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Lord Williams of Elvel: I support my noble friend Lord Howie of Troon in his amendments. My noble friend rightly said that this issue goes to the heart of Clause 105. As I said when introducing an earlier amendment, it is possibly one of the most important clauses in the Bill and has, indeed, caused a great deal of worry, confusion and debate. I hope very much that the Government will understand and take advantage of the debate in Committee this evening. I hope they appreciate that we are not happy with the way the Bill is drafted. Indeed, as the noble Lord, Lord Rodgers of Quarry Bank, said, something seems to have been lost in translation between the Latham Report and the Bill as drafted. I hope that the Government will give comfort to my noble friend by accepting his amendments or at least the thrust of them.

Lord Lucas: I am very happy to make clear to the Committee that we are discussing adjudication and not arbitration. We are discussing what is in the Bill, not what is in the scheme. As my noble friend Lord Ullswater so clearly pointed out, the two are different. The Bill is a flexible, wide ranging and simple provision whereas the scheme is a fallback which is a good deal tougher than the terms which two parties might well agree upon had they the good sense to sit down and write their own contract rather than relying upon what is a fallback and designed to be so.

Amendments Nos. 153, 158 and 162 cover a number of complex issues, and it may help if I start with the easier points. First, my noble friend Lord Ferrers has already tabled an amendment, Amendment No. 156, to increase the time-limit for adjudication and to allow an extension by the parties. We are not prepared to increase it outright to the 63 days suggested by the noble Lord, Lord Howie of Troon, in Amendment No. 158 since that would be far too lax for the vast majority of disputes, but I believe that the right to extend will allow parties to set sensible deadlines where it would be in no one's interest to insist on an inadequate period.

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Secondly, Amendment No. 162 proposed by the noble Baroness, Lady Hamwee, has picked up concerns that the adjudicator should be granted immunity lest it prove too difficult to get someone competent to act in a costly dispute. We accept the principle of this but the wording of such a provision needs careful consideration. If the noble Baroness will withdraw this amendment, we will aim to bring forward a suitable amendment as soon as possible.

Next, it is our intention that any award made by an adjudicator should be paid promptly, and we will reflect upon the need for the provision proposed by the noble Lord, Lord Howie of Troon, in Amendment No. 158 to ensure payment within seven days.

However, there is no need for Amendment No. 153 to insist in primary legislation that parties must "submit" to adjudication or that the award should be implemented or made "binding". I have already pointed out in discussing Amendment No. 152 that adjudication must have force to resolve disputes. If an adjudication procedure is not intended to resolve the disputes which are referred to it and does not require parties to submit to the process and act upon its outcome, it will be defective under the terms of that clause.

As far as the adjudicator and his powers are concerned, I do not believe it is necessary to specify that he should in all cases be independent. There may be times, for example, when parties wish to use someone connected with the project as an adjudicator. It is enough that he should act impartially--though of course he must be seen to do so.

Similarly, I do not agree with the provision in Amendment No. 158 to restrict an adjudicator's right to ascertain the facts and the law. As I have already pointed out on Amendment No. 159, he 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.

Perhaps I may give comfort to the noble Lord, Lord Berkeley. Any party to a dispute has a right to start adjudication and that adjudication is something which other parties to the dispute must enter into.

I hope that I have said enough to convince the noble Lord, Lord Howie, and the noble Baroness, Lady Hamwee, that, to the extent to which I promised to come back with alternatives to the provisions they have suggested, we will do so and that my arguments for not doing so on the other parts of their amendments are sufficient to enable them to withdraw them.

Lord Howie of Troon: I have been called many things in my day but I think this is the first time I have ever been called a noble Baroness. I do not know what has happened in the course of this long debate, but I had not noticed and I hope it does not show. Amendment No. 162 was put down by me. I cannot remember what the noble Lord said about it, but I hope he agreed with it.

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I should like to go back to Amendment No. 153. I thought we had agreed earlier when we were discussing Amendments Nos. 150 and 151 that rights went hand in hand with obligations. Did we not take a view along those lines? I think we did. That is all I am saying in Amendment No. 153. I am merely putting into the Bill the obligation which the noble Lord, Lord Lucas, seems to find implicit in it, though I do not myself find it implicit. I would rather see it made totally explicit. I think he has misunderstood my amendment in the same way as he had some trouble with my gender.

Turning to Amendment No. 158, there is something in what the noble Lord says about the adjudicator not being required to be independent. That was in fact often the case where the adjudicator was the engineer or the architect: he would have a contractual arrangement with the employer and would therefore be thought by some not to be independent but in fact his professional obligations made him independent. I shall study what the noble Lord said about that.

I was confused, too, by what the noble Lord said about the adjudicator and the law. I think he said something about the adjudicator being able to obtain what advice he could in the course of his investigations. The noble Lord will correct me if I am mistaken. That is, in fact, what I am asking for. I am asking that the adjudicator should take the initiative in investigating matters: that is, he should ask for advice. I am not suggesting that he should become some kind of a detective. I am not using the word "investigating" in that sense.

I shall need to read very carefully in Hansard what the noble Lord said in the course of his reply to this debate. In the meantime, I beg leave to withdraw Amendment No. 153.

Amendment, by leave, withdrawn.

Lord Howie of Troon moved Amendment No. 153A:


Page 60, line 28, at end insert ("but excludes any dispute or difference involving allegations of a breach of professional duty").

The noble Lord said: This amendment does not intend in any way to condone professional negligence or breach of professional duty; it is merely to say that a dispute of that nature is quite different from the kind of dispute about contractual procedures which we seem to be discussing in the course of this Bill. However, the Bill uses the words "any dispute" and it might be construed that such a clause would provide or imply that a dispute or difference about professional negligence should go to adjudication. Such a dispute should obviously go to some kind of investigation, but I do not think it can be under the adjudication procedure laid down in this Bill because, by the very nature of things, an investigation into professional negligence or breach of professional duty is complicated and time-consuming and could not be done within the timescale indicated in the Bill. I beg to move.

Viscount Ullswater: If there is a concern about the jurisdiction of the adjudicator, I would prefer all disputes to be subject to adjudication procedure rather than have endless debates about whether a dispute is within the

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jurisdiction of the adjudicator or not. I think we shall be straying into that territory if we support the amendment proposed by the noble Lord, Lord Howie of Troon.

Lord Berkeley: It is difficult to disagree with my noble friend Lord Howie because we are both civil engineers, but I wonder whether the proposal to exclude engineers from breaches of professional duty is not likely to work against them as well as for them. I believe we have heard that this is an interim solution. There may be occasions when the engineers are waiting for payment until this professional negligence dispute is resolved. Is there any reason why they should not go to adjudication to obtain a quick resolution, and then be able to take it further to arbitration, if that is necessary, as for the other types of contract that we are discussing?

7 p.m.

Lord Lucas: I am grateful for the support expressed by the noble Lord, Lord Berkeley, in this civil dispute between civil engineers. I have absolutely no reason to doubt the gender of the noble Lord, Lord Howie of Troon. I am sorry that I expressed myself in a way that led him to think that I had.

Amendment No. 153A raises a specific point. It arises from the concerns of some construction professionals that disputes involving allegations of professional negligence could be handled by an adjudicator who was unqualified in the specialty involved. My first concern is that such an amendment could rule out an unacceptably large proportion of construction disputes, since a great many could involve some sort of breach of professional duty. There would also be considerable problems in defining what was meant by a "breach of professional duty". At the very least such an amendment would leave it to a variety of professional bodies to determine the application of primary legislation.

I am also concerned that this amendment could actually increase the number of allegations of professional negligence: any party who wished to avoid the process of adjudication could simply throw in some such claim to scupper it. Not only would this make it all too easy to opt out but it would also tend to increase the cost of professional indemnity insurance. In addition, the adjudicator's powers would be far from clear with such an amendment in place. Granted that he could not act in a dispute where a breach of professional duty had been alleged, how should he behave if he nonetheless uncovered evidence of such a breach--even if no allegation had been made? He could find himself in a legal minefield.

The way round these difficulties, and one that is already available under the provisions as drafted, is for parties to agree that an adjudicator's decision should have only temporary effect, so that any findings of professional negligence may be re-opened in the courts once the work is finished. I believe that is what the noble Lord, Lord Berkeley, was suggesting. In addition, the scheme for construction contracts will make it clear that an adjudicator may decline to decide a matter which is unsuited to the procedure of adjudication. Contractual agreements may

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include a similar provision. I hope with those few comments the noble Lord will feel able to withdraw his amendment.


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