome; and enforcement.
Raynsford's approach to these problems may best be described as emanating from the letnature-take-its-course school of husbandry, and if he were on the panel of Gardeners' Question Time he would probably have responded something like this:
Q: Should bespoke adjudication be eradicated leaving the parties no choice but to adopt the scheme?
A: It is too soon to say. The scheme needs more time to grow. Bespoke adjudication may be stamped out by the courts anyway. The scheme needs to be marketed and promoted more widely.
Q: Uncertainty as to the boundaries of adjudication has given rise to a lot of litigation.Can the definition of what is and what is not covered by the Act be improved?
A: Such intervention is not necessary at this stage. The courts are doing a good job of weeding out cases that fall outside the Act. Interested bodies should support more test cases.We should review the problem again in, say, two years.
Q: Should the scheme be amended to clarify adjudicators' powers to deal with ambush by excessively long submissions?
A: As the scheme balances adjudicators'powers and duties, it is not necessary to amend it.Adjudicators and the parties would benefit from further guidance as to their rights and obligations.
Q: Should those parts of the scheme relating to enforcement of adjudicators' decisions be deleted as they are inoperable and are not used?
A: If they are not used, they cannot have given rise to any adverse effects. There is no need to delete them.
So, is everything in the garden lovely, or will these proposals for better guidance for adjudicators and the parties alike, not amount to more than a row of beans? In the words of the minister himself, it is probably too soon to say.