constraints schedule of any activities being delayed. Do this until issues are resolved. The agenda and minutes of site meetings are very important factors, so make sure these are as detailed as possible. Record notification of delays, reasons for these delays and information on any other relevant matters.
Extension of time claims This is now an important feature on projects and it is critical that the proper notices are given on time, with the contractor and subcontractor recording and notifying the reason for delays, what has caused them and what needs to be done to prevent further delays occurring. Most of the claims I see in adjudication
are sadly lacking in detail and the claim is simply not substantiated. As a result, it gets rejected, so it is entirely in the hands of the contractor and the subcontractor to make sure that the relevant evidence is provided to an adjudicator. The same criticism applies to loss and expense claims and there are usually too many general headings without adequate substantiation. As a result, the claim is likely to receive a red pen.
Records, records, records If you end up in a dispute resolution process, then you will need to ensure that you have adequate records to support your position. Time and again contractors and subcontractors end up on the losing side of a dispute and are unable to prepare the information. I am a great believer that your internal procedures should ensure that these records have been kept and maintained. It can be helpful to agree the format and content of these records with the employer, or the contractor, during the delivery of the project, thus helping to avoid disputes. This can vary on a day-by-day basis – what resources are on site, what the resources are doing, all the resources being disrupted because of a lack of information or lack of access to a part of the project, or because other subcontractors are not performing etc. Take regular photographs of activities on site. I have seen video and even time-lapse cameras being used. Send the photos to your employer with a
Time to dump retentions The oldest chestnut in the construction industry has been a bane of the industry for over 40 years. Get rid of retentions. The industry has millions of pounds tied up in retentions and I have experienced a number of contractors who have a significant amount of money outstanding, and are having difficulty in collecting it – or are even forgetting to collect it. The Scottish Government is due to issue a consultation, and everyone knows the answer; they just need to bite the bullet and get rid of retentions once and for all. However, the industry also needs to respond by ensuring that defects are rectified quickly and at the end of the job we need to achieve a zero defects project. Once the industry focuses on that it will be easier for the public sector to support the complete abolition of retention.
Project bank accounts (PBAs) These are likely to feature much more in public sector contracts and hopefully in private sector contracts, too. The Scottish Government is to be commended for reducing the threshold for building works
to £2 million. However, I believe there should be no threshold, and that the introduction of PBAs will have a significant impact on cash flow which will be welcomed throughout the industry. PBAs cannot resolve disputes, but they
do allow main beneficiaries to be paid promptly once an agreement has been reached under the main contract. I suggest members read the Scottish
Government paper Implementing Project Bank Accounts in Construction Contracts, dated 3 April 2019. There is also information on PBAs on the SELECT website. Both Alan Wilson, Managing Director of SELECT, and Rudi Klein, from the SEC Group, are to be commended for their energy and drive to see PBAs implemented in Scotland.
Adjudication? If you accept my view that this is now becoming an endangered species, then what is the solution if somebody has not been paid on time? The answer lies in the introduction into contracts of a Conflict Avoidance Process (CAP).
This calls in a third-party to consider what the issues are and to issue a non-binding recommendation for resolution. In many instances that individual can be the catalyst for the employer and the contractor to get around the table to find a solution themselves. It seems to me to be such a sensible process to adopt and it is significantly cheaper than commencing adjudication proceedings. This CAP has already been used successfully in London with projects for TfL, and there is a growing interest from the public sector in Scotland in introducing a process like this. For any member organisation interested, I would be happy to provide further information, and this is one topic that we will be highlighting in the forthcoming seminars I have mentioned above.
Conclusion
The main objective of SECG Scotland’s recent commercial seminars is improving the commercial management of construction projects for organisations involved in SECG. I’ve also tried to give a few pointers on avoiding disputes, and I hope you’ll take on board the suggestions and support the initiatives outlined.
CABLEtalk OCTOBER/NOVEMBER 2019 59
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