Insolvency and resolution of construction contract disputes by adjudication in the UK construction industry
Cast your vote
You can rate an item by clicking the amount of stars they wish to award to this item.
When enough users have cast their vote on this item, the average rating will also be shown.
Your vote was cast
Thank you for your feedback
Thank you for your feedback
MetadataShow full item record
AbstractThe Housing Grants, Construction and Regeneration Act 1996 provides that a party to a construction contract has a right, at any time, to refer any dispute under the contract for adjudication. This resolution method requires a neutral third party, the adjudicator, to determine the dispute within 28 days after receipt of the referral regardless of the complexity of the issues in dispute. The decision is to be implemented even if it is palpably wrong in fact or law. A key assumption of this legislation is that any mistakes made by an adjudicator can be corrected by reference of the same to litigation or arbitration. It is a major concern that restoration of the parties to their correct positions may become impossible where, after implementation of an adjudicator's mistaken decision, the beneficiary of the decision becomes insolvent. This article is a critical review of all the cases in which the courts have dealt with the effect of insolvency on the right to adjudicate and the enforceability of adjudicators' decisions. Two main conclusions are derived from the review. First, the court may decline to enforce an adjudicator's payment decision where there is strong evidence that, on account of formal insolvency, the payee would be unable to make repayment if final resolution of the dispute necessitates it. Second, the only exception so far to the general right to refer to adjudication arises where the other party is in administration. (Taylor & Francis)
CitationConstruction Management and Economics, 23(4): 399-408
PublisherTaylor & Francis
JournalConstruction Management and Economics
DescriptionThis study was carried out in collaboration with Fenwick Elliott, an international construction law practice.
Showing items related by title, author, creator and subject.
AN INVESTIGATION INTO THE IMPLEMENTATION OF THE CONSTRUCTION (DESIGN AND MANAGEMENT) REGULATIONS IN THE CONSTRUCTION INDUSTRYMzyece, Dingayo (2015-01)The European Union (EU), in 1992, issued the Temporary or Mobile Construction Sites (TMCS) Directive, which requires EU members to introduce specific law to improve health and safety (H&S) performance outcomes by placing specific duties on key stakeholders. This Directive led to the introduction of the first Construction (Design and Management) (CDM) Regulations in the UK construction industry on 31 March 1995 and since their introduction, the overall performance of construction H&S has improved gradually. However, despite this positive outlook, there are still significant concerns surrounding the implementation of the CDM Regulations, a subject on which empirical research has been very scanty. It is against such a background that this study investigates the practical implementation of the CDM Regulations and extends current knowledge and understanding, and develops a framework for appropriate remedial action by industry. The research method involved a thorough critical review of literature, semi-structured interviews, and two postal questionnaire surveys, using as research informants, practitioners with experience of the Designer, CDM Coordinator (CDM-C), and Principal Contractor (PC) roles under the CDM Regulations. Primary data were collected and analysed from in-depth interviews with six organisations purposively selected based on their construction design expertise and 122 questionnaires returned in total. The finding regarding lack of collaborative working amongst duty holders is a significant outcome of this study; a requirement expressed explicitly within the CDM Regulations, yet questionable in terms of its implementation. Further, the study reveals a number of statistically significant correlations between the extent of discharge of duties and their perceived degree of importance. However, the strength of the majority of these correlations is weak. In particular, the evidence indicates that 50% of the duties of the CDM-C are misaligned in terms of extent of discharge and perceived degree of importance, whereas 25% of the PC duties are also misaligned. This signals a lack of understanding regarding the importance of duties, towards achieving improved H&S management. Surprisingly, a comparison between extent of discharge of duties and their perceived degree of difficulty reveals that all the duties of the PC are statistically significant, meaning that the perceived degree of difficulty does not impede their extent of discharge. While 90% of the CDM-C duties are also statistically significant, again the same interpretation applies. Further, a consensus reached by Designers supports the view that CDM-Cs provide insufficient input throughout the planning and construction phase, raising doubt as to whether the duty holder is fit for purpose. Overall, the results confirm that interdependent working of duty holders is still a challenge, demonstrated by the Designer duty to ensure appointment of the CDM-C (Regulation 18(1)), the CDM-C duty to ensure Designers comply with their duties (Regulation 20(2)(c)), and the PC duty to liaise with the CDM-C and Designer (Regulation 22(1)(b)). Three recurring themes emerge from the results, that is: (i) collaboration, (ii) accountability and compliance, and (iii) facilitation, which in turn inform the remedial action framework comprising 13 remedial actions and 8 change drivers. Validation of the remedial action framework by 15 study participants reveals that, at least 10 remedial actions and 7 change drivers are considered likely to improve CDM implementation. The top three remedial actions are: (i) ensuring adequate arrangements for coordination of H&S measures; (ii) including provisions within the regulations specifying the stages for the appointment of duty holders; and (iii) amending the ACoP to provide guidance on determining what resources are adequate for a particular project. Whereas, the top three change drivers are: (i) management leadership; (ii) the proactive participation of duty holders; and (iii) training to equip duty holders with sufficient knowledge on provision of timely and adequate preconstruction information. Based on these outcomes, conclusions, recommendations, and further areas of research are drawn.
Improving construction management practice in the Gibraltar construction industryDaniel, Emmanuel I.; Garcia, Daniel; Marasini, Ramesh; Kolo, Shaba; Oshodi, Olalekan; Pasquire, Christine; Hamzeh, Farook (Annual Conference of the International. Group for Lean Construction (IGLC), 2019-07-03)Research has shown that 57% of activities in a construction project is non-value adding (waste) which contributes to the poor performance of the sector. While other countries of the world such the USA, UK, Brazil, Nigeria and Israel among others are seeking to understand this challenge and deploy innovative ways and modern techniques to improve it, limited studies have explored factors that contribute to non-value adding activities (NVA) in the Gibraltar construction industry. The current study aims to identify the factors that contribute to NVA on construction sites in Gibraltar and to present an outlook on how this could be minimised using Last Planner System(LPS). A combination of quantative and qualitative research approaches were used. Thirtyone questionnaire responses were analysed and seven semi-structured interviews were conducted. The investigation reveals that the development of unrealistic schedules, lack of adequate training, delayed approval process and work interruption due to the community are the key factors that contribute to NVA. The study found that the suggestions offered by construction professional for minimising NVA align with some LPS principles. The study concludes that some of the current practices, could serve as justification for the introduction of LPS in the construction sector of Gibraltar.
IGR Report: The Virtual Construction Site: A Decision Support System for Construction Planning (Award Numbers GR/N 00890; 00876; 00906)Dawood, N.; Heesom, David; Winch, G.; Penn, A. (EPSRC (Engineering and Physical Sciences Research Council), 2002)The software was a direct outcome of the collaborative EPSRC 'Virtual Construction Site - VirCon' project involving UCL, UMIST, Teesside and Wolverhampton Universities and several industrial collaborators. The software provides a platform for current research and knowledge transfer activities through the West Midlands Centre for Construction Excellence and has directly informed the development of the '3-Centre' collaborative visualisation system which provides support to numerous construction companies.