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Baroness Hamwee: I thank the Minister for his reply. I am still confused. An agreement is in writing if it is made in writing--that is subsection (2)(a). Then subsection (4) explains that an agreement is evidenced in writing--which is the third of the alternatives in subsection (2). If the agreement is made in writing but not signed, how is that different from it being evidenced in writing? Perhaps I am worrying unnecessarily and I certainly shall not push the point now.

Earl Ferrers: I believe the answer is that construction work is often started before all the documents are signed and sealed, even though they have been agreed. The builders come in and start the work and often the documents are signed later. The document, which has been agreed orally, should be part of the contract as though it were signed, even if it were signed later.

Baroness Hamwee: Through my professional work, though not much in the construction industry, I am familiar with people failing to sign contracts. My experience is that often they do not sign them because they have not quite agreed them. I see this as an area of considerable concern but I shall not press the point tonight. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 147 not moved.]

Lord Howie of Troon had given notice of his intention to move Amendment No. 148:


Page 60, line 17, after first ("in") insert ("adjudication or").

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The noble Lord said: I thank the Minister for his kindly attitude towards my Amendment No. 148. I hope that it is a portent of things to come, but I shall not move the amendment.

Earl Ferrers: It was also a reflection of Christmas past.

[Amendment No. 148 not moved.]

[Amendment No. 149 not moved.]

On Question, Whether Clause 104 shall stand part of the Bill?

Lord Williams of Elvel: I did not give notice of my intention to oppose the clause and I certainly do not oppose it. However, no doubt the noble Earl will be aware that Clause 104 is inappropriate for Scotland given the terms of the Requirements of Writing (Scotland) Act 1995. That is the view of the Law Society of Scotland and I am sure that that will be taken into account.

Earl Ferrers: I shall always take into account what the Law Society of Scotland says, even if it is mouthed through the words of the noble Lord, Lord Williams. I always take into account what he says and I shall see that the matter is investigated.

Clause 104 agreed to.

Clause 105 [Right to refer disputes to adjudication]:

Lord Williams of Elvel moved Amendment No. 150:


Page 60, line 25, leave out ("A") and insert ("Any").

The noble Lord said: I shall speak also to Amendment No. 151. The Committee will be aware that Clause 105 is one of the most contentious clauses in the Bill. It has given rise to a great deal of discussion and controversy. Taken together, Amendments Nos. 150 and 151 would have the effect of ensuring that any parties to the construction contract may opt for adjudication procedure to resolve a dispute.

Again, I must refer to the Law Society of Scotland. It believes that bestowing a right in Clause 105 to refer a dispute to adjudication procedure is illusory and that allowing a discretion to either party to opt for the procedure is more realistic. If there is a right on one side there must be an obligation on the other side. It is the view of the Law Society of Scotland that any party, including third parties, should be allowed to opt for the procedure. Amendment No. 151 is consequential.

I realise that the issue of rights and obligations to go to adjudication is a major issue. However, I put it forward because it comes from a source which I know the noble Earl respects. I hope that we shall have a proper debate on rights and obligations and not simply illusory rights. I beg to move.

Lord Lucas: It is our firm understanding of the words as they appear in the Bill that the amendments proposed by the noble Lord add nothing to the effect of the Bill. There should be no mistake about the access to adjudication being a right and no doubt that all parties to a construction contract should have the same right. We believe that the Bill has those effects.

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However, given the source of the noble Lord's arguments and the particular aspect of Scotland that he has introduced, we shall read the report of the debate in Hansard and consult again in order to see whether we remain firmly of our view that the two amendments are unnecessary. I hope that with that small assurance the noble Lord will feel able to withdraw his amendment at this stage.

Lord Williams of Elvel: I am grateful to the noble Lord. I believe that where a party to a construction contract has a right there must be an obligation on the other side to accept that that right can be enforced. That is the point which the Law Society of Scotland is making and I am grateful to the noble Lord for agreeing to reconsider the matter. We shall see what happens at a later stage of the Bill. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 151 not moved.]

Baroness Hamwee moved Amendment No. 152:


Page 60, line 26, leave out ("resolution") and insert ("decision").

The noble Baroness said: The amendment is tabled in order to query the use of the word "resolution" in the second line of Clause 105(1). Resolution suggests something that is final. This is a probing amendment to enable me and perhaps other Members of the Committee to understand whether what is intended is an interim or a final outcome.

I have used the word "decision" not believing that it is necessarily the happiest of terms but because it enables me to raise the issue. It does not appear to me that a final resolution is intended, given that adjudication is a mechanism for allowing everyone to get over the hiccup and get on with the job. If it is to be final it raises issues about enforcement which I do not follow. I beg to move.

Lord Williams of Elvel: It may be for the convenience of the Committee if in speaking to Amendment No. 152 I speak also to Amendment No. 159 standing in my name. I shall reveal that it comes from the Law Society of Scotland. It takes the view that the terms of Clause 132(2)(d) are too wide and that if not limited by the concept of relevancy they result in adjudicators exercising their powers to ascertain facts in too wide a fashion. That will result in cumbersome procedures. The amendment is therefore designed to focus the attention of adjudicators who initiate fact-finding exercises on the relevant facts. The amendment gives guidance on the scope of the fact-finding exercise.

Lord Berkeley: Amendment No. 152 goes to the heart of whether it is an interim or final resolution. That is why I have tabled Amendment No. 162A. Not being a lawyer, I do not know whether the word "resolution" is correct. I wonder whether the insertion of a word such as "interim" would help to clarify the sentence.

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6.30 p.m.

Lord Lucas: With these amendments, we are starting to move into the fundamentals of the adjudication process and how the adjudicator should operate. In Amendment No. 152, the noble Baroness, Lady Hamwee, is clearly worried about the word "resolution" and believes that it implies a permanent solution. I hope that I can reassure her and, indeed, the noble Lord, Lord Berkeley, about that.

It is quite clear from the wording of Clause 105 that adjudication must have force to resolve disputes. Nevertheless, parties would be free to agree whether it should be final and binding or effective for a more limited period. Parties might choose to allow the matter to be reopened by an arbitrator or in the courts at practical completion. We anticipate that in many cases they will do so.

Amendment No. 159, in the name of the noble Lord, Lord Williams of Elvel, is an attempt to restrict an adjudicator's right to ascertain the facts and the law. I cannot agree with him, and nor can my Scottish colleagues. An adjudicator should have access to legal or other expert advice and should not have to rely solely on the evidence offered to him by the parties if better evidence is available within the time available to him. There is no need to specify that the adjudicator should restrict himself to the "relevant" facts. We should leave it to the expert to decide what is relevant and what is not; to do otherwise could be a recipe for wrangling and delays. I am sorry if that is a disappointing reply for the noble Lord.

Baroness Hamwee: As the noble Lord has been speaking, I have realised that another factor which made me suggest the word "decision" is that that is the term used in Clause 105(2)(b). I shall read what the Minister said. I shall not pursue the matter. I appreciate that sometimes there are very fine differences between quite similar terms and, although fine, they may be important.

As I said in moving the amendment, I am by no means wedded to the words "decision" which in itself carries the problem to which the noble Lord, Lord Berkeley, referred. I shall read what the Minister said and in the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.


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