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1 – 10 of 14Gary F. Sinden, James R. Mason, David G. Proverbs and Colin A. Booth
Part II of the Housing Grants, Construction and Regeneration Act 1996 introduced major changes to the way in which construction contracts are administered. The payment and…
Abstract
Purpose
Part II of the Housing Grants, Construction and Regeneration Act 1996 introduced major changes to the way in which construction contracts are administered. The payment and adjudication provisions, in particular, have been well received by the United Kingdom construction industry and can be viewed as a success. However, avoidance tactics aimed at reducing liability for payment and discouraging payees away from adjudication became commonplace. The response from Parliament is contained in the Local Democracy, Economic Development and Construction Act 2009, which came into force on 1 October 2011. The purpose of this paper is to analyse stakeholders’ first impressions of the new Act and disseminate the insights gained to the industry and policymakers.
Design/methodology/approach
Following a review of the current and proposed legislation, industry views were collected by an electronically administered survey. The views of construction industry stakeholders on how the new Act will operate and its prospects of delivering the intended outcomes were ascertained and are presented.
Findings
The survey findings indicate there is broad support for the original Act and for the amendments made in the new Act, tempered with pessimism about the likely inability of the new measures to address issues around entrenched industry practice. Avoidance and evasion of key terms is contemplated, for instance in relation to extending payment terms and drafting contracts in favour of the paying party.
Originality/value
The conclusions reached call into question the extent to which improvement of this aspect of the construction industry can be achieved by statutory intervention alone, particularly in testing economic circumstances.
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Jennifer Charlson, Robert Baldwin and Jamie Harrison
The purpose of this paper is to consider the implications of the admission of oral contracts to statutory adjudication proceedings. A major criticism of the Housing Grants…
Abstract
Purpose
The purpose of this paper is to consider the implications of the admission of oral contracts to statutory adjudication proceedings. A major criticism of the Housing Grants, Construction and Regeneration Act 1996 (“HGCRA 1996”) was that Section 107 required contracts to be “in writing” for the parties to be able to use statutory adjudication. In response, the Local Democracy, Economic Development and Construction Act 2009 repealed Section 107 of the HGCRA 1996. This paper considers the implications of the admission of oral contracts to statutory adjudication proceedings, whereby adjudicators’ may now have to determine the exact nature of oral agreements. The critical literature review has highlighted that there is a perceived risk that, by allowing oral contracts to be decided through adjudication, there could be an increased risk of injustice (as the adjudicator may have to decide oral testimony about contract formation). Adjudicators may now have to determine the exact nature of oral agreements. The critical literature review has highlighted that there is a perceived risk that by allowing oral contracts to be decided through adjudication there could be an increased risk of injustice (as the adjudicator may have to decide oral testimony about contract formation).
Design/methodology/approach
The questionnaire responses of 38 construction industry professionals were analysed by identifying facts and salient themes. The research aims to identify to what extent the changes have widened the scope for entering into adjudication proceedings and whether there is an increased risk of injustice due to the short timescales involved.
Findings
There was significant agreement that parties to an oral agreement have an increased risk of injustice through wrong interpretation of the terms and significant disagreement that allowing oral contracts to be referred to adjudication will encourage the use of oral agreements. In addition, construction industry professionals were interviewed in the Midlands, UK, to obtain their opinions, views and perceptions of the admission of oral contracts to statutory adjudication.
Originality/value
The research is anticipated to be of particular benefit to parties considering referring an oral contract to adjudication.
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Issaka Ndekugri, Ana Karina Silverio and Jim Mason
States have intervened with legislation to improve cashflow within construction project supply chains. The operation of the UK’s Housing Grants, Construction and Regeneration Act…
Abstract
Purpose
States have intervened with legislation to improve cashflow within construction project supply chains. The operation of the UK’s Housing Grants, Construction and Regeneration Act 1996 leads to payment obligations stated either as a contract administrator’s certificate (or equivalent) or an adjudicator’s decision. The purpose of the intervention would be defeated unless there are speedy ways of transforming these pieces of paper into real money. The combination of the legislation, contractual provisions and insolvency law has produced a minefield of complexity concerning enforcement of payment obligations stated in these documents. Unfortunately, the knowledge and understanding required to navigate these complexities have been sorely lacking. The purpose of this paper is to plug this gap.
Design/methodology/approach
Legal research methods and case study approaches, using relevant court decisions as data, were adopted.
Findings
The enforcement method advised by the court is the summary judgment procedure provided under the Civil Procedure Rules. An overdue payment obligation, either under the terms of a construction contract or an adjudicator’s decision, amounts to a debt that can be the subject of insolvency proceedings. Although the insolvency enforcement method has been successfully used on some occasions, using it purely as a debt collection weapon would be inappropriate and likely to be punished by the court.
Originality/value
The paper contributes to knowledge in two ways: (i) it maps out the factual situations in which these payment challenges arise in language accessible to the construction industry’s professions; and (ii) comparative analysis of payment enforcement methods to aid decision-making by parties to construction industry contracts. It is relevant to the other common-law jurisdictions in which similar statutory interventions have been made.
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Akintola Akintoye, Suresh Renukappa and Hamish Lal
The UK construction industry has been at the forefront of finding efficient, cost‐effective and fair methods of resolving disputes. Therefore, to ensure the 1996 Act is more…
Abstract
Purpose
The UK construction industry has been at the forefront of finding efficient, cost‐effective and fair methods of resolving disputes. Therefore, to ensure the 1996 Act is more effective in achieving its intended objective, the new Act came into force on the 1 October 2011 in England and Wales, and 1 November 2011 in Scotland. The purpose of this paper is to explore one of the most important amendments in the new Act, the abolition of the “contract in writing” rule. The extent to which the UK industry is aware of the likely implications of the abolition of the “contracts in writing” rule in the new Act on the adjudication has not been empirically explored – which is the core raison d'être of this paper.
Design/methodology/approach
A web‐based, online questionnaire survey method was employed to collect data. Descriptive analysis was used to analyse the data obtained from the 102 completed and usable questionnaires for inference and conclusion. This research employed t‐tests to compare means of small to medium‐sized enterprises (SMEs) and large organisations.
Findings
The findings suggests that the UK construction industry is well aware of the abolition of the “contracts in writing” rule in the new Act and the industry perception is that it is good for their business. The survey revealed that the amended rule in the new Act would significantly increase number of adjudications, number of hearings before the adjudicator, assessment of witness evidence, costs of the adjudication process, and timescale of an adjudication process. The three most important challenges to the adjudication process with the amended rule in the new Act include: assessment of wholly oral or partly oral contract terms that were agreed, availability of evidence, and availability of information. There are no significant statistical variations between the responses of the SMEs and large organisations.
Practical implications
The paper concludes that the new Act will have significant impact on the UK adjudication. Therefore, the UK industry urgently needs to adopt and become accustomed to quite significant changes in the new Act. It is advised that an industry‐wide awareness‐raising programme on the new Act needs to be developed and deployed.
Originality/value
The paper improves understanding and awareness of the construction industry professionals regarding the likely implications of the abolition of the “contracts in writing” rule in the new Act on the adjudication.
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The paper seeks to examine the debate on mediator style and provide empirical evidence on mediator orientation, which has implications for party choice and the development of…
Abstract
Purpose
The paper seeks to examine the debate on mediator style and provide empirical evidence on mediator orientation, which has implications for party choice and the development of professional standards for construction mediators in the UK.
Design/methodology/approach
This paper analyses the theoretical arguments and distinctions in mediator style and assesses the available evidence relating to the utilisation of evaluative or facilitative mediator approaches in the UK and US construction industry. The paper reports on data from qualitative interviews with construction lawyers experienced in using mediation in the UK to assess the level of evaluative conduct experienced.
Findings
The findings suggest that interviewees had experienced a mix of evaluative and facilitative interventions by mediators. The data support the contention that construction mediation in the UK mirrors the experience of the USA and is becoming “lawyer‐driven” and adversarial, with mediators utilising evaluative techniques which some members of the legal profession prefer.
Research limitations/implications
The qualitative data are based on a small sample of mediation users in the UK construction industry. However, interviewees were selected from respondents to a randomly conducted large‐scale postal survey of commercial and construction lawyers. All interviewees were repeat users of the process and all but one had received training in mediation or are practising lawyer‐mediators.
Practical implications
The data provide evidence of different mediator techniques currently utilised in the UK construction industry and the practices of lawyers in the mediation process. The findings have implications for party choice and should inform the development of professional standards in construction mediation practice.
Originality/value
The paper provides original data on the practices of mediators and lawyers in construction mediation.
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Angus Reid and Robert C.T. Ellis
The paper seeks to examine how the existence of a “dispute” for the purpose of construction adjudication has been determined and to consider whether direct application of the…
Abstract
Purpose
The paper seeks to examine how the existence of a “dispute” for the purpose of construction adjudication has been determined and to consider whether direct application of the often cited Halki Shipping Corporation v. Sopex Oils Ltd could lead to a breach of natural justice.
Design/methodology/approach
The paper analyses construction adjudication enforcement judgments since 2000 and considers the different approaches taken by the various judges. Cases are considered chronologically and are grouped into distinct phases to demonstrate the development of the law in this area.
Findings
There is no definitive meaning of “dispute” and the existence of a dispute in construction adjudication is a subjective issue requiring a practical common‐sense approach relying on the facts, the law and policy considerations. If a strict application of Halki is used in such cases, a breach of natural justice may arise whereas a common‐sense application of the Halki test, taking cognisance of time‐related issues and the original intent of construction adjudication, offers scope to establish a universal policy.
Practical implications
The paper provides a historical summary which should encourage parties to adjudication to recognise that many of the court challenges which arise could be prevented, or could be more easily resolved if a reasonable, common sense approach was adopted.
Originality/value
The paper provides a comprehensive review of construction adjudication case law relating to the existence of a “dispute” and indicates how the law has developed in this area.
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Jackie Gregory-Stevens, Ian Frame and Christian Henjewele
Adjudication was introduced to the English construction industry in 1996 in response to its litigious nature. At the time, adjudication aimed to provide a time-efficient…
Abstract
Purpose
Adjudication was introduced to the English construction industry in 1996 in response to its litigious nature. At the time, adjudication aimed to provide a time-efficient, cost-effective solution to construction disputes. The industry is concerned that adjudication is not always providing the expected benefits due to increasing cost, the length of time it takes to resolve disputes and the difficulty in maintaining good relationships between the parties in dispute. Mediation is recommended here as a most desirable approach to resolving disputes without affecting the relationship between the parties. However, the benefits of mediation have not been fully appreciated by all due to slow uptake. This paper aims to identify barriers to the greater use of meditation the English construction industry.
Design/methodology/approach
This paper presents results from a study that investigated issues preventing greater use of mediation. The study involved 20 case studies of previous dispute resolutions, ten in-depth interviews and 357 usable responses to a structured questionnaire survey involving the English construction industry.
Findings
The research found a limited detailed awareness of mediation within the English construction industry due to a lack of detailed knowledge among industry stakeholders and a lack of emphasis from construction contracts. The study revealed that there is strong support for adjudication; however, the majority of those with experience of adjudication would prefer to use mediation as the first step in resolving disputes.
Originality/value
This research identifies the support required for mediation and its preference among those with and without prior knowledge of both adjudication and mediation for the English construction industry. The paper provides an insight into barriers that need to be addressed to increase use of mediation.
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Temidayo Oluwasola Osunsanmi, Clinton Ohis Aigbavboa, Wellington Didibhuku Thwala and Ayodeji Emmanuel Oke
The model and existing practice of the construction supply chain (CSC) in the United Kingdom (UK) and Australia was presented in this chapter. The policies and reports that…
Abstract
The model and existing practice of the construction supply chain (CSC) in the United Kingdom (UK) and Australia was presented in this chapter. The policies and reports that support the practice of the CSC were examined in both countries. It was discovered from the review of literature that the UK has a more detailed report targeted at improving the CSC than Australia. However, both countries have a common factor affecting their CSC which originates from fragmentation experienced within their supply chain. Construction stakeholders in the UK and Australia believe that collaboration and integration are vital components for improving performance. The majority of the contractors in both countries embrace collaborative working for the sole purpose of risk sharing, access to innovation and response to market efficiency. However, most of the models developed for managing the CSC in the UK are built around building information modelling (BIM). Also, the reviewed studies show that supply chain management practice will be effective following the following principle: shared objectives, trust, reduction in a blame culture, joint working, enhanced communication and information-sharing. Finally, the UK has a more established framework and more CSC models compared to Australia.
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Issaka Ndekugri and Victoria Russell
The purpose of this article is to provide a critical analysis of court decisions on what amounts to a dispute that may be referred to adjudication under the Housing Grants…
Abstract
Purpose
The purpose of this article is to provide a critical analysis of court decisions on what amounts to a dispute that may be referred to adjudication under the Housing Grants, Construction and Regeneration Act 1996.
Design/methodologyapproach
Legal research methods were followed. The first stage entailed a review of relevant literature. Reports of court decisions were then studied to identify cases involving litigation on what amounts to a dispute. A total of 26 cases, going back to 1965, were identified. Each case was then analysed to extract the applicable legal principles, particular attention being paid to clarity and consistency with not only other cases but also the policy underlying the relevant legislation.
Findings
Until only recently, first instance judges adopted the one or the other of two opposing approaches to the question, thereby causing considerable litigation. The Court of Appeal has twice approved a flexible approach based on the principle that a dispute arises only after a party has been given reasonable opportunity to consider the other party's claim and has rejected it expressly or by implication.
Originality/value
The novelty and global spread of adjudication lends the article considerable originality and value. Its main value is in the guidance it provides as to the principles that the court is likely to apply in answering the question whether a dispute capable of being referred to arbitration or adjudication exists. It is hoped that knowledge of these principles will reduce litigation on this issue.
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Temitope Seun Omotayo, Oskar Danvers-Watson and Adekunle Sabitu Oyegoke
Construction project delivery is hinged on the performance of the contractor and subcontractors. In many private construction projects in the UK, there are trust issues between…
Abstract
Purpose
Construction project delivery is hinged on the performance of the contractor and subcontractors. In many private construction projects in the UK, there are trust issues between the subcontractor and contractor, especially when there are no collateral warranties to protect the rights of the subcontractors. The purpose of this study is to investigate and identify the causations of distrust between subcontractors and contractors and proffered panaceas.
Design/methodology/approach
Qualitative open-ended questions were used. Twenty respondents, mainly supervisors, tradesmen, subcontractors and main contractors in the UK, were interviewed. The thematic analysis approach was used to identify the dominant themes.
Findings
The interview findings were presented descriptively, and the frequency approach identified more occurring themes from the interviewees’ responses. The six themes contributing to distrust between subcontractor and contractor are financial pressures, partnering approach, payment and trust, nature of trust, internal influence and unfair payment.
Practical implications
The findings of this study revealed that many subcontractors have limited knowledge of the clauses in contracts they are entering into. Thus, in addition to obtaining collateral warranties, subcontractors must carefully understand their contractual obligations and payment arrangements before agreeing to be part of a construction project.
Originality/value
Although this study aimed to shed light on the distrust between subcontractors and contractors in private UK construction projects, improvements in contract administration, subcontractors continued professional development and improved valuation processes can reduce distrust between subcontractors and contractors.
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