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Housing Grants, Construction and Regeneration Bill [H.L.]

8.6 p.m.

House again in Committee on Clause 105.

Lord Williams of Elvel moved Amendment No. 154:

Page 60, line 32, leave out ("7") and insert ("14").

The noble Lord said: In moving Amendment No. 154 I should like to speak also to Amendments Nos. 155 to 157. Clause 105 sets certain time limits which in our view are too rigorous. Amendment No. 154 seeks to postpone the time limit on the appointment of the adjudicator. Amendment No. 157 seeks to create a longer interval for an adjudicator to arrive at a decision. The Government have put down Amendment No. 156 which may meet our concerns. I shall leave my noble friend Lord Howie of Troon to speak to Amendment No. 155, if he so requires. I beg to move.

Lord Howie of Troon: I support the noble Lord, Lord Williams of Elvel, in what he said. Amendment No. 155 is a small and self-evident amendment. Its only purpose is to add a measure of precision to a matter which at first sight appears imprecise. If there is a time limit it ought to have a starting point. My amendment is intended to provide it.

Lord Lucas: As I hope the Committee will be able to judge from Amendment No. 156, we have been listening to the industry. We are convinced that in many

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cases it will not be possible for an adjudicator to reach a decision within 14 days. We no longer wish to insist that every adjudication agreement includes a 14-day timetable. I hope that that will satisfy the intent of Amendment No. 157. We also believe that some adjudications will take more than 28 days. I believe it right that parties should be able to agree a suitable extension. In order to safeguard weaker parties, however, we propose that such an extension may not be agreed until adjudication proceedings have started. That means that parties could not give away their right to quick adjudication in the contract but would be able to take a separate decision on each dispute as it arose.

But time limits should still be challenging. Amendment No. 154 would double the period to appoint an adjudicator. We do not believe that that is necessary. Appointment should be a relatively simple matter, and we certainly wish to avoid the situation which has arisen in some arbitration proceedings where the appointment of a tribunal has dragged on for months. By far the easiest way to ensure rapid appointment is to name the adjudicator in the contract. Naming a reserve or two might also be good policy.

Where the appointment of an adjudicator is left to another person or an institution there is no need to build in unnecessary delay. In these days of fax machines, electronic mail, and computerised record-keeping, it should be possible to name a single adjudicator and refer a dispute to him within one week. I therefore urge the noble Lord to withdraw his amendment.

Amendment No. 155 also appears to introduce unnecessary delay. It could be interpreted as requiring a party to the dispute to notify the others before proceeding to adjudication and may have been laid in the belief that the period of an adjudicator's appointment needs some formal starting date. That is not the case. Clause 105(2) would require an adjudicator to be appointed within seven days of any party starting the process. We do not wish to slow things up by imposing steps that could be unnecessary.

If parties wish to stipulate formal notification in their contracts they are free to do so, but we do not wish to insist upon it in statute. Most parties will not embark upon adjudication lightly. While it is intended to be cheap and quick, it is neither free nor instant. If parties seriously believe they can get something put right with a couple of letters or phone calls I am sure they will do it. Where a dispute goes beyond the immediate goodwill of the parties to resolve, the adjudicator should be brought in as soon as possible. We would oppose any intermediate steps. I hope that noble Lords will reconsider the need for their amendments.

Lord Howie of Troon: I am entranced by the Minister's remarks about months. My noble friend is talking about an extra seven days. That is hardly months, hardly an unconscionable delay. I think my noble friend should pursue his amendment.

Lord Williams of Elvel: I certainly will, with that encouragement. I have taken advice, as I am sure the noble Lord will recognise. Unless it is written into the contract--I agree with the noble Lord that if it is written

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into the contract--that a certain person, or two or three people, will adjudicate in a dispute in the contract, there is then a question of finding an appropriate adjudicator who must be impartial, as I think we agree, although the Government did not accept the amendment tabled by my noble friend Lord Howie. Nevertheless, I think that it was understood that he should be independent.

The adjudicator, whoever he or she may be, may have many other things to do, a full diary, and so on. I and others feel that seven days is a short period of time. We are talking about calendar days rather than working days. There could be bank holidays; there could be weekends. It is a short period unless the adjudicator's identity is specified in the contract. I ask the noble Lord to reflect upon what I am saying, because it has been represented to me as being a little too short. Given that the Government rightly want to impose some timetable, seven days seem to me and to others to be too short. I hope very much that I can persuade the noble Lord to look again at the matter.

Lord Lucas: My noble friend Lord Ferrers and I are united in thinking that, having listened to the argument put by the noble Lord, Lord Williams, we should consider what he said.

Lord Williams of Elvel: I am most grateful to the noble Lord. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 155 not moved.]

Lord Lucas moved Amendment No. 156:

Page 60, line 32, leave out from ("days,") to end of line 35 and insert--
("(b) require the adjudicator to reach a decision within 28 days of referral or such longer period as is agreed by the parties after the dispute has been referred;").

The noble Lord said: I spoke to this amendment with the previous one. I beg to move.

On Question, amendment agreed to.

[Amendments Nos. 157 and 158 not moved.]

[Amendment No. 159 not moved.]

8.15 p.m.

Lord Williams of Elvel moved Amendment No. 160:

Page 60, line 38, at end insert--
("(e) enable the adjudicator to have regard to Codes of Practice published by the Construction Industry Board;
(f) preclude subsequent legal proceedings against the adjudicator; and
(g) provide for the adjudicator's finding to be binding unless appealed.").

The noble Lord said: It may be for the convenience of the Committee if I speak also to Amendment No. 162A in the name of my noble friend Lord Berkeley. Amendment No. 160 relates to the adjudicator's role. The Committee has already discussed possible legal proceedings against the adjudicator. So I do not need to go into that. I wish to expand upon the codes of practice which the Construction Industry Board is publishing and will publish in the future.

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I accept that to date the Construction Industry Board has been considering codes of practice in respect of tendering rather than the performance of contracts. Nevertheless, I am advised that the board is considering codes of practice related to the performance of contracts as well as to tendering. If that is the case--one cannot deny that it is the case, because it is the case--I would have thought that the adjudicator should be allowed to have regard to those codes of practice when they are produced. It is important that the adjudicator be fully apprised of what the board, which, after all, is the overall body supervising this arrangement, believes to be right in terms of practice.

I recognise, and the Committee will recognise, that codes of practice have different functions and different legal status. There have been many debates in this place on the legal status or otherwise of codes of practice. I am not trying to put codes of practice into legal forms; in other words, I am not saying that the codes of practice should be like a highway code or anything that can be quoted in evidence in court. All I am trying to establish is that as and when the Construction Industry Board produces guidance in the form of codes of practice, the adjudicator should be enabled, including in his decision, to have reference to such a code of practice.

I leave out paragraph (f) for the time being because we have already discussed that. I come to paragraph (g) of the amendment which will:

    "provide for the adjudicator's finding to be binding unless appealed".
Again, we have had some discussion of what happens when the adjudicator adjudicates. Our belief is that the proper method of going about this is to say, "All right, this is binding, so it must be implemented unless it is appealed." In our view that is the right way rather than to leave slightly in the air the matter of whether there is any binding adjudication or whether there is more in the nature of arbitration. How far an adjudicator's findings should be binding is complex. The noble Viscount, Lord Ullswater, referred to that in our earlier debates. Nevertheless, I feel it useful to propose the amendment so that the Government can put on the record how they see an adjudicator's position; how they see the finding by an adjudicator; and in what respect it can be binding or non-binding.

My noble friend Lord Berkeley will be speaking to his amendment which puts a slightly different picture, but in my view a reasonable picture. I hope that we can, first, concentrate the debate upon the codes of practice question. Secondly, I hope that we can get to the point of the status of the adjudicator's decision. I beg to move.

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