I asked a real evangelist to take my place, Vicki Russell of London solicitor Fenwick Elliott. She said yes, but only if she could abseil down the Petronas Towers in Kuala Lumpur. All for charity, of course.
Other parts of the world are taking a peep at the Construction Act. New Zealand introduced the Construction Contracts Act last month. New South Wales has had a clone in force for a year. Western Australia has a bill awaiting space in parliament. Queensland will follow. Hearsay has it that South Africa is taking a look. There is even a rumour that one of the states of America is showing interest.
They are all poking around the UK's Construction Act and plugging in improvements here and there. What motivates them? Some countries have a backlog of cases coming to court and with it a huge bill. A private high-speed dispute system cuts the queue and eases the burden on the public purse too.
There is another motive. New Zealand had an embarrassing episode four or five years ago. Several large contractors caught a serious cold when a couple of major developers went down the Swanee. Folk downstream went bust too.
New Zealand's act focuses on getting paid. adjudication is only part of that. The mechanism is devoted to establishing the true amount due from the employer in each progress payment. It is about establishing the precise date for the cash payment and a right to suspend work if payment is late or short. If there is a quarrel about what is payable and when, then an adjudicator trots out to decide. All that applies between all payers and payees on the project. The UK Construction Act has payment rules of course but our act is actually all about an alternative dispute system – adjudication. It is as though we first invented a dispute system and said, "Oh, by the way, here is an improved payment system."
I like the emphasis of the New Zealand way. It bans "pay-when-paid" and "pay-if-paid". The drafters thought our Construction Act was not entirely clear on this. They allowed the parties to agree their own progress payment machinery – what, when, why. If anyone agrees a daft arrangement, such as delayed payment, that's alright. But if nothing is agreed, there is a detailed default provision, which I would love to see in our default system – that is, "the Scheme". Can we steal it, please? It even says how the payment claim or application is to be presented. It must include fully detailed build-up and supporting documentation. Then, and this is vital, the payer must respond to the payment claim, giving chapter and verse if it disagrees with the claim, together with full reasons for deducting or withholding money. That disagreement notice must arrive within 20 days of the payment application or else the payee must pay the amount claimed. I suspect that that is what our parliament in Westminster really meant to do as well, but it got itself into a terrible tangle.
Can you see how the adjudicator now slips into place? He comes to the pitch when the payer has objected to the contractor's progress payment figure. That is a crystallised dispute. Moreover, the payer and payee have already exchanged their reasons why they say a particular payment is due. They gave each other a full build-up.
How does the New Zealand adjudication system operate? They really did learn something from the UK. Their Construction Act has one set of rules on "How to adjudicate". The UK has umpteen, probably 100 rules. I do wish we had just one. The time period for the process is about the same as ours. The decision is, like ours, temporarily binding. The adjudicator can even award a party costs if the other party began or defended an adjudication using allegations or objections "without substantial merit". The adjudicator is paid before the decision is released. As to enforcement, the status of the decision is that of a court judgment. This is different from the UK, where we have to sue on the adjudicator's decision. If Malaysia asks me to be an evangelist for the New Zealand ideas, I too will abseil down the Petronas Tower. Well, maybe.
Postscript
Tony Bingham is a barrister and arbitrator specialising in construction. You can write to him at 3 Paper Buildings, Temple, London EC4 7EY, or email him on info@tonybingham.co.uk.
