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Date Posted: 20:44:59 10/13/02 Sun
Author: 何焯華條賓周+歡迎炸佢: jameslam@hkpro.com.hk
Subject: 淨屌何焯華條仆街呢+歡迎炸佢: nancychow@hkpro.com.hk

Adjucication
The standard forms of contract have, for some years, contained provision for adjudication. Although there is no definition of the term ( and this continues to be the case under the new Act), adjudication was recommended for construction contracts in the Latham Report and has now become mandatory in certain construction contracts by the Housing Grants, Construction and Regeneration Act 1996. "Statutory" adjudication, what is dealt with below, is not to be confused with the original constructual process, which is dependant upon the particular terms and status agreed between the parties. "Contractual" adjudication may, however, comply with the requirements of the Housing Grants, etc, Act so that the two processes may overlap. As examples of adjudication under contract, the traditional decision of the Engineer under the ICE Conditions complies with what is generally understood by the term; and under the Engineering & Construction Contract (ECC), the equivalent process is called adjudication, in this case being carried out by an independent third party.

The important distinction between adjudication and other forms of ADR lies in the fact that adjudication is intended to result in one party being compelled, at least temporarily, to submit to the decision, for example, by paying money to the other party. Consequently, the status of an adjudicator's decision can give rise to dispute. In Cameron v. Mowlem the plaintiff sub-contractor requested the appointment of an adjudicator under Form DOM/1 to determine a dispute over payments due. Without giving reasons, the adjudicator determined that the sum of 52,800 pounds should be paid, but Mowlem resisted payment relying on a right of set-off, in respect of which the required notice had been given. The Court of Appeal held, first, that the adjudicator's award could not be enforced as an arbitration award; and secondly that the adjudicator's award did not preclude the contractor from exercising a contructual right of set-off, and that the adjudicator's powers did not include determination of sums due under the terms of the sub-contract. The case illustates the need for clarity in determining the status of an adjudicator's decision.

Can the decision of an adjudicator be challenged on its merits, either on fact or law? The Cameron v.Mowlem case confirmed that the decision did not rank as an award for the purpose of challenge in accordance with the Arbitration Act. There is a line of authority dealing with the circumstances in which the decision of an independent expert might be called into question, for example where reasons for the decision are given which are demonstrably wrong. It has been held by the Court of Appeal, however, that the decision of an expert, which would include an adjudicator, cannot be challenged unless it can be shown that the expert has departed from the instructions given to him in a material respect.

Statutory adjudication

Following the Latham Report of 1994 the Department of the Environment issued consultation papers intended to explore ways of legislating to achieve the reforms recommended. This proved somewhat controversial, but a Bill was introduced dealing with a limited number of the Latham recommendations which was passed into law as Part 2 of the Housing Grants, Construction and Regeneration Act 1996. The Act deals with three construction-related matters. First, there is an elaborate definition of the term "construction contract", to which the substantive provisions apply (or do not apply if the definition is not satisfied). Secondly, there are measures providing for the compulsory availablity of adjudication and its consequences. Thirdly, there are important provisions dealing with the right to payment under a construction contract, as defined.

"Construction contract" is defined in section 104 and 105 of the Act as meaning an agreement for carrying out construction operations (as defined), including sub-contracted work and (importantly) architectural design or surveying work or advice on building, engineering, decoration or landscape. The term "construction operations " is widely defined but (significantly) excludes a long list of construction operations such as extraction of oil, gas or minerals, installation of plant for nuclear processing, power generation or water or effluent treatment, bulk storage of chemicals, oil, gas, steel, or food or drink. Also, excluded is the manufacture or delivery of components, materials, plant and machinery unless the contract also provides for installation. The Act applies only to construction operations in England and Wales (and Scotland), whatever the applicable law of the contract. Accordingly, the Act will apply to an Italian sub-contractor supplying marble if it is also to be installed by the sub-contractor; but it will not apply to a United Kingkom supplier who merely delivers components for heating and ventilation, drainage or fire protection, etc. It should be noted that this is the first attempt to "ringfence" the construction industry for the purpose of special legislation. The success of new measures remain to be seen.

Adjudication is dealt with in section 108 of the Act which provides as follows:
"(1)A party to a construction contract has the right to refer a dispute arising under the contract for adjudication under a procedure complying with this section.
For this purpose 'dispute' include any difference.
(2) The contract shall-
(a)enable a party to give notice at any time of his intention to refer a dispute to adjudication;
(b)provide a timetable with the object of securing the appointment of the adjudicator and referral of the dispute to him within 7 days of such notice;
(c)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.
(d)allow the adjudicator to extend the period of 28 days by up to 14days, with the consent of the party by whom the dispute was referred;
(e)impose a duty on the adjudicator to act impartially; and
(f)enable the adjudicator to take the initiative in ascertaining the facts and the law.
(3)The contract shall provide that the decision of the adjudicator is binding until the dispute is finally determined by legal proceedings, by arbitration(if the contract provides for arbitration or the parties otherwise agree to arbitration) or by agreement. The parties may agree to accept the decision of the adjudicator as finally determining the dispute.
(4)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.
(5)If the contract does not comply with the requirements of subsections (1) to (4), the adjudication provisions of the Scheme for Construction Contracts apply.'

Of particular note is the requirement that a party must be enabled to give notice 'at any time'. This provision, at a stroke, removes the traditional authority of the Engineer or the Architect to render decisions which could be challenged only by a subsequent process of arbitration, often after completion of the contract. The new measure entitles the contractor (or even the Employer) to require immediate adjudication on any matter of difference. This measure also has a profound effect on the procedure under clause 66 of the ICE Conditions whereby a dispute is to be referred first to the Engineer. No such provision may hold up the right to adjudication. The consequential amendments to clause 66 are dealt with.

The other provision of particular note is that clause 108 is not restricted to payment disputes, but includes disputes relating to time, quality and any other matter capable of giving rise to a difference between the parties. Bearing in mind that all sub-contracts must also contain such provisions, the possibility of over-lapping and conflicting adjudication decisions is immediately apparent. A further notable feature, to which attention was drawn during the parliamentary debate, is that section 108(4) provides only for immunity in contract, which will be apt to bind only the immediate parties, and did not any third party who may suffer damage as a result of the adjudicator's decision. This is to be contrasted with section 29 of the Arbitration Act 1996.

Procedure for adjudication

Clause 108 operates by requiring either a conforming contractual adjudication scheme, or in default the statutory Scheme for Construction Contracts is to apply. The Scheme(which proved highly controversial in its drafting) was published shortly before the primary legislation came into force, on May 1,1998. The Scheme contains a much more detailed procedure for the giving of notice, the appointment, the adjudication procedure, the decision and its enforcement. As regards ocerlapping disputes (for example where the same issue arises under the main contract and one or more sub-contract) the Scheme provides only that, where the dispute in question is the same or substantially the same as one which is already the subject of an adjudication decision, the adjudicator "must resign". The parties may, of course, agree some other course, and the issue may be dealt with by way of a contractual scheme. As regards enforcement, the adjudication decision takes effect as a contractural debt,since the procedure itself is expressly required to form part of the construction contract. Little consideration appears to have been given to the problems of enforcement which, in the event, have proved to be a major difficulty. In principle, there is nothing to prevent the party against whom an adjudication decision is to be enforced claiming a right of equitable set-off. This may be excluded by the terms of the contract, but to do so would elevate the adjudication decision to a preferred status that may not be intended. This is a matter for agreement between the parties. In terms of the mechanism of enforcement, the existence of an arbitration clause creates a further problem, in that the court procedure for summary judgment will not now be available in the light of recent authority. Various solutions are possible. The standard forms of contract now contain a special provision in the arbitration decision to abrogate the arbitration clause, thereby permitting enforcement through court action. Secondly, the statutory Scheme enables the adjudicator to order that his decision is complied with peremptorily, in which case, by the application of an amended version of section 42 of the Arbitration Act 1996 (Enforcement of Peremptory Order) the court is given jurisdiction to enforce the decision. Some of the potential difficulties of enforcement were considered in the recent TCC decision in Macob v. Morrison Construction.

The statutory Scheme, which was introduced by the new Labour Government in 1998 (the Act having been introduced by the previous Conservative Government),deals with immunity of the adjudicator in paragraphy 26, which closely follows:

"26 The adjudicator shall not be liable for anything done or omitted in the discharge or purported discharge of his functions as adjudicator unless the act of omission is in bad faith and any employee or agent of the adjudicator shall be similarily protected from liability."

However,while section 29 of the Arbitration Act creates an immunity which will be effective against third parties, the Scheme, where it applies, appears to take effect as a matter of contract which will not, therefore,bind third parties. Additionally, the Scheme will not apply where there is a conforming contractual procedure. Again, it is unclear whether the statutory Scheme can apply in part, for example, where immunity is not dealt with in the contractual procedure.

A number of contractual adjudication scheme have been published complying with the requirment of section 108, such as that published by CEDR. Any of these procedures may be incorporated into the contract to provide a conforming scheme. The effect of this is to avoid the application of the Scheme for Construction Contracts, so that the parties should ensure that any provision of the Scheme they may wish to apply is included in the contractual procedure.

The success or otherwise of these statutory measures remains to be established. Among the major drawbacks of the Scheme may be mentioned the following:
(1)the process is temporary and necessarily inexact. In most cases there will not be edequate opportunity to consider detailed arguments within the stipulated period of 28 days. This may be seen to operate unfairly against the Respondent, where the Claimant has had unlimited time to prepare his claim;
(2)the overall objective of adjudication is to avoid "cashflow" being held up by the inability to challenge decisions of the Engineer or Architect. The extent to which this is achieved, however, is entirely dependant on the ability to obtain and enforce decisions in timely manner. The technical complexity of the provisions militate against this being achieved;
(3)where an adjudication decision is given and enforced, there is no requirement for security for repayment, in the event of the decision being reversed. The subsequent insolvency of the receiving party will, therefore, create a loss, for which recovery may ultimately be sought from the adjudicator, subject to the immunity provisions. It appears questionable whether appropriate indemnity insurance will be available;
(4)the Scheme undermines the status and authority of the Engineer and Architect operating under traditional forms of contract, and their ability adequately to preserve the interests of the Employer. This aspect of the Scheme has given rise to much adverse comment from the professional institutions.

The extent to which statutory adjudication effectively replaces other forms of dispute resolution, including arbitration, in the construction industry remains to be seen.

Bibliography:
Construction Law

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淨屌何焯華條仆街呢+歡迎炸佢: nancychow@hkpro.com.hk
何焯華條賓周+歡迎炸佢: jameslam@hkpro.com.hk
點解呢度又有中文又有英文又有西班牙文咁搞野既﹖﹗
WHY DOES HERE GET CHINESE ENGLISH AND SPANISH ALL IN THE SAME TIME SO FUNNY?!
(SORRY I DON'T KNOW SPANISH)
Robert Falcona
淨屌何焯華條仆街呢
何焯華條賓周

活了一百萬次的貓(發人深省的故事)
有一隻活了一百萬次的貓，它死了一百萬次，也活了一百萬次。但貓一不喜歡任何人。
有一次，貓是國王的貓，國王很喜歡貓，做了一個美麗的籃子，把貓放在裡面。
每次國王要打扙都把貓帶在身邊。不過貓很不快樂，有一次在打扙時，貓被箭打死了，
國王抱著貓，哭得好傷心、好傷心，但是貓沒有哭，貓不喜歡國王。
有一次，貓是漁夫的貓，漁夫很喜歡貓，每次漁夫出海補魚，都會帶著貓，不過貓很不快樂。有一次在打漁時，貓掉進海裡，漁夫趕緊拿網子把貓撈起來，不過貓已經死了。漁夫抱著牠哭得好傷心、好傷心，但是貓並沒有哭，貓不喜歡漁夫。
有一次，貓是馬戲團的貓。馬戲團的魔術師喜歡表演一樣魔術，就是把貓放在箱子裡把箱子和貓一起切開，然後再把箱子合起來，而貓又變回一隻活蹦亂跳的貓，不過貓很不快樂，有一次魔術師在表演這一個魔術時，不小心將貓真的切成了兩半，貓死了。
魔術師抱著切成了兩半的貓，哭得好傷心、好傷心，不過貓並沒有哭，貓不喜歡馬戲團。
有一次，貓是老婆婆的貓，貓很不快樂，因為老婆婆喜歡靜靜的抱著貓，坐在窗前看著行人來來往往，就這樣過了一天又一天、一年又一年。有一天，貓在老婆婆的懷裡一動也不動，貓又死了，老婆抱著貓哭得好傷心、好傷心，但是貓並沒有哭，貓不喜歡老婆婆。有一次，貓不是任何人的貓，貓是一隻野貓，貓很快樂，每天貓有吃不完的魚，每天都有母貓送魚來給牠吃。牠的身旁總是圍了一群美麗的母貓，不過貓並不喜歡牠們。
貓每次都是驕傲的說：「我可是一隻活過一百萬次的貓喔！」
有一天，貓遇到了一隻白貓，白貓看都不看貓一眼，貓很生氣的走到白貓面前對白貓說：「我可是一隻活過一百萬次的貓喔！」白貓只是輕輕的「哼！」了一聲，就把頭轉開了。之後，貓每次遇到白貓，都會故意走到白貓面前說：「我可是一隻活過一百萬次的貓喔！」而白貓每次也都只是輕輕的「哼！」了一聲，就把頭轉開。
貓變得很不快樂，一天，貓又遇到白貓，剛開始，貓在白貓身邊獨自玩耍，後來漸漸的走到白貓身邊，輕輕的問了一句話：「我們在一起好嗎？」而白貓也輕輕的點了點頭「嗯！」了一聲，貓好高興、好高興，牠們每天都在一起，白貓生了好多小貓，貓很用心的照顧小貓們，小貓長大了，一個個離開了，貓很驕傲，因為貓知道：小貓們是一隻活過一百萬次的貓的小孩！
白貓老了，貓很細心的照顧著白貓，每天貓都抱著白貓說故事給白貓聽，直到睡著。
一天，白貓在貓的懷裡一動也不動了，白貓死了。貓抱著白貓哭了，貓一直哭、一直哭、一直哭，直到有一天，貓不哭了，貓再也不動了，貓和白貓一起死了，貓也沒有再活過來。
沒有情感的活了一百萬次，並不如有愛的活了一輩子；無法體會生命的活了一百萬次，
更是不如用生命付出愛的一輩子。在每個人的生命裡，或多或少都會有一些讓人深刻體驗的事情，讓人慶幸此時此刻活在這世界上，讓人很清楚的了解活著的美好。
我想有了這些，或許你覺得此生你已經足夠了，錯了！生命中還有更深刻的體驗等著你－－那就是付出你的愛－－若你覺得沒有，我想那可能是你還沒遇到讓你不可思議的白貓而已。
如果你夠幸運的話，在你一生當中，你會碰到幾個握有可以打開你內心倉庫的鑰匙。
但很多人終其一生，內心的倉庫卻始終未曾被開啟。
其實很多人都不知道，鑰匙就在自己手上。
貓雖然活了一百萬次，卻從沒有真正的活過，貓一直被人捧在手掌心中，一直被人疼愛著，但他確一點都不開心，直到他開始去愛，開始去體驗人生，有了家庭、有了愛人、有了小孩，開始付出他的愛。
心中有了牽掛，即使是負荷，卻是最甜蜜的負荷，終於能甘心的過完的一生，安詳的死去。

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