The adjudication process is being put under the spotlight as part of the government’s drive to improve the payment culture of the industry.
In a consultation paper on late payment published on December 7, the Department for Business, Innovation and Skills sets out a series of questions including “Are there simple steps that might be taken to make the construction adjudication process quicker, cheaper or both?”
The CIOB is urging members to send their responses to the Institute to help formulate a CIOB response to the questions to help tackle a chronic problem in the sector.
The consultation addresses legislative changes that can be made to improve payment practices and thus differs from the forthcoming voluntary Supply Chain Charter, which is currently being drawn up by the Institute of Credit Management for the Construction Leadership Council as part of the Industrial Strategy for construction. The charter was due to be launched in December 2013, but the BIS paper now refers to publication “in the New Year”.
Other key questions in the BIS discussion paper Building a Responsible Payment Culture include:
- What role, if any, could industry or sector bodies play in identifying and promulgating good contractual practices within their sectors and adjudicating on disagreements? Do you see particular sectors as priorities for action? How might government facilitate this?
- Do you think any specific change is needed to make suppliers more able to complain or charge interest in instances when they’re paid late on public sector contracts? What measures could government introduce to encourage this?
- Do you agree that more disclosure of company performance on supplier payment would be useful? If so, should this be voluntary or mandatory?
BIS says that the aim of this consultation is to ask what government, business and other stakeholders can do to build an environment where businesses treat their suppliers fairly, and accept as a matter of course their obligation to pay what they owe when they owe it, without over-burdensome enforcement.
The consultation paper also seems to suggest that the Construction Leadership Council’s efforts will not have the necessary teeth needed to bring about the change required in the industry.
The paper says: “The Construction Supply Chain Payment Charter deals with fair payment at a strategic level. It cannot be a substitute for effective dispute resolution, which is provided by a framework set out in the 2009 Construction Act. The Act was revised in 2009 following extensive consultation with the industry. These changes came into force in 2011 and it is too early to show an impact and so no further review is proposed at this stage. However, given the importance of dispute resolution, it does seem timely to ask whether there is more that might be done to further simplify the current adjudication process.”
The closing date for the consultation is 31 January 2014 and input should be sent to [email protected] by Tuesday 21 January.
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