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RJC Consultants Newsletter No.11 Summer 2008 |
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Newsletter No 11 - Summer 2008 Dispute Resolution Update We are finding that mediation is gradually becoming more popular as a way of settling difficult construction disputes but is usually used in combination with Adjudication or Litigation. Further advice or details, email raycrabbe@rjc-consultants.co.uk Business Development For more information, contact Ray Crabbe raycrabbe@rjc-consultants.co.uk
A Salutary Tale of a Dispute Between an Employer and his Architect The outcome was that despite jurisdictional challenges, the Adjudicator decided to proceed and came to his decision (based on the facts of this case). The decision was he upheld the Architects original decision (with the exception of 1 week on one section of the works). So the outcome in this case was 3 adjudications (and resultant costs) and a decision that made no significant changes to the original EOT award. The moral is to ensure that you have a realistic case and a reasonable chance of success before commencing adjudication and made sure that you commence your adjudication against the correct party. For further advice and details email Ray Crabbe Further advice or details, email: raycrabbe@rjc-consultants.co.uk
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“Time at large”? Time is not “at large” in either of these scenarios. In the first instance the two of you have a dispute, which either party can generally refer to adjudication, but crucially, the actual extension of time entitlement remains as provided for under the sub-contract. In the second scenario, again there is a dispute, but this time concerning a breach of contract i.e. failure to administer the extension of time machinery of the contract. However, actual entitlement again remains as provided for under the contract. So what is “time at large” and what is the remedy? Time at large occurs when a party to a contract is prevented from performing under that contract, for example by an act of prevention, when there is no contractual provision to grant the affected party additional time for performance due to that cause of delay. This rarely happens in the construction industry. All of the standard forms of contract contain wide ranging extension of time provisions, which often, and for good measure, include the sweep-up force majeure clause. In the unlikely event that time truly is “at large” the remedy becomes the common law position of a “reasonable time for performance”; which probably opens up a different can of worms! Further advice or details, email rogersmith@rjc-consultants.co.uk “Payment or Withholding Notice?” In broad terms if you are abating the value of works carried out, then this can be done within the Notice of Payment but if you are imposing a set-off this must be done within a Notice of Withholding. To illustrate by example, if you engage a decorator to re- paint an office block to a specification calling for 2 coats of paint, and he applies to be paid in full when he has in fact only carried out 1 coat of paint in many areas, then you are entitled to adjust or abate the value applied for, within the Notice of Payment, to reflect the value of works actually carried out. He was never entitled to be paid the full monies claimed. If however, under the same arrangement, the decorator applies to be paid in full and has actually carried out 2 coats to all areas, but in doing so has splashed paint over the windows, ceilings and carpets, then the cost of cleaning up after him must be the subject of a set-off and must be included within a Notice of Withholding. In this case was entitled to be paid the full monies claimed, but you have reason to withhold some of that money to compensate for the damage you suffered. The distinction between Notice of Payment and Notice of Withholding is an important one to get right. Failure to do so is likely to result in an incorrect notice which would be ineffective. Further advice or details, email rogersmith@rjc-consultants.co.uk |
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