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Lord Howie of Troon: My Lords, I listened with care to what the noble Lord the Minister said, and with a great deal of sympathy. It seems to me that he has performed something not unlike the Indian rope trick; he has produced some form of magic. Also, he said that he did not really wish to say anything at this point. I have had periods in my lifetime when I did not wish to say things. I shall not alarm the House by drawing attention to what they were, but I have not always meant my intentions to be absolutely clear, although they were frequently successful or, put another way--to avoid boasting--not infrequently successful. It is not good enough to say that the Government do not wish to say something. The fact is this: we have a substantial clause on adjudication which, let me remind the Minister, is one of the three key factors from the Latham report which the Government have seen fit to legislate upon. Here is one of the key elements of that report--adjudication--and yet the Government are unwilling to say what it actually means.

There is a theme running throughout the Bill. It is most evident in the scheme, but it is also prevalent in the Bill itself. That theme is a confusion between arbitration and adjudication. It was even evident in the reply of the noble Lord the Minister. Let me agree. If the parties wish to go to arbitration instead of adjudication, that is all right. They can do so. There is

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nothing to hinder their agreeing to do that. But if they want to go to adjudication it should be made absolutely clear that adjudication is not arbitration.

That is what I have tried to do in Amendment No. 152 and it is what my noble friend Lord Berkeley has tried to do in Amendment No. 152A. The Minister has shown a certain amount of flexibility in his replies to us today. We shall hope that that flexibility in his replies is reflected in words on the Marshalled List when we come to Third Reading and eventually on the face of the Bill. I do not want to press the amendment. However, the amendment, or something like it--I shall not go to the gallows for my wording--should be in the Bill. It should be either where I have stated it should be or somewhere in the adjudication clause so that people know what is expected of them.

The Government are setting up parameters. The parameters ought to be clear so that people know the hurdles--if a hurdle can be a parameter or a parameter can be a hurdle--they have to leap over. It should be made clear. The Government have so far failed to do that. They ought to, either in my words or some other words. However, the Minister has been conciliatory. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 152A not moved.]

Lord Lucas moved Amendment No. 153:

Page 61, line 6, at end insert--
("(2A) The contract shall also provide that the adjudicator is not liable for anything done or omitted in the discharge or purported discharge of his functions as adjudicator unless the act or omission is in bad faith, and that any employee or agent of the adjudicator is similarly protected from liability.").

The noble Lord said: My Lords, in moving this amendment I wish to speak at the same time to Amendment No. 154. In Committee both the noble Lord, Lord Williams of Elvel, and the noble Lord, Lord Howie of Troon, introduced amendments which included some sort of legal immunity for the adjudicator. Initially it was the Government's view that this was something to be left for parties to cover in their contract but, on reconsideration, we believe that freedom from legal liability for an adjudicator acting in good faith is such an essential feature of the process that it should be specified in primary legislation. I hope that the noble Lords I have just mentioned continue to agree to that.

Amendment No. 154 is partially consequential on Amendment No. 153. However, noble Lords will note that the phrasing of subsection (3) of Clause 106 has also been clarified, since we felt it was vital that there should be no confusion about its meaning. What we are saying--and have always been meaning to say--is that, unless all the conditions in subsection (2) and the new subsection (2A) are met, the provisions for adjudication in the scheme for construction contracts will apply in their entirety. There is to be no "mixing and matching" between the contract and the scheme. One has either the contract operating; or, if the contract falls down on these provisions, one has the scheme in its entirety. Mixing and matching would be risky. We do not wish parties to be in any unnecessary doubt about what adjudication

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procedures are open to them. I believe this is a helpful clarification. I shall seek to move the amendment when its time comes.

Lord Williams of Elvel: My Lords, I am grateful to the Government for introducing this amendment. It certainly meets the concerns that we expressed in Committee about the legal liability of those persons who are appointed as adjudicators. It would be absurd if someone were to be appointed as an adjudicator and, in discharging his duties in good faith, were to be subject to legal action.

I prefer to reserve my comments on Amendment No. 154 until we reach it in the Marshalled List because there are points arising on it which I wish to address. I am grateful to the Minister for introducing this amendment which meets our concerns on the legal liability of an adjudicator.

Lord Howie of Troon: My Lords, I wish to add my thanks to the Minister for bringing forward the amendment. Several of us brought up this matter in Committee. Lest the noble Lord thinks that my thanks are not double barbed, perhaps I may say that the amendment, which I welcome, would have been very much strengthened if my Amendment No. 152 had been accepted so that an adjudicator knew what adjudication was and knew that it was not arbitration.

Lord Lucas: My Lords, with thanks to the noble Lord, Lord Howie of Troon, I commend the amendment to the House.

On Question, amendment agreed to.

Lord Lucas moved Amendment No. 154:

Page 61, line 7, leave out ("such a procedure, the relevant") and insert ("a procedure which complies with the requirements of subsections (1) to (2A), the adjudication").

The noble Lord said: My Lords, I have already said what we believe this clause to be for. I look forward to listening to the noble Lord, Lord Williams, and to discussing the concerns he may have on the amendment. I beg to move.

Lord Williams of Elvel: My Lords, the Bill as drafted states:

    "If the contract does not provide for such a procedure, the relevant provisions of the Scheme for Construction Contracts apply".
In place of,

    "such a procedure, the relevant",
the Government wish to insert,

    "a procedure which complies with the requirements of subsections (1) to (2A), the adjudication".
That seems to be slightly circular. I fully understood the Bill as drafted but I cannot quite understand what is meant by referring back to subsections (1) and (2A) the adjudication. If the Government had accepted my noble friend's amendment on the subject of adjudication, I would be quite clear on the matter. But since we are left slightly in the dark about the status of the scheme of construction of contracts, I should be grateful if the noble Lord could enlighten me on exactly what this amendment produces.

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My next point may not be relevant to this amendment but it is certainly relevant to the discussions we had in Committee. There is a question of whether the adjudicator, under whatever procedure, is allowed to go beyond what is relevant to the case he is adjudicating on. In Committee we discussed the problem of adjudicators ranging far and wide. I should be grateful if, in the context of responding to Amendment No. 154, the noble Lord could reassure us that adjudicators will not be ranging far and wide in searching out information which may not be relevant either to their charges under Clause 106 or indeed under the amendment moved by the noble Lord. This is quite an important factor in determining what adjudication means and what adjudicators under the clause are allowed to do.

8.30 p.m.

Baroness Hamwee: My Lords, I do not see it as my brief to support the Government on this part of the Bill or, indeed, necessarily to oppose them. I am attracted by the approach which the noble Lord, Lord Lucas, used when he spoke to this amendment a moment ago. It is probably right to be clear about what scope there may be, if any, for mixing and matching, as the noble Lord put it. However, we might find it easier to discuss such amendments if we were dealing first with the scheme. It is perhaps an oddity of the way in which these matters are approached that we come to the substance of it after we have dealt with the way in which the scheme is to be applied or not. I believe that this approach by the Government is probably helpful in practice.

Lord Howie of Troon: My Lords, I intervene briefly on Clause 106(3). If I am out of order, I am sure that a noble Lord will tell me, so I give due warning. Subsection (3) states,

    "such a procedure, the relevant provisions of the Scheme for Construction Contracts apply".
But in reading the Bill I notice that the clause understates the case. It refers to "the Scheme", when there are in fact two of them. We shall come to this matter later in the Bill in more detail. But, as I understand it, there is a scheme put forward by the Minister, whoever that person is, for England and Wales and another for Scotland. Each will produce a scheme of their own, but they will not necessarily be the same scheme because of the changes in the law which apply between our two united countries pro tem.

I am merely laying down a marker for a debate which we shall have later. I believe that the Government will have to take a little more care about this part of the clause. I had not thought about it early enough to table an amendment, which would have been kinder. I do not expect the Minister to reply at this stage because I am being a nuisance by inventing an amendment which I have not tabled. But there are two schemes, not one.

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