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Yesterday's judgment should serve as a caution to any successful party in an adjudication. The Supreme Court has confirmed the Court of Appeal decision as to when any claim should be brought to review an adjudicator's decision.
Although the limitation period for the original claim pursuant to the contract may have expired the unsuccessful party in an adjudication can still bring proceedings for recovery up to 6 years after payment is made.
However a successful party will be time barred from commencing proceedings to confirm the adjudicator's decision or to seek further sums.
In this instance the Court found that Higgin's should have commenced legal proceedings to have the dispute finally determined within the limitation periods applicable to its claims.
Click download to read more about this judgment now.
In addition to those covered in our Alert last week for Health employers on the UK Shortage Occupation List changes and the new NHS surcharge, a number of key changes to the immigration rules came into effect on 6 April 2015.
The Construction (Design and Management) Regulations 2015 (SI 2015/51) (CDM 2015) come into force on 6 April 2015. CDM 2015 replaces the Construction (Design and Management) Regulations 2007 and significantly changes the old regime.
What Are The Changes?The CDM Regulations 2015 introduce important changes including:
Replacement of the CDM Co-ordinator RoleThe CDM Co-ordinator role is to be replaced by a new role of 'Principal Designer' which will include an element of influence over design. It is intended that the Principal Designer sits within the project team rather than being outsourced to an external consultant. Don't be surprised if a Principal Designer seeks higher fees than you are used to paying a CDM Co-ordinator, because of the changed role and also concern about how the HSE will interpret the role.
Increased Health and Safety Responsibilities for ClientsThe removal of the role of the CDM Co-ordinator will have an impact on the client who is losing his key advisor. Clients will be responsible for:
The following transitional arrangements have been put in place to run for six months from 6 April 2015 to 6 October 2015:-
Immediate considerationsWhere you have any design, construction or building works starting before 6 April 2015 you should consider the following:
The JCT have just issued Amendment 1 which should be incorporated when using their standard 2011 form of building contracts (available at JCT Amendment 1: CDM Regulations )
For further information, we attach the helpful guidance produced by the Construction Industry Training Board called Industry Guidance for Clients. Final guidance from HSE is expected to be made available on 6 April 2015.
In the courts' first scrutiny of the "new" payment regime under the updated Construction Act, the Technology and Construction Court ("TCC") held that the lack of a payment notice meant that the employer had agreed the value of the works claimed in the interim certificate. Employers must take note!
The FactsISG Construction Ltd (the contractor) and Seevic College (the employer) entered into a JCT Design and Build Contract, 2011 Edition. The parties agreed that the contractor's interim applications for payment would be made at monthly intervals.The contractor submitted interim application 13 for £1,097,696. The employer did not serve a payment or a pay less notice in response, but did not pay anything either.
The First and Second AdjudicationsThe contractor referred the dispute over interim application 13 to adjudication. The adjudicator (Mr Juniper) decided that the contractor was entitled to £1,097,696 plus interest.The employer served a second notice of adjudication, four days before the decision from the first adjudication. The employer asked the second adjudicator (also Mr Juniper) to value the contractor's works as at the date of interim application 13. The adjudicator decided the value of the works was £315,450. Assuming the employer had paid the sums awarded in the first adjudication, he awarded a repayment from the contractor to the employer of £768,525.DecisionThe TCC held that in the absence of a payment or pay less notice issued in time by the employer the contractor becomes entitled to the amount stated in the interim application irrespective of the value of the works actually carried out. As the first adjudicator had decided the sum claimed was the sum due to the contractor (and so had decided the value of the works), the second adjudicator was asked to decide the same dispute, which meant he lacked jurisdiction. The contractor's summary judgment application (in respect of the first adjudicator's decision) and the declaratory relief application (relating to the second adjudicator's decision) were both successful. CommentThis judgement reinforces the importance that employers or their advisers closely follow the payment requirements set out in the contract (or if such requirements do not exist to follow the requirements set out in the Act), especially if they disagree with the amounts sought in any payment notice.Had Seevic issued a Payment Notice disputing the sum claimed by ISG it may have been the case that Seevic would only have had to pay circa £300,000 to ISG. As it was, Seevic did not issue the requisite notice and, as a direct result, they had to pay the full amount to ISG as well as ISG’s costs of the application for summary judgment.An employer should always have in mind the dates by which Payment Notices and Pay Less Notices must be served to avoid being bound by the sum specified in the contractor’s application for payment.Prior to this decision, an adjudication brought by a contractor solely upon a technicality (e.g. failure to serve a notice) in many cases prompted the employer to launch an immediate counter-adjudication, seeking a valuation of the relevant application on its merits.The TCC felt that this practice completely undermined the Act's payment regime and has put a stop to it by finding that a failure to serve a pay less notice was an agreement by the employer of the value of the application.If the employer wishes to try to redress the position, it must now wait until the next interim application or final certificate. Of course, by that stage, the earlier adjudication award may have been enforced and the relevant monies paid out to the contractor.
Happy New Year to all our readers. We hope you enjoyed the festive break. 2015 is likely to be a busy year for HR professionals and employment lawyers: shared parental leave and pay becomes available on 5 April and a range of employment issues will be debated in the run up to the general election.
Welcome to the Fifth Edition of DAC Beachcroft's Adjudication Adviser.
In our last update we focussed on a number of Scottish decisions, not least as it appeared that enforcement proceedings were starting to slow down and the process being readily understood and accepted by parties. Since then there have been a number of decisions which have focussed on some very important aspects of adjudication and how the Housing Grants, Construction and Regeneration Act 1996 (as amended) should operate. Key issues which this updater focusses on; is how to ensure that the same dispute is not adjudicated twice and the application process.
I wish everyone a Merry Christmas and a prosperous New Year.
By way of a Judgment given on 3 December 2014 in ISG Construction Ltd v Seevic College  EWHC 4007 (TCC), the Court has underlined, if we did not already know, the importance of contractual payment notices.
Welcome to the First Edition of our Construction Professionals Newsletter. Articles in this edition:
In the period since our last Adviser, surprisingly, there have been few reported adjudication enforcement cases. This Adviser therefore looks outside of the jurisdiction of England and Wales to Scotland and Malaysia to see how our rules and case law have been adopted elsewhere.
Whilst it is not unusual for Scottish adjudication matters to refer to English cases, three recent Judgments show the extent that those Courts will look to uphold the right of adjudication. Notably these cases follow very closely to English precedent. It is arguable that this demonstrates that our system of adjudication appears to be working albeit, sometimes, in a rough and ready manner. Malaysia has become the latest jurisdiction following New Zealand, Singapore and a number of Australian states to adopt statutory adjudication as a dispute resolution method. One of articles provides a very brief review of the rules, which can be seen to be very similar to the UK.
For an aggrieved unsuccessful bidder, bringing a procurement challenge requires fast action in circumstances where the bidder may not be able to point to each and every breach of the Public Contracts Regulations 2006, and is often acting with little more than a feeling that something was not quite right with the process.
This month we've had a couple of helpful judgments concerning whistleblowing. Both look at the topic of whether an employee had been subjected to a detriment because they had blown the whistle. Both of the cases highlight that employment tribunals can and should make distinctions between alleged protected disclosures themselves and the steps taken by the employer to deal with the disclosures and/or to manage the employee who has made them.
Since our last update there have been a number of useful decisions providing guidance on the definitions found in the Housing Grants, Construction and Regeneration Act 1996 ("Construction Act") and how the Scheme for Construction Contracts ("Scheme") is to be interpreted. If nothing else this latest batch of cases illustrates the ways in which parties are continuing to seek to resist the enforcement of Decisions.
This edition reviews the Decisions that look at the procedural and technical aspects of adjudication.
Voluntary ex-ante transparency (VEAT) notices can offer a big reduction in the timing of risk exposure in procurements, however a recent Advocate General's opinion on their use of to avoid the remedy of ineffectiveness has clarified the circumstances in which they will and will not have their intended effect.
Case law keeps coming thick and fast and this month has been no exception. One of the many interesting cases in this alert concerns covert recordings made by an employee of the private deliberations at her grievance and disciplinary hearings. The EAT decided that the evidence was admissible.
A number of legislative changes were made to employment law on 6 April 2014. One of these, ACAS early conciliation (EC), may turn out be nothing more than an administrative hurdle for prospective claimants, but where ACAS do get involved in negotiations a late change to the legislation means that prospective claimants will have to fill in a separate EC form in respect of each potential respondent. This means that if individuals are named as potential respondents in, for example, potential discrimination claims these individual employees will be called by ACAS about whether the claim can be settled. This late change makes it all the more important that all organisations put in place a structure for dealing with early conciliation and let their employees know what to do if they are called by ACAS. All the April changes are outlined below.
Welcome to DAC Beachcroft's Budget 2014 Alert.
Our analysis as to how today's budget affects the business community is below. We think the three changes which will make the most amount of splash are the helpful relaxation and extension of the ISA rules, the temporary doubling of the annual investment allowance and what according to George Osborne is "the most far-reaching reform to the taxation of pensions since the regime was introduced in 1921".
In December last year, the government issued a consultation on zero hours employment contracts. The consultation followed months of political debate concerning the extent of their use and possible abuse by employers.
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