https://www.designingbuildings.co.uk/w/index.php?feed=atom&target=Robert_Fenwick_Elliott&title=Special%3AContributions%2FRobert_Fenwick_Elliott 2026-05-20T06:32:00Z From Designing Buildings MediaWiki 1.17.4 https://www.designingbuildings.co.uk/wiki/Aspect_Contracts_(Asbestos)_v_Higgins_Construction_2015 2016-03-02T09:33:16Z

<p>Robert Fenwick Elliott: </p> <hr /> <div>The decision of the UK Supreme Court in Aspect Contracts (Asbestos) v Higgins Construction [2015] UKSC 38 might provide a good reason for adjudication losers who paid up on an adjudication determination in late 2009, or where it is coming up for 6 years since a payment was made pursuant to an adjudication determination, to think about dusting off their files.<br /> <br /> All around the world, adjudication is intended as a ‘pay now, argue later’ scheme. If the adjudicator finds for a claimant, then the respondent has to pay up, but without prejudice to the respondent’s right to reclaim that amount in subsequent litigation or arbitration. But what is the basis of that right to reclaim?<br /> <br /> During the currency of most formal building contracts, there is a contractual answer to be found in the final account provisions. After the contract work has been completed, these final account provisions typically require a calculation to be made of the amount eventually due under the contract. All the amounts that have been paid up to that point are taken into account, and the balance is paid – or repaid – as the case may be. If the contractor has been paid more than they are entitled to, then the express terms of the contract provide a route whereby the principal gets the excess back.<br /> <br /> In the absence of a final account provision, the right of the principal to recover any overpayment is much more problematic. There are certain circumstances where the principal might have a right of recovery in restitution, i.e. for money had and received, particularly where the money has been paid pursuant to a relevant mistake. It might be possible, for example, for the principal to demonstrate a relevant mistake if the contractor has defrauded them by misrepresenting the work that they have done. More rarely, the principal might be able to demonstrate that they have paid as a result of duress; again, that duress would enliven a right of recovery in restitution. In the even more improbable case that the contractor has done no work at all, the right of recovery would be enlivened by a total failure of consideration. These categories are conveniently summarised at Vol 88 Para 405 of Halsbury’s Laws of England:<br /> <br /> {|<br /> |Money had and received: An action for money had and received is an action used by claimants who are, for example, seeking to recover from the defendant money which has been paid to the defendant: (1) by mistake; (2) upon a consideration which has totally failed; (3) as a result of imposition, extortion or oppression; or (4) as the result of an undue advantage which has been taken of the claimant’s situation, contrary to the laws made for the protection of persons under those circumstances.<br /> |}<br /> <br /> What about adjudication? If money has been paid pursuant to an adjudicator’s determination, can the respondent principal recover the money that they have paid in restitution?<br /> <br /> This was the issue under consideration in Aspect v Higgins. As in so many of these cases, the issue arose not between principal and head contractor, but between head contractor (Aspect) and subcontractor (Higgins). In 2009, after a fairly lengthy period of negotiation and mediation which failed to achieve a result, Higgins obtained an adjudication determination for £490,627 plus interest and fees, which was somewhat more than half of the amount that Higgins had been claiming. Evidently content to leave it at that, Higgins did not issue proceedings claiming the balance of the amount that it claimed.<br /> <br /> Instead, in 2012, Aspect issued proceedings seeking recovery of the amount that it had paid pursuant to the 2009 adjudication. It hedged its bets, making its claim both on the basis of an implied term, alternatively restitution. The implied term that it sought was as follows:<br /> <br /> {|<br /> |in the event that a dispute between the parties was referred to adjudication pursuant to the Scheme and one party paid money to the other in compliance with the adjudicator’s decision made pursuant to the Scheme, that party remained entitled to have the decision finally determined by legal proceedings and, if or to the extent that the dispute was finally determined in its favour, to have that money repaid to it.<br /> |}<br /> <br /> At first instance, Akenhead J found that there was no such implied term. He said that Aspect could have applied for a declaration as to what the true entitlement was under the subcontract, and if this declaration had been granted in its favour, the court would have had an ancillary and consequential power to order repayment, but it was too late for that because such a claim would have been statute barred. He also found that in the absence of any mistake, duress etc. could be no claim in restitution.<br /> <br /> Note that the conclusion in respect of restitution was not in line with the approach in Australia.<br /> <br /> Aspect successfully appealed to the Court of Appeal, which found that there was such a term to be implied by the adjudication legislation into the contract. Perhaps pessimistic of its prospects, Aspect did not pursue its appeal in respect of the finding that there was no right to restitution.<br /> <br /> Higgins appealed to the Supreme Court, which found not only that there is indeed such an implied term, but also that there is a right to recovery in restitution. This finding has important notifications, both in terms of interest and in setting up a ‘one-way throw’. But first, the basis of the decision.<br /> <br /> The court’s starting point was that there plainly had to be a right of recovery of an excessive adjudication determination, because otherwise the legislation makes no sense. It considered first whether an action for a declaration provided a sufficient route for recovery. It said that there was no doubt that Aspect could have sought a declaration, but on the basis of the majority judgments in Guaranty Trust Company of New York v Hannay [1915] 2K be 536, the courts’ power to grant consequential relief as an ancillary to such a declaration was dependent upon their being a cause of action to support that consequential relief.<br /> <br /> So where was the cause of action? The court’s answer was that it lay both in implied term and in restitution:<br /> <br /> {|<br /> |I emphasise that, on whatever basis the right arises, the same restitutionary considerations underlie it. If and to the extent that the basis on which the payment was made falls away as a result of the court’s determination, an overpayment is, retrospectively, established. Either by contractual implication or, if not, then by virtue of an independent restitutionary obligation, repayment must to that extent be required. The suggested implication, on which the preliminary issue focuses, goes to repayment of the sum (over)paid…<br /> |}<br /> <br /> Why did the court deal with the restitution issue, which had not been before the Court of Appeal, if the implied term would have been sufficient to dispose of the matter? The answer, it seems, was interest: there might have been some doubt as to whether interest would have been payable on a bare implied term case, there was no doubt of the courts power to order interest when making an order for restitution:<br /> <br /> {|<br /> |…But it seems inconceivable that any such repayment should be made – in a case such as the present, years later – without the payee having also in the meanwhile a potential liability to pay interest at an appropriate rate, to be fixed by the court, if not agreed between the parties. In restitution, there would be no doubt about this potential liability, reflecting the time cost of the payment to the payer and the benefit to the payee: see eg Sempra Metals Ltd v Inland Revenue Commissioners [2007] UKHL 34, [2008] AC 561. Whether by way of further implication or to give effect to an additional restitutionary right existing independently as a matter of law, the court must have power to order the payee to pay appropriate interest in respect of the overpayment. This conclusion follows from the fact that, once it is determined by a court or arbitration tribunal that an adjudicator’s decision involved the payment of more than was actually due in accordance with the parties’ substantive rights, the adjudicator’s decision ceases, retrospectively, to bind.<br /> |}<br /> <br /> This set up what Higgins described as a ‘one-way throw’, because of the limitation position. Aspect had brought its action less than 6 years since the payment had been made, but it was more than 6 years since the contractual events, such that Higgins was statute barred from pursuing the balance of its claim. Higgins said that it was unfair that Aspect should be free to assert the adjudication determination was for too much, and to claim repayment of the excess, without Higgins being able to assert that the adjudication determination was for too little, and to claim the balance.<br /> <br /> The Supreme Court said ‘tough’; this consequence followed…<br /> <br /> {|<br /> |…from Higgins’s own decision not to commence legal proceedings within six years from April 2004 or early 2005 and so itself to take the risk of not confirming (and to forego the possibility of improving upon) the adjudication award it had received. Adjudication was conceived, as I have stated, as a provisional mechanism, pending a final determination of the dispute. Understandable though it is that Higgins should wish matters to lie as they are following the adjudication decision, Higgins could not ensure that matters would so lie, or therefore that there would be finality, without either pursuing legal or arbitral proceedings to a conclusion or obtaining Aspect’s agreement.<br /> |}<br /> <br /> This result did not mean, of course, that Aspect was automatically entitled to recovery; it still had to demonstrate to the court that the adjudicator’s determination was excessive:<br /> <br /> {|<br /> |The Scheme cannot plausibly mean that, by waiting until after the expiry of the limitation period for pursuit of the original contractual or tortious claim by Higgins, Aspect could automatically acquire a right to recover any sum it had paid under the adjudicator’s award, without the court or arbitration tribunal having to consider the substantive merits of the original dispute, to which the adjudicator’s decision was directed, at all. If and so far as the adjudicator correctly evaluated a sum as due between the parties, such sum was both due and settled.<br /> |}<br /> <br /> And for the purpose of that subsequent consideration by the court or arbitration tribunal, Higgins was not to be confined to the material that was before the adjudicator:<br /> <br /> {|<br /> |One further point requires stating. In finally determining the dispute between Aspect and Higgins, for the purpose of deciding whether Higgins should repay all or any part of the £658,017 received, the court must be able to look at the whole dispute. Higgins will not be confined to the points which the adjudicator in his or her reasons decided in its favour. It will be able to rely on all Aspects of its claim for £822,482 plus interest. That follows from the fact that the adjudicator’s actual reasoning has no legal or evidential weight. All that matters is that a payment was ordered and made, the justification for which can and must now be determined finally by the court. Similarly, if Aspect’s answer to Higgins’s claim to the £490,627 plus interest ordered to be paid had been not a pure denial of any entitlement, but a true defence based on set-off which the adjudicator had rejected, Aspect could now ask the court to re-consider and determine the justification for that defence on its merits.<br /> |}<br /> <br /> In other words, the effect of Aspect waiting until the original contract limitation period had expired before seeking repayment was that Higgins could argue the whole of its case, but only for the purpose of disposing of the repayment claim, and if the court or arbitrator eventually found that the adjudication determination was for too little, there would be no scope for a top up.<br /> <br /> So the moral is that, for a party who has paid up on an unwelcome adjudication decision, a good time to seek repayment might well be after the contract limitation period has expired, but within the limitation period of 6 years from the payment under the adjudication.<br /> <br /> Coincidentally, it was only a couple of days after the judgment in Aspect v Higgins that the Supreme Court of Queensland considered the restitution issue in Gambaro v Rohrig [2015] QSC 170 (19 June 2015). The argument in that case had, of course, taken place before the Aspect v Higgins decision, and in any event, Atkinson’s J finding that there is a right of restitution in these circumstances was founded on the express wording of the East Coast model legislation (which expressly provides for a statutory right to restitution in subsequent litigation or arbitration), and the authority of Falgat Constructions Pty Ltd v Equity Australia Corporation Pty Ltd [1], in which Handley JA held in relation to s 32 of the Building and Construction Industry Security of Payment Act 1999 (NSW) that:<br /> <br /> {|<br /> |A builder can pursue a claim in the courts although it was rejected by the adjudicator and the proprietor may challenge the builder’s right to the amount awarded by the adjudicator and obtain restitution of any amount it has overpaid. [2]<br /> |}<br /> <br /> It might accordingly have looked like a foregone conclusion that the court would decline to strike out the principal’s claim for repayment. But it had to consider the basis of Rohrig’s attack, which was that the claim for restitution was premature, since the principal had not waited until the completion of the construction contract, but had launched the proceedings for restitution more or less straightaway after they had paid the adjudicator’s determination. Rohrig relied on the ‘no contracting out’ provisions of the legislation in support of its argument that the contractual regime for interim payments had to yield to the statutory rights to interim payment during the currency of the contract. But Atkinson J was having none of this, finding that the principal was entitled to make their claim for repayment straightaway.<br /> <br /> And also, following the same approach as Aspect v Higgins, the court refused to give summary judgment; they would have to prove that the adjudicator’s determination was excessive the hard way.<br /> <br /> This is not to say, however, that the Australian position is precisely the same as the position in the United Kingdom. The UK position, as under the West Coast model in Australia, is that the adjudicator is making a determination of what is due under the contract. Under the East Coast model, in contrast, the legislation sets up a parallel right to a statutory payment which sits alongside the contractual right, and it is by no means clear that these rights are identical. On the contrary, it is clear that in some respects (such as in the instance of the right to set off for defective work) the rights are not identical. And so, in a claim like Gambaro, where the loser is seeking repayment, what is the measure against which the adjudicator’s determination is to be measured? Is it the entitlement under the contract, or is it the statutory right to payment? The courts have spoken more than once about the unsatisfactory position which obtains if and to the extent that these rights are out of step, but that observation does not of itself resolve the question.<br /> <br /> Let’s look at the relevant section. Since I live in South Australia, I will give section 32 of the Building and Construction Industry Security of Payment Act 2009 (SA):<br /> <br /> {|<br /> |width=&quot;100%&quot;|32—Effect of Part on civil proceedings<br /> (1) Subject to section 33[3], nothing in this Part affects any right that a party to a construction contract—<br /> <br /> * (a) may have under the contract; or<br /> * (b) may have under Part 2 in respect of the contract; or<br /> * (c) may have apart from this Act in respect of anything done or omitted to be done under the contract.<br /> <br /> (2) Nothing done under or for the purposes of this Part affects any civil proceedings arising under a construction contract, whether under this Part or otherwise, except as provided by subsection (3).<br /> <br /> (3) In proceedings before a court or tribunal in relation to a matter arising under a construction contract, the court or tribunal—<br /> <br /> * (a) must allow for an amount paid to a party to the contract under or for the purposes of this Part in any order or award it makes in those proceedings; and<br /> * (b) may make such orders as it considers appropriate for the restitution of any amount so paid, and such other orders as it considers appropriate, having regard to its decision in those proceedings.<br /> |}<br /> <br /> Note that subsection 3 (b) does not tie the courts hands as to what might be considered appropriate. Presumably, it will be appropriate to order statutory restitution under this subsection whenever any amount paid pursuant to the statutory right to interim payment exceeds the contractual right to payment. Section 3 (a) requires the court or arbitrator to take into account any amounts paid pursuant to an adjudication determination, but that does not really answer the question as to what happens in an Aspect v Higgins situation. Suppose that all the rights under the construction contract itself have become statute barred. What is to stop the principal from making a claim for equitable restitution (not statutory restitution under section 32 (3) (b))? Presumably, the principal will be entitled to their ‘one-way throw’, just as in the Aspect v Higgins case.<br /> <br /> Which might be quite good reason why, in Australia as in the UK, quite a good time to challenge an adjudication determination is after the contractual limitation periods have expired, but prior to 6 years from the date of payment of the adjudication determination. Assuming, of course, that the Australian courts would follow Aspect v Higgins in finding that there is an equitable right to restitution for overpayment in the circumstances.<br /> <br /> The Gambaro case also provides interesting food for thought for those who have pondered how to effectively circumvent the East Coast model legislation. We know that full frontal attacks do not work; they fall foul of the ‘no contracting out’ provisions. A smarter approach might be to provide for a fast track arbitration procedure whereby determinations of adjudicators might be subject to extremely prompt review. The somewhat bizarre consequence of such an approach would be that, as soon as adjudicators award money in favour of contractors pursuant to the statutory right to interim payment, fast track arbitrators would be awarding repayment of that money pursuant to the contractual regime for interim payment. Would such a scheme offend against the contracting out provisions? Applying Atkinson J’s judgment, it seems not:<br /> <br /> {|<br /> |width=&quot;100%&quot;|There has been no attempt to contract out of the provisions of BCIPA[4] by the parties. Rohrig exercised its contractual rights by its progress claims and Gambaro complied with its contractual obligations by paying them as assessed by the superintendent. Rohrig also exercised its statutory right to make a payment claim under BCIPA and to refer the unsatisfied part of that claim to adjudication. Gambaro complied with its statutory duty by paying the adjudicated amount.<br /> Once the rights under Parts 2 and 3 have been exercised, BCIPA does not seek to exclude the parties from enforcing their rights by civil litigation…<br /> <br /> The enforcement of contractual rights by civil litigation may give rise to a requirement on one party under s 100(3)(a) to make an additional payment to that paid under Part 3, or it may give rise to a requirement under s 100(3)(b) for the other party to repay some or all of the payments made under Part 3. There is no other express limitation upon the rights recognised by s 100, nor is there any justification for implying any limitation on the rights so recognised.<br /> <br /> There is no reason why a purposive[5] rather than a literal reading of s 100 would lead to any different result. The purpose of Part 3 is to provide a quick method for the amount of disputed payment claim being determined and then paid. This ensures cash-flow to the builder.[6] However, it is not intended to exclude the parties’ rights to litigate in a Court to determine their rights inter se, so long as amounts paid under Part 3 are taken into account. Nothing in s 100 or in the objects of BCIPA mandates that this may only happen on completion of the construction contract. The defendant’s argument as to striking out the whole of the plaintiff’s Claim and Statement of Claim must fail.<br /> |}<br /> <br /> So the moral might be that the best time to seek repayment of an amount paid pursuant to an excessive adjudication determination is either very quickly, or very slowly.<br /> <br /> -----<br /> This article originally appeared as [https://feconslaw.wordpress.com/2015/08/03/now-we-are-six/ Now We are Six] in August 2015.<br /> <br /> It was written by --[[User:Robert Fenwick Elliott|Robert Fenwick Elliott]] 09:33, 02 Mar 2016 (BST)<br /> <br /> -----<br /> == References ==<br /> <br /> * [1] [2005] NSWCA 49.<br /> * [2] At [21].<br /> * [3] The “no contracting out” section.<br /> * [4] Building and Construction Industry Payments Act 2004 (Qld)<br /> * [5] See Acts Interpretation Act 1954 s 14A; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [69].<br /> * [6] R J Neller Building Pty Ltd v Ainsworth [2009] 1 Qd R 390 at [40]; Capricorn Quarries Pty Ltd v Inline Communication Construction Pty Ltd [2012] QSC 388 at [41].<br /> <br /> [[Category:Projects_and_case_studies]] [[Category:DCN_Project_Knowledge]]</div>

Robert Fenwick Elliott https://www.designingbuildings.co.uk/wiki/User:Robert_Fenwick_Elliott 2016-03-02T09:31:28Z

<p>Robert Fenwick Elliott: </p> <hr /> <div>[[File:Keating_2015.jpg|200px|link=File:Keating_2015.jpg]]<br /> <br /> I am Robert Fenwick Elliott, a construction and energy lawyer now practising as a barrister. I now live near Adelaide, South Australia, but since November 2014 I have been an International Member of [http://www.keatingchambers.co.uk/home.aspx Keating Chambers] in London.<br /> <br /> One of the most experienced construction and energy lawyers in the common law world, I was the founder of [http://www.fenwickelliott.com/ Fenwick Elliott LLP] in London in 1980 and senior partner of that firm for 22 years. Having moved to Australia in a failed attempt to retire, I was a founding partner at [http://feg.com.au/ Fenwick Elliott Grace] in Adelaide until 2013, when I went to the [http://www.sabar.org.au/ independent bar].<br /> <br /> I am presently admitted in South Australia, New South Wales, the Federal Court of Australia.<br /> <br /> I have been involved – typically as lead lawyer – in the resolution of many disputes involving in aggregate many hundreds of millions of dollars. Most of these have been in the field of construction or engineering disputes.<br /> <br /> The projects have involved the construction of mining facilities, process plants, power stations, pipe lines and pumping stations, marine terminals, ships, FPSOs, harbours, dams, reservoirs, hospitals, factories, office buildings, shopping malls, hotels, housing developments, libraries, sports facilities, roads, rail, bridges, tunnels, security facilities and other types of structures. They have involved work in many jurisdictions, including Argentina, Brazil, Christmas Island, Egypt, England, Fiji, Hong Kong, India, Iran, Iraq, Jersey, Kenya, Lebanon, Libya, Malta, New South Wales, Queensland, Pakistan, Russia, Scotland, South Africa, South Australia, Spain, Syria, Ukraine, USA, Victoria, Wales, West Indies and Western Australia.<br /> <br /> I am a former chairman, then now vice president of [http://www.tecsa.org.uk/ TeCSA]. I am presently a board member of the [http://www.scl.org.au/ Society of Construction Law Australia].<br /> <br /> I was accredited a mediator by CEDR many years ago and by the Institute of Arbitrators and Mediators Australia in 2006. I was accredited as an adjudicator many years ago by TeCSA, CIC, CIoB and more recently the government of the Northern Territory. As such, I have [https://feconslaw.wordpress.com/2015/10/21/the-mediation-albatros/#more-708 successfully] mediated or adjudicated many disputes in several jurisdictions.<br /> <br /> A member of the DRBF, I presently chair the Dispute Avoidance Board for the substantial Sydney Light Rail project.<br /> <br /> -----<br /> Articles on Designing Buildings Wiki by Robert Fenwick Elliott include:<br /> <br /> * [[Pendulum_arbitration|Pendulum arbitration]]. January 2016.<br /> * [[Pay_now_argue_later|Pay now argue later]]. January 2016.<br /> * [[2015_appointments_to_the_Irish_Construction_Contracts_Adjudication_Panel|2015 appointments to the Irish Construction Contracts Adjudication Panel]]. January 2016.<br /> * [[The_distinction_between_liquidated_damages_clauses_and_penalty_clauses|The distinction between liquidated damages clauses and penalty clauses]]. November 2015.<br /> * [[Privy_Council_in_NH_International_(Caribbean)_Limited_v_National_Insurance_Property_Development_Company_Limited_(Trinidad_and_Tobago)|Privy Council in NH International (Caribbean) Limited v National Insurance Property Development Company Limited (Trinidad and Tobago)]]. September 2015.<br /> * [[Aspect_Contracts_(Asbestos)_v_Higgins_Construction_2015|Aspect Contracts (Asbestos) v Higgins Construction 2015]]. August 2015</div>

Robert Fenwick Elliott https://www.designingbuildings.co.uk/wiki/The_distinction_between_liquidated_damages_clauses_and_penalty_clauses 2016-01-24T09:19:39Z

<p>Robert Fenwick Elliott: </p> <hr /> <div>= Introduction =<br /> <br /> Students of construction law love writing papers about the distinction between liquidated damages clauses and penalty clauses. Traditionally, it has been relatively firm ground, and in particular, everybody trots out the dicta of Lord Dunedin in Dunlop v New Garage.<br /> <br /> But things have begun to change. First there was the decision of the High Court of Australia in Andrews v ANZ. Then there was the follow up decision in Paciocco. Now there’s been the decision from England in Cavendish v El Makdessi.<br /> <br /> If you have got one of those old papers, which trots out the famous dicta of Lord Dunedin, you might as well throw it away. Quite what we have in its place depends somewhat on where you sit in the common law world. Also changed, but not quite gone, is the interesting but still speculative notion that some time bar provisions, which contain particularly onerous notice provisions, might be circumvented by the equitable doctrine of relief from forfeiture.<br /> <br /> Before getting to these new cases, we should acknowledge what is being buried.<br /> <br /> = Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd =<br /> <br /> As noted in Cavendish, “Lord Dunedin’s speech in Dunlop achieved the status of a quasi-statutory code in the subsequent case-law”:<br /> <br /> * Though the parties to a contract who use the words ‘penalty’ or ‘liquidated damages’ may prima facie be supposed to mean what they say, yet the expression used is not conclusive. The court must find out whether the payment stipulated is in truth a penalty or liquidated damages. This doctrine may be said to be found passim in nearly every case.<br /> * The essence of a penalty is a payment of money stipulated as in terrorem of the offending party; the essence of liquidated damages is a genuine covenanted pre-estimate of damage (Clydebank Engineering …).<br /> * The question whether a sum stipulated is penalty or liquidated damages is a question of construction to be decided upon the terms and inherent circumstances of each particular contract, judged of as at the time of the making of the contract, not as at the time of the breach (Public Works Comr v Hills and Webster v Bosanquet).<br /> * To assist this task of construction various tests have been suggested, which if applicable to the case under consideration may prove helpful, or even conclusive. Such are:<br /> * (a) It will be held to be penalty if the sum stipulated for is extravagant and unconscionable in amount in comparison with the greatest loss that could conceivably be proved to have followed from the breach. (Illustration given by Lord Halsbury in Clydebank case.)<br /> * (b) It will be held to be a penalty if the breach consists only in not paying a sum of money, and the sum stipulated is a sum greater than the sum which ought to have been paid (Kemble v Farren 6 Bing 141). This though one of the most ancient instances is truly a corollary to the last test. …<br /> * (c) There is a presumption (but no more) that it is a penalty when ‘a single lump sum is made payable by way of compensation, on the occurrence of one or more or all of several events, some of which may occasion serious and others but trifling damage’ (Lord Watson in Elphinstone v Monkland Iron and Coal Co 11 App Cas 332).<br /> <br /> On the other hand:<br /> <br /> * (d) It is no obstacle to the sum stipulated being a genuine pre-estimate of damage, that the consequences of the breach are such as to make precise pre-estimation almost an impossibility. On the contrary, that is just the situation when it is probable that pre-estimated damage was the true bargain between the parties (Clydebank Case, Lord Halsbury at p 11; Webster v Bosanquet, Lord Mersey at p 398)<br /> <br /> Dunlop was not a construction case, but these words have been picked over time and time again in construction cases, particularly by contractors who have finished late and who want to demonstrate that the liquidated damages provision in their contract is in fact penal and hence inapplicable. There have been many occasions in which they have succeeded in this, although in recent times, and particularly since the decision in Philips v Attorney General of Hong Kong, the courts of been increasingly cautious about finding these provisions to be penal.<br /> <br /> = Andrews v Australia and New Zealand Banking Group Ltd =<br /> <br /> Andrews v ANZ was not a construction case either, but was to do with whether various charges levied by the banks (the ANZ in this case) were penal and hence unenforceable. It was decided by the High Court of Australia, which is the highest court there is in Australia, and whose decisions have in the past carried considerable weight throughout the common law world (as, for example, the decision in Pavey &amp;amp; Matthews v Paul, which abolished the doctrine of quasi-contract in favour of the restitutionary basis for quantum meruit). The Andrews decision departed from the conventional understanding of the penalty doctrine in two important respects.<br /> <br /> First, the High Court said that the penalty doctrine is not limited to cases arising out of a breach of contract. This is important in construction contracts, not least because of its possible extension to time bar provisions. Some contracts, instead of saying, “You must give notice if you are delayed” (such that failing to give notice is a breach of contract) merely say, “If you do not give notice of delay, then you do not get an extension of time or any associated money”. Getting rid of this concept of breach means that the penalty doctrine becomes rather more difficult to express succinctly, and instead we got this far from elegant formulation:<br /> <br /> In general terms, a stipulation prima facie imposes a penalty on a party (“the first party”) if, as a matter of substance, it is collateral (or accessory) to a primary stipulation in favour of a second party and this collateral stipulation, upon the failure of the primary stipulation, imposes upon the first party an additional detriment, the penalty, to the benefit of the second party. In that sense, the collateral or accessory stipulation is described as being in the nature of a security for and in terrorem of the satisfaction of the primary stipulation. If compensation can be made to the second party for the prejudice suffered by failure of the primary stipulation, the collateral stipulation and the penalty are enforced only to the extent of that compensation. The first party is relieved to that degree from liability to satisfy the collateral stipulation.<br /> <br /> Secondly, the High Court said that the doctrine had not, as had been assumed, ossified into a rigid common law rule, but remained a matter of equity, and as such can be applied in a rather more flexible way.<br /> <br /> No one quite knows what the long-term effects of the decision is going to be, either generally, or in the context of construction cases. It certainly seems to hold the door open a little wider to contractual provisions being challenged as penal. In particular, it has been speculated that it opens the way to challenging time bar provisions as penalties. The idea is that the contractual provision removing a contractor’s right to extension of time or monetary compensation in the event of delay is collateral or accessory to the primary stipulation that the contractor has to give notice. Views have been expressed for and against this idea, but it remains speculative.<br /> <br /> = Paciocco v Australia and New Zealand Banking Group Limited =<br /> <br /> Then, earlier in 2015, we had Paciocco, a decision of the Full Court of the Federal Court of Australia, the leading judgment being given by the much respected Chief Justice Robert Allsop. In particular, he identified difficulties arising from the dichotomy of penalty and genuine pre-estimate of loss. He dealt with this by treating the notion of a genuine pre-estimate of loss is simply the reflexive a penalty saying<br /> <br /> * 100…It is not necessary, for the sum to be regarded as a genuine pre-estimate of loss, for the parties to have set the figure by reference to likely loss.<br /> <br /> Accordingly:<br /> <br /> * The penal character of the provision is derived from the extravagance of the relationship between the payment and the possible loss capable of compensation. If there is no such extravagance present, the provision failure of which (by breach or not) admits of compensation is taken to be a genuine pre-estimate of damage, and not penal in character. This is so, even if the parties do not express the clause to be an agreed pre-estimate of damage and even if the parties did not negotiate or set the amount payable by reference to an estimate of damage.<br /> <br /> That decision makes it all the harder to demonstrate that any particular contractual provision is a penalty merely by showing it does not reflect any genuine pre-estimate of loss.<br /> <br /> = Cavendish =<br /> <br /> And now we have the decision in Cavendish or, to give it its full title, Cavendish Square Holding BV v Talal El Makdessi, ParkingEye Limited v Beavis [2015] UKSC 67. It is a decision of what is now known as the United Kingdom Supreme Court, which used to be known as the House of Lords. To avoid confusion, in this post it will be called the House of Lords Supreme Court.<br /> <br /> The appeal joined two unconnected cases. The first was a commercial case involving the sale of shares in a substantial advertising and marketing communications group in the Middle East. The second was at the other end of the scale, arising out of an £85 charge for a motorist exceeding the permitted 2 hour stay in a car park. The speeches of the seven Law Lords, taken together, run to over 300 paragraphs. They took the opportunity to thoroughly review the doctrine of penalties. Indeed, they were invited to abolish it altogether, but declined to do so. There were no dissenting judgements (apart from Lord Toulson to a limited degree with regard to the application of consumer regulations) but they do not all take precisely the same line. There are a few things which clearly emerge from the judgements as a whole.<br /> <br /> = Forget Lord Dunedin =<br /> <br /> The new orthodoxy that has emerged from Cavendish is that it is time to reformulate the test. There were several references to other speeches in that case, noting that<br /> <br /> * …none of the other three Law Lords expressly agreed with Lord Dunedin’s reasoning, and the four tests do not all feature in any of their speeches<br /> <br /> and the penalty doctrine has now been cut loose – in England now as well as Australia – from the concept of “genuine pre-estimate of loss”:<br /> <br /> * In our opinion, the law relating to penalties has become the prisoner of artificial categorisation, itself the result of unsatisfactory distinctions: between a penalty and genuine pre-estimate of loss, and between a genuine pre-estimate of loss and a deterrent. These distinctions originate in an over-literal reading of Lord Dunedin’s four tests and a tendency to treat them as almost immutable rules of general application which exhaust the field. In Legione v Hateley (1983) 152 CLR 406, 445, Mason and Deane JJ defined a penalty as follows:<br /> * “A penalty, as its name suggests, is in the nature of a punishment for non-observance of a contractual stipulation; it consists of the imposition of an additional or different liability upon breach of the contractual stipulation …”<br /> * All definition is treacherous as applied to such a protean concept. This one can fairly be said to be too wide in the sense that it appears to be apt to cover many provisions which would not be penalties (for example most, if not all, forfeiture clauses). However, in so far as it refers to “punishment” and “an additional or different liability” as opposed to “in terrorem” and “genuine pre-estimate of loss”, this definition seems to us to get closer to the concept of a penalty than any other definition we have seen. The real question when a contractual provision is challenged as a penalty is whether it is penal, not whether it is a pre-estimate of loss. These are not natural opposites or mutually exclusive categories. A damages clause may be neither or both. The fact that the clause is not a pre-estimate of loss does not therefore, at any rate without more, mean that it is penal. To describe it as a deterrent (or, to use the Latin equivalent, in terrorem) does not add anything. A deterrent provision in a contract is simply one species of provision designed to influence the conduct of the party potentially affected. It is no different in this respect from a contractual inducement. Neither is it inherently penal or contrary to the policy of the law. The question whether it is enforceable should depend on whether the means by which the contracting party’s conduct is to be influenced are “unconscionable” or (which will usually amount to the same thing) “extravagant” by reference to some norm.<br /> <br /> = Relief from Forfeiture =<br /> <br /> For many construction lawyers, the concept of relief from forfeiture is a land law thing, learned at law school but largely forgotten since then. Our eye has been taken off the ball that the doctrine might have anything much to do with penalties. But consider a tenant who is late paying the rent. Or perhaps is in breach – perhaps a minor breach – of some covenant in the lease. The lease (probably drafted by the landlord’s lawyers to be as aggressive as legal ingenuity can devise) gives the landlord the right to forfeit the lease in these circumstances. We know that equity used to offer relief to the tenant in appropriate cases. As it did to mortgagors. And that statute subsequently codified that relief. And that is because forfeiture would be an extravagant and disproportionate remedy. The concept is not a million miles from that of penalties.<br /> <br /> And this is what the House of Lords Supreme Court has now drawn vivid attention to. The first speech of Lords Neuberger and Sumption (Lord Carnwath agreeing) set the scene:<br /> <br /> * The relationship between penalty clauses and forfeiture clauses is not entirely easy. Given that they had the same origin in equity, but that the law on penalties was then developed through common law while the law on forfeitures was not, this is unsurprising.<br /> <br /> The House of Lords Supreme Court picked up and ran with a concept rolled out in BICC plc v Burndy Corpn [1985] Ch 232, namely that the court’s approach is first to look at the penalty issue, and then, if not satisfied that the clause is penal, to then consider whether to grant relief from forfeiture. Lord Hodge said:<br /> <br /> * There is no reason in principle why a contractual provision, which involves forfeiture of sums otherwise due, should not be subjected to the rule against penalties, if the forfeiture is wholly disproportionate either to the loss suffered by the innocent party or to another justifiable commercial interest which that party has sought to protect by the clause. If the forfeiture is not so exorbitant and therefore is enforceable under the rule against penalties, the court can then consider whether under English law it should grant equitable relief from forfeiture, looking at the position of the parties after the breach and the circumstances in which the contract was broken. This was the approach which Dillon LJ adopted in BICC plc v Burndy Corpn [1985] Ch 232 and in which Ackner LJ concurred. The court risks no confusion if it asks first whether, as a matter of construction, the clause is a penalty and, if it answers that question in the negative, considers whether relief in equity should be granted having regard to the position of the parties after the breach.<br /> <br /> There are a number of interesting things about this.<br /> <br /> First, we have not hitherto been going down this track in construction law. The idea of the twofold test is new.<br /> <br /> Secondly, the second ground may be, at least in some cases, wider than the first. The passage is predicated on the possibility that a clause might clear the penalty hurdle, but fall at the relief from forfeiture hurdle.<br /> <br /> Thirdly, this second hurdle involves a wider enquiry. The traditional view is that the penalty issue is judged as at the time of the contract, not the time of the breach, and this bit of Dunlop appears to survive. But the relief from forfeiture issue requires the court to look at what has actually happened (if anything) as a result of the breach. Think about the case of a bridge crossing a river as part of a new road through some virgin forest. The bridge contractor is late. The liquidated damages clause in the bridge contract may well not be penal; at the time of the making of the bridge contract, it might have been perfectly reasonable. But suppose the road either side of the bridge, being constructed by another contractor, is even later? The owner suffers no loss at all as a result of the bridge being late; until the road is built, the bridge is useless. Should the bridge contractor still forfeit the liquidated damages in these circumstances? Or should the courts give relief against that forfeiture? We do not know how this will pan out.<br /> <br /> Fourthly, look at the passage again in the context of a notice provision, whereby a contractor forfeits their right to extensions of time, or loss and expense, or payment for variations, unless they give notice in a specified form by a specified time. That looks, at first blush, well within the doctrine. And even though the court might decide that such a time bar is not penal, it might nevertheless conclude that the failure to give notice was in the event of no practical consequence whatsoever, since the owner knew perfectly well of the relevant event, of its likely impact on time and cost, and that the contractor would be making a claim for it. And so all of the legitimate purposes of the notice provision are otherwise satisfied. Should the court grant relief from forfeiture in these circumstances? It looks arguable, but again we will have to wait and see what courts do with the argument.<br /> <br /> So, how had we all missed this? Partly, it is because it was widely assumed for a long time that the equitable doctrine of relief from forfeiture had been entirely subsumed by the statutory codification of the doctrine in the case of forfeiture of mortgages and leases. But in Shiloh Spinners Ltd v Harding [1973] AC 691 the House of Lords had said, “Oh no. The old equitable doctrine still applies in other contexts”. That case was highlighted recently by the Privy Council in Cukurova Finance International Ltd &amp;amp; Anor v Alfa Telecom Turkey Ltd (British Virgin Islands) [2013] UKPC 2. This is how Lord Wilberforce had put it in Shiloh:<br /> <br /> * There cannot be any doubt that from the earliest times courts of equity have asserted the right to relieve against the forfeiture of property. The jurisdiction has not been confined to any particular type of case…I would fully endorse this: it remains true today that equity expects men to carry out their bargains and will not let them buy their way out by uncovenanted payment. But it is consistent with these principles that we should reaffirm the right of courts of equity in appropriate and limited cases to relieve from forfeiture for breach of covenant or condition where the primary object of the bargain is to secure a stated result which can effectively be attained when the matter comes before the court, and where the forfeiture provision is added by way of security for the production of that result. The word ‘appropriate’ involves consideration of the conduct of the applicant for relief, in particular whether his default was wilful, of the gravity of the breaches, and of the disparity between the value of the property of which forfeiture is claimed as compared with the damage caused by the breach.<br /> <br /> Note the reference to “limited cases”. Viscount Dilhorne also emphasised this:<br /> <br /> * that the cases in which it is right to give relief against forfeiture where there has been a wilful breach of covenant are likely to be few in number and where the conduct of the person seeking to secure the forfeiture has been wholly unreasonable and of a rapacious and unconscionable character.<br /> <br /> Again, it might be thought that this formulation might include cases where a contractor’s right to time or money is forfeit by a failure to give a prescribed notice, and where the primary objects of a notice provision are effectively otherwise attained. But what about the reference to conduct “of a rapacious and unconscionable character”?<br /> <br /> In many cases, of course, reliance by an owner on a liquidated damages clause or time-barring notice provision is reasonable, but there are other cases – where they have suffered no loss at all and, in the case of a notice provision, the evident purpose of the drafting of the clause was to prescribe the practically impossible, laying a trap so to speak – where it might well be said that there is rapaciousness and unconscionability.<br /> <br /> = Scaptrade =<br /> <br /> But what about Scaptrade? That decision (more fully Scandinavian Trading Tanker Co AB v Flota Petrolera Ecuatoriana; The Scaptrade) was a case in which an attempt was made to extent Shiloh to a shipping case about a time charter. Lord Diplock said:<br /> <br /> * My Lords, Shiloh Spinners Ltd v Harding was a case about a right of re-entry on leasehold property for breach of a covenant, not to pay money but to do things on land. It was in a passage that was tracing the history of the exercise by the Court of Chancery of its jurisdiction to relieve against forfeiture of property that Lord Wilberforce said ([1973] 1 All ER 90 at 100, [1973] AC 691 at 722):<br /> * ‘There has not been much difficulty as regards two heads of jurisdiction. First, where it is possible to state that the object of the transaction and of the insertion of the right to forfeit is essentially to secure the payment of money, equity has been willing to relieve on terms that the payment is made with interest, if appropriate, and also costs.’<br /> * That this mainly historical statement was never meant to apply generally to contracts not involving any transfer of proprietary or possessory rights, but providing for a right to determine the contract in default of punctual payment of a sum of money payable under it, is clear enough from Lord Wilberforce’s speech in The Laconia. Speaking of a time charter he said: ‘It must be obvious that this is a very different type of creature from a lease of land.’<br /> * Moreover, in the case of a time charter it is not possible to state that the object of the insertion of a withdrawal clause, let alone the transaction itself, is essentially to secure the payment of money. Hire is payable in advance in order to provide a fund from which the shipowner can meet those expenses of rendering the promised services to the charterer that he has undertaken to bear himself under the charterparty, in particular the wages and victualling of master and crew, the insurance of the vessel and her maintenance in such a state as will enable her to continue to comply with the warranty of performance.<br /> * This, the commercial purpose of obtaining payment of hire in advance, also makes inapplicable another analogy sought to be drawn between a withdrawal clause and a penalty clause of the kind against which courts of law, as well as courts of equity, before the Judicature Acts had exercised jurisdiction to grant relief. The classic form of penalty clause is one which provides that on breach of a primary obligation under the contract, a secondary obligation shall arise on the party in breach to pay to the other party a sum of money which does not represent a genuine pre-estimate of any loss likely to be sustained by him as the result of the breach of primary obligation but is substantially in excess of that sum. The classic form of relief against such a penalty clause has been to refuse to give effect to it, but to award the common law measure of damages for the breach of primary obligation instead. Lloyd J in The Afovos attached importance to the majority judgments in Stockloser v Johnson [1954] 1 All ER 630, [1954] 1 QB 476, which expressed the opinion that money already paid by one party to the other under a continuing contract prior to an event which under the terms of the contract entitled that other party to elect to rescind it and to retain the money already paid might be treated as money paid under a penalty clause and recovered to the extent that it exceeded to an unconscionable extent the value of any consideration that had been given for it. Assuming this to be so, however, it is incapable of having any application to time charters and withdrawal notices. Moneys paid by the charterer prior to the withdrawal notice that puts an end to the contract for services represent the agreed rate of hire for services already rendered, and not a penny more.<br /> * All the analogies that ingenuity has suggested may be discovered between a withdrawal clause in a time charter and other classes of contractual provisions in which courts have relieved parties from the rigour of contractual terms into which they have entered can in my view be shown on juristic analysis to be false. Prima facie parties to a commercial contract bargaining on equal terms can make ‘time to be of the essence’ of the performance of any primary obligation under the contract that they please, whether the obligation be to pay a sum of money or to do something else. When time is made of the essence of a primary obligation, failure to perform it punctually is a breach of a condition of the contract which entitles the party not in breach to elect to treat the breach as putting an end to all primary obligations under the contract that have not already been performed. In the Tankexpress case this House held that time was of the essence of the very clause with which your Lordships are now concerned where it appeared in what was the then current predecessor of the Shelltime 3 charter. As is well known, there are available on the market a number of so-(mis)called ‘anti-technicality clauses’, such as that considered in The Afovos, which require the shipowner to give a specified period of notice to the charterer in order to make time of the essence of payment of advance hire; but at the expiry of such notice, provided it is validly given, time does become of the essence of the payment.<br /> * My Lords, quite apart from the juristic difficulties in the way of recognising a jurisdiction in the court to grant relief against the operation of a withdrawal clause in a time charter, there are practical reasons of legal policy for declining to create any such new jurisdiction out of sympathy for charterers.<br /> <br /> Scaptrade was relied on in the first instance decision in The Padre, which was mentioned in another context in Cavendish, but apart from that indirect reference, Cavendish does not refer to Scaptrade at all. Which is a bit of a puzzle. Because the discussion of the relief from forfeiture doctrine in Cavendish suggests precisely what Scaptrade says you cannot do, namely apply the doctrine in commercial cases which concern only payment of money, not proprietary interests. The assumption has been that Scaptrade prevents any incursions of the relief from forfeiture doctrine into construction cases, but it is probably time now to review that assumption.<br /> <br /> = Cavendish treatment of the Australian cases =<br /> <br /> What did the speeches in Cavendish have to say about the recent Australian cases?<br /> <br /> Lords Neuberger and Sumption were not prepared to follow the Andrews line that the penalties doctrine is now free from its link to breach of contract. But Lord Hodge hung on to the notion of disguised penalties:<br /> <br /> * The rule may also be criticised because it can be circumvented by careful drafting. Indeed one of Cavendish’s arguments was that clause 5.1 could have been removed from the scope of the rule if it had been worded so as to make the payment of the instalments conditional upon performance of the clause 11 obligations. This is a consequence of the rule applying only in the context of breach of contract. But where it is clear that the parties have so circumvented the rule and that the substance of the contractual arrangement is the imposition of punishment for breach of contract, the concept of a disguised penalty may enable a court to intervene: see Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1989] QB 433, Bingham LJ at pp 445-446 and, more directly, the American Law Institute’s “Restatement of the Law, Second, Contracts” section 356 on liquidated damages and penalties, in which the commentary suggests that the court’s focus on the substance of the contractual term would enable it in an appropriate case to identify disguised penalties.<br /> <br /> So, consider these scenarios:<br /> <br /> # The contract requires the contractor to complete the building of a house by 30th June, and provides for liquidated damages of $1 million a day if the contractor is late.<br /> # The contract contains no completion date, but provides that the contractor must pay rent of $1million a day if he does not complete by 30th.<br /> <br /> The first is plainly penal. In the second, there is no breach of contract if the contractor finishes in July, but the effect of the contract is the same as the first. It is a disguised penalty, so that the penalty doctrine may well be enlivened.<br /> <br /> There may be grey areas, such as in the case of lane rental contracts, but the difference between the English approach and the Australian approach might not be so very great in practice.<br /> <br /> The approach of Paciocco on the other hand – that all the attention should be on the penalty test and not on the pre-estimate of loss test – was wholeheartedly endorsed, Lords Neuberger and Sumption saying:<br /> <br /> * The real question when a contractual provision is challenged as a penalty is whether it is penal, not whether it is a pre-estimate of loss. These are not natural opposites or mutually exclusive categories. A damages clause may be neither or both. The fact that the clause is not a pre-estimate of loss does not therefore, at any rate without more, mean that it is penal.<br /> <br /> = Where is this Headed? =<br /> <br /> So, where is all this going? Are the courts shutting down challenges, applying black letter law? Or widening the grounds of challenge? It is some of each, it seems.<br /> <br /> Lords Neuberger and Sumption said:<br /> <br /> * …the courts do not review the fairness of men’s bargains either at law or in equity.<br /> <br /> And the speeches were particularly reticent about interfering with commercial bargains on a level commercial playing field negotiated with the assistance of lawyers. But there perhaps a dose of salt should be taken with this, and in the previous breath, they said<br /> <br /> * There is a fundamental difference between a jurisdiction to review the fairness of a contractual obligation and a jurisdiction to regulate the remedy for its breach.<br /> <br /> They spoke about “the true test” in terms not so very different from Andrews:<br /> <br /> * The true test is whether the impugned provision is a secondary obligation which imposes a detriment on the contract-breaker out of all proportion to any legitimate interest of the innocent party in the enforcement of the primary obligation. The innocent party can have no proper interest in simply punishing the defaulter. His interest is in performance or in some appropriate alternative to performance<br /> <br /> Or, as Lord Mance put it:<br /> <br /> * What is necessary in each case is to consider, first, whether any (and if so what) legitimate business interest is served and protected by the clause, and, second, whether, assuming such an interest to exist, the provision made for the interest is nevertheless in the circumstances extravagant, exorbitant or unconscionable.<br /> <br /> For many in the commercial field the concepts of fairness and legitimate business interest might be hard to separate. Usually, where it is possible to say of a provision in a commercial construction contract: “That provision is unfair!”, it will be equally possible to say: “That provision serves no legitimate business interest!”<br /> <br /> In the case of liquidated damages clauses, the net effect of Cavendish is probably going to be to make challenges easier. Certainly, a clause is not going to be declared penal unless it is way beyond the pale of what is commercially appropriate, but that was pretty much the situation anyway following cases like Philips v Attorney General of Hong Kong.<br /> <br /> But the second wave of attack – in the form of relief from forfeiture – might well succeed in those cases, by no means uncommon, where the liquidated damages are way in excess of the loss, if any, actually suffered by the owner by reason of the late completion.<br /> <br /> What about time-barring notice provisions? The application of the Andrews case to these notices remains speculative in Australia. This new attention to relief from forfeiture will add to comparable speculation elsewhere in the common law world. It raises a number of interesting and difficult questions. For example, is it within the jurisdiction of an adjudicator to afford relief against the forfeiture of contractual rights for failure to give notice? To what extent will the courts put unbending enforcement of notice provisions in onerous “hard money” contracts into the “rapacious and unconscionable” basket? Only time will tell.<br /> <br /> -----<br /> The original version of this article can be seen at: [https://feconslaw.wordpress.com/2015/11/13/penalties-a-brief-guide-to-three-recent-revolutions/ Penalties – a Brief Guide to Three Recent Revolutions], 13/11/2015 by Robert Fenwick Elliott.<br /> <br /> --[[User:Robert_Fenwick_Elliott|Robert Fenwick Elliott]]<br /> <br /> = Find out more =<br /> <br /> === Related articles on Designing Buildings Wiki ===<br /> <br /> * Compensation event.<br /> * Completion date.<br /> * Concurrent delay.<br /> * Damages in construction contracts.<br /> * Extension of time.<br /> * Liquidated damages.<br /> * Loss and expense.<br /> * Measure of damages.<br /> * Oakapple Homes (Glossop) Ltd v DTR (2009) Ltd and others.<br /> * Privy Council in NH International (Caribbean) Limited v National Insurance Property Development Company Limited (Trinidad and Tobago).<br /> * Relevant event.<br /> <br /> [[Category:International]] [[Category:Case_law]]</div>

Robert Fenwick Elliott https://www.designingbuildings.co.uk/wiki/User:Robert_Fenwick_Elliott 2016-01-24T09:17:43Z

<p>Robert Fenwick Elliott: </p> <hr /> <div>[[File:Keating_2015.jpg|200px|link=File:Keating_2015.jpg]]<br /> <br /> I am Robert Fenwick Elliott, a construction and energy lawyer now practising as a barrister. I now live near Adelaide, South Australia, but since November 2014 I have been an International Member of [http://www.keatingchambers.co.uk/home.aspx Keating Chambers] in London.<br /> <br /> One of the most experienced construction and energy lawyers in the common law world, I was the founder of [http://www.fenwickelliott.com/ Fenwick Elliott LLP] in London in 1980 and senior partner of that firm for 22 years. Having moved to Australia in a failed attempt to retire, I was a founding partner at [http://feg.com.au/ Fenwick Elliott Grace] in Adelaide until 2013, when I went to the [http://www.sabar.org.au/ independent bar].<br /> <br /> I am presently admitted in South Australia, New South Wales, the Federal Court of Australia.<br /> <br /> I have been involved – typically as lead lawyer – in the resolution of many disputes involving in aggregate many hundreds of millions of dollars. Most of these have been in the field of construction or engineering disputes.<br /> <br /> The projects have involved the construction of mining facilities, process plants, power stations, pipe lines and pumping stations, marine terminals, ships, FPSOs, harbours, dams, reservoirs, hospitals, factories, office buildings, shopping malls, hotels, housing developments, libraries, sports facilities, roads, rail, bridges, tunnels, security facilities and other types of structures. They have involved work in many jurisdictions, including Argentina, Brazil, Christmas Island, Egypt, England, Fiji, Hong Kong, India, Iran, Iraq, Jersey, Kenya, Lebanon, Libya, Malta, New South Wales, Queensland, Pakistan, Russia, Scotland, South Africa, South Australia, Spain, Syria, Ukraine, USA, Victoria, Wales, West Indies and Western Australia.<br /> <br /> I am a former chairman, then now vice president of [http://www.tecsa.org.uk/ TeCSA]. I am presently a board member of the [http://www.scl.org.au/ Society of Construction Law Australia].<br /> <br /> I was accredited a mediator by CEDR many years ago and by the Institute of Arbitrators and Mediators Australia in 2006. I was accredited as an adjudicator many years ago by TeCSA, CIC, CIoB and more recently the government of the Northern Territory. As such, I have [https://feconslaw.wordpress.com/2015/10/21/the-mediation-albatros/#more-708 successfully] mediated or adjudicated many disputes in several jurisdictions.<br /> <br /> A member of the DRBF, I presently chair the Dispute Avoidance Board for the substantial Sydney Light Rail project.<br /> <br /> -----<br /> Articles on Designing Buildings Wiki by Robert Fenwick Elliott include:<br /> <br /> * [[Pendulum_arbitration|Pendulum arbitration]]. January 2016.<br /> * [[Pay_now_argue_later|Pay now argue later]]. January 2016.<br /> * [[2015_appointments_to_the_Irish_Construction_Contracts_Adjudication_Panel|2015 appointments to the Irish Construction Contracts Adjudication Panel]]. January 2016.<br /> * [[The_distinction_between_liquidated_damages_clauses_and_penalty_clauses|The distinction between liquidated damages clauses and penalty clauses]]. November 2015.<br /> * [[Privy_Council_in_NH_International_(Caribbean)_Limited_v_National_Insurance_Property_Development_Company_Limited_(Trinidad_and_Tobago)|Privy Council in NH International (Caribbean) Limited v National Insurance Property Development Company Limited (Trinidad and Tobago)]]. September 2015.</div>

Robert Fenwick Elliott https://www.designingbuildings.co.uk/wiki/User:Robert_Fenwick_Elliott 2016-01-23T09:13:03Z

<p>Robert Fenwick Elliott: </p> <hr /> <div>[[File:Keating_2015.jpg|200px|link=File:Keating_2015.jpg]]<br /> <br /> I am Robert Fenwick Elliott, a construction and energy lawyer now practising as a barrister. I now live near Adelaide, South Australia, but since November 2014 I have been an International Member of [http://www.keatingchambers.co.uk/home.aspx Keating Chambers] in London.<br /> <br /> One of the most experienced construction and energy lawyers in the common law world, I was the founder of [http://www.fenwickelliott.com/ Fenwick Elliott LLP] in London in 1980 and senior partner of that firm for 22 years. Having moved to Australia in a failed attempt to retire, I was a founding partner at [http://feg.com.au/ Fenwick Elliott Grace] in Adelaide until 2013, when I went to the [http://www.sabar.org.au/ independent bar].<br /> <br /> I am presently admitted in South Australia, New South Wales, the Federal Court of Australia.<br /> <br /> I have been involved – typically as lead lawyer – in the resolution of many disputes involving in aggregate many hundreds of millions of dollars. Most of these have been in the field of construction or engineering disputes.<br /> <br /> The projects have involved the construction of mining facilities, process plants, power stations, pipe lines and pumping stations, marine terminals, ships, FPSOs, harbours, dams, reservoirs, hospitals, factories, office buildings, shopping malls, hotels, housing developments, libraries, sports facilities, roads, rail, bridges, tunnels, security facilities and other types of structures. They have involved work in many jurisdictions, including Argentina, Brazil, Christmas Island, Egypt, England, Fiji, Hong Kong, India, Iran, Iraq, Jersey, Kenya, Lebanon, Libya, Malta, New South Wales, Queensland, Pakistan, Russia, Scotland, South Africa, South Australia, Spain, Syria, Ukraine, USA, Victoria, Wales, West Indies and Western Australia.<br /> <br /> I am a former chairman, then now vice president of [http://www.tecsa.org.uk/ TeCSA]. I am presently a board member of the [http://www.scl.org.au/ Society of Construction Law Australia].<br /> <br /> I was accredited a mediator by CEDR many years ago and by the Institute of Arbitrators and Mediators Australia in 2006. I was accredited as an adjudicator many years ago by TeCSA, CIC, CIoB and more recently the government of the Northern Territory. As such, I have [https://feconslaw.wordpress.com/2015/10/21/the-mediation-albatros/#more-708 successfully] mediated or adjudicated many disputes in several jurisdictions.<br /> <br /> A member of the DRBF, I presently chair the Dispute Avoidance Board for the substantial Sydney Light Rail project.<br /> <br /> -----<br /> Articles on Designing Buildings Wiki by Robert Fenwick Elliott include:<br /> <br /> * [[Pendulum_arbitration|Pendulum arbitration]]. January 2016.<br /> * [[Pay_now_argue_later|Pay now argue later]]. January 2016.<br /> * [[2015_appointments_to_the_Irish_Construction_Contracts_Adjudication_Panel|2015 appointments to the Irish Construction Contracts Adjudication Panel]]. January 2016.<br /> * [[Privy_Council_in_NH_International_(Caribbean)_Limited_v_National_Insurance_Property_Development_Company_Limited_(Trinidad_and_Tobago)|Privy Council in NH International (Caribbean) Limited v National Insurance Property Development Company Limited (Trinidad and Tobago)]]. September 2015.</div>

Robert Fenwick Elliott https://www.designingbuildings.co.uk/wiki/Privy_Council_in_NH_International_(Caribbean)_Limited_v_National_Insurance_Property_Development_Company_Limited_(Trinidad_and_Tobago) 2016-01-23T09:11:35Z

<p>Robert Fenwick Elliott: Created page with &quot;The decision in August 2015 of the Privy Council in NH International (Caribbean) Limited v National Insurance Property Development Company Limited (Trinidad and Tobago) arose out...&quot;</p> <hr /> <div>The decision in August 2015 of the Privy Council in NH International (Caribbean) Limited v National Insurance Property Development Company Limited (Trinidad and Tobago) arose out of Scarborough Hospital in Tobago.<br /> <br /> The first part of the Appeal was about the provision at clause 2.4 of the Red Book whereby Employers can be required to provide reasonable evidence of financial arrangements having been made and maintained which will enable it to pay the contract price. In this case, the finding was that the Employer had not done that. And so the Contractor was entitled to determine. The case is of course important to FIDIC projects; probably, FIDIC contractors do not make as much use of this clause as they could do if they wanted to.<br /> <br /> The second part of the Appeal was to do with the notice provision at clause 2.5 of the Red Book, dealing with claims brought by the Employer against the Contractor. The clause required the Employer to give notice and particulars to the Contractor as soon as practicable, specifying the clause relied on or other basis of claim and substantiation of the amount claimed. The mechanism was for the Engineer to assess the amount of the entitlement, and to include it as a deduction in certification. The final part of the clause limited the Employer’s right to set off to that contractual mechanism.<br /> <br /> The arbitrator, Robert Gaitskell, found that clause 2.5 did not bar the owner’s counterclaims, because he found that the words of clause 2.5 were not sufficiently clear to exclude common law rights of set off. It has long been the law – since Gilbert-Ash v Modern Engineering – that clear words are required to exclude those common law rights. In the High Court of Trinidad and Tobago, Rajnauth-Lee J, and then all three judges in the Court of Appeal, reached the same conclusion. The Privy Council, however, disagreed, finding that the clause was effective to bar the employer from setting off its cross claims.<br /> <br /> It is very rare for cases to reach the Privy Council; in this case, it amounted to “Round 4” of the legal fight about this particular issue. If the case had rested on the result of any of the previous three rounds, the bar would not have been effective. As cases go through round after round of appeal, the decisions get more and more authoritative, but they do not necessarily get any more logical. There are a couple of strange things about the Privy Council’s judgment in this case.<br /> <br /> First, the reasoning of the Privy Council appears in part to have been based upon the certification mechanism, the Privy Council suggesting that if late claims were to be allowed, there would not be any method by which they could be determined. This is a surprising approach; in the great majority of cases, the courts have no difficulty themselves in reaching a conclusion on whether cross claims should be allowed, and if so in what amount.<br /> <br /> Secondly, the impact of the bar was somewhat ameliorated by the Pricy Council’s decision that the clause did not bar claims that could be “characterised as abatement claims”. The distinction between an abatement (sometimes defined as a common law set off) and other sorts of set-off is far from clear. For example where goods are defective, the buyer is entitled to an abatement of the price in respect of those defects, but the buyer is equally entitled to a set-off based on the damage they suffer by reason of a breach of warranty of quality. So in that case, the buyer can choose which remedy to rely on. But in other cases (where, for example, a contractor’s work is worth less than it might otherwise be because of tardy performance), the distinction between the two is murky to say the least. And so, sending the case back to the arbitrator to decide which of the claims could be characterised as abatement claims is hardly going to add to clarity as to precisely which sorts of claims this clause, or others like it, is effective to bar. At the very least, it is hard to see that resulting confusion is indicative of the “clear words” required by Gilbert-Ash.<br /> <br /> The Privy Council’s logic is, presumably, based on the point that a claim to an abatement is not a “claim to payment” and thus outside the scope of clause 2.5. But if that is the basis of the logic, it is hard to follow through, because precisely the same logic would apply to any other set off.<br /> <br /> The real basis of the Privy Council’s decision is probably more tribal. Some judges are relatively quick to relieve the parties of the penalty that often attaches to the failure to give a contractual notice; other judges take a more “black letter” approach. This decision appears to represent Lord Neuberger applying some stick to encourage the second approach.<br /> <br /> The question of when notice provisions are treated as effective to bar otherwise valid claims is not something that is susceptible of satisfactory analysis on ordinary principles. A number of features emerge:<br /> <br /> * The notion of any genuine party autonomy in this area is a myth. Particularly in the case of bespoke contracts, but also in the case of many standard forms, the impact of notice provisions is rarely the result of any genuine agreement at all, and the parties rarely have adequate understanding of what would or would not be required by a literal interpretation of the contractual notice provisions, and the subsequent disputes about the issue are about as connected to the original bargain as any other trial by champion.<br /> * The treatment of these clauses varies greatly from tribunal to tribunal. Generally speaking, tribunals with the greatest understanding of the construction process are the tribunals that are most likely to allow notice provisions to be circumvented, and tribunals with the least understanding of the construction process most likely to apply them rigidly.<br /> * A feature which seems to be common to all tribunals, however, is their willingness to be influenced by the practical consideration of whether it was really possible for a party to give the notice required by contractual provision. The more onerous the contractual provision, the more likely it is that the tribunal will allow it to be circumvented. It is difficult to find any conventional legal basis for this analysis. The law of contract (unlike the law of tort) is supposed to be based upon the more absolute standard of what the parties have actually agreed, and there is certainly no general principle that a party should be excused from performance of a contractual obligation merely because that contractual obligation is difficult or inconvenient. But time after time, the cases suggest that adjudicators, arbitrators and courts do allow precisely this consideration to impact their approach.<br /> <br /> The relevant passage from the Privy Council’s judgment is as follows:<br /> <br /> -----<br /> The second issue: NIPDEC’s set-offs and cross-claims<br /> <br /> As explained above, the Arbitrator’s third award addressed the financial consequences of his finding that the Agreement had been validly determined by NHIC in accordance with clause 16.2. In the third award, having found what sums were owing to NHIC from NIPDEC, the Arbitrator went on to consider “NIPDEC’s counterclaims”, in respect of which he rejected NHIC’s contention that clause 2.5 barred all or some of the counterclaims, because “clear words are required to exclude common law rights of set-off and/or abatement of legitimate cross-claims” and (by implication) the words of clause 2.5 were not clear enough. That decision was upheld by Jones J and by the Court of Appeal, in a judgment given by Mendoza JA with which Jamadar and Bereaux JJA agreed.<br /> <br /> In his clearly reasoned judgment, Mendoza JA stated that, while the closing part of clause 2.5 “prohibits the employer from setting off any sum against any amount certified in a Payment Certificate”, it “does not prevent the employer from exercising his right of set-off in any other way”, and in particular “against amounts that are not certified”.<br /> <br /> The Board takes a different view. In agreement with the attractively argued submissions of Mr Alvin Fitzpatrick SC, it is hard to see how the words of clause 2.5 could be clearer. Its purpose is to ensure that claims which an employer wishes to raise, whether or not they are intended to be relied on as set-offs or cross-claims, should not be allowed unless they have been the subject of a notice, which must have been given “as soon as practicable”. If the Employer could rely on claims which were first notified well after that, it is hard to see what the point of the first two parts of clause 2.5 was meant to be. Further, if an Employer’s claim is allowed to be made late, there would not appear to be any method by which it could be determined, as the Engineer’s function is linked to the particulars, which in turn must be contained in a notice, which in turn has to be served “as soon as practicable”.<br /> <br /> Perhaps most crucially, it appears to the Board that the Court of Appeal’s analysis overlooks the fact that, although the closing part of clause 2.5 limits the right of an Employer in relation to raising a claim by way of set-off against the amount specified in a Payment Certificate, the final words are “or to otherwise claim against the Contractor, in accordance with this sub-clause”. It is very hard to see a satisfactory answer to the contention that the natural effect of the closing part of clause of 2.5 is that, in order to be valid, any claim by an Employer must comply with the first two parts of the clause, and that this extends to, but, in the light of the word “otherwise”, is not limited to, set-offs and cross-claims.<br /> <br /> More generally, it seems to the Board that the structure of clause 2.5 is such that it applies to any claims which the Employer wishes to raise. First, “any payment under any clause of these Conditions or otherwise in connection with the Contract” are words of very wide scope indeed. Secondly, the clause makes it clear that, if the Employer wishes to raise such a claim, it must do so promptly and in a particularised form: that seems to follow from the linking of the Engineer’s role to the notice and particulars. Thirdly, the purpose of the final part of the clause is to emphasise that, where the Employer has failed to raise a claim as required by the earlier part of the clause, the back door of set-off or cross-claims is as firmly shut to it as the front door of an originating claim.<br /> <br /> The reasoning of Hobhouse LJ in Mellowes Archital Ltd v Bell Products Ltd (1997) 58 Con LR 22, 25-30, supports this conclusion. It also demonstrates that a provision such as clause 2.5 does not preclude the Employer from raising an abatement argument – eg that the work for which the contractor is seeking a payment was so poorly carried out that it does not justify any payment, or that it was defectively carried out so that it is worth significantly less than the contractor is claiming.<br /> <br /> In the light of the unchallenged part of the Court of Appeal’s decision, it is common ground that the third award must be remitted to the Arbitrator. In the light of the Board’s decision as to the effect of clause 2.5, it will have to be remitted on the basis that he will have to reconsider the sums which he allowed NIPDEC to raise by way of set-off or cross claims. Any of those sums which (i) were not the subject of appropriate notification complying with the first two parts of clause 2.5 and (ii) cannot be characterised as abatement claims as opposed to set-offs or cross-claims, must be disallowed. It is for the Arbitrator to decide which sums are to be allowed in the light of this conclusion, and to decide how he should proceed to determine that issue.<br /> <br /> -----<br /> The original version of this article can be seen at [https://feconslaw.wordpress.com/2015/09/07/scarborough-fair/#more-683 Scarborough Fair?] posted on 07/09/2015 by Robert Fenwick Elliott.<br /> <br /> --[[User:Robert Fenwick Elliott|Robert Fenwick Elliott]] 09:11, 23 Jan 2016 (BST)<br /> <br /> = Find out more =<br /> <br /> === Related Articles on Designing Buildings Wiki ===<br /> <br /> * Abatement.<br /> * Adjudication.<br /> * Alternative dispute resolution.<br /> * Arbitration.<br /> * Conciliation<br /> * Contract claims.<br /> * Dispute resolution board.<br /> * Pay now argue later.<br /> * Pendulum arbitration.<br /> * Mediation.<br /> * Set off.<br /> <br /> [[Category:International]] [[Category:Case_law]] [[Category:DCN_Case_Law]]</div>

Robert Fenwick Elliott https://www.designingbuildings.co.uk/wiki/User:Robert_Fenwick_Elliott 2016-01-23T08:50:20Z

<p>Robert Fenwick Elliott: </p> <hr /> <div>[[File:Keating_2015.jpg|200px|link=File:Keating_2015.jpg]]<br /> <br /> I am Robert Fenwick Elliott, a construction and energy lawyer now practising as a barrister. I now live near Adelaide, South Australia, but since November 2014 I have been an International Member of [http://www.keatingchambers.co.uk/home.aspx Keating Chambers] in London.<br /> <br /> One of the most experienced construction and energy lawyers in the common law world, I was the founder of [http://www.fenwickelliott.com/ Fenwick Elliott LLP] in London in 1980 and senior partner of that firm for 22 years. Having moved to Australia in a failed attempt to retire, I was a founding partner at [http://feg.com.au/ Fenwick Elliott Grace] in Adelaide until 2013, when I went to the [http://www.sabar.org.au/ independent bar].<br /> <br /> I am presently admitted in South Australia, New South Wales, the Federal Court of Australia.<br /> <br /> I have been involved – typically as lead lawyer – in the resolution of many disputes involving in aggregate many hundreds of millions of dollars. Most of these have been in the field of construction or engineering disputes.<br /> <br /> The projects have involved the construction of mining facilities, process plants, power stations, pipe lines and pumping stations, marine terminals, ships, FPSOs, harbours, dams, reservoirs, hospitals, factories, office buildings, shopping malls, hotels, housing developments, libraries, sports facilities, roads, rail, bridges, tunnels, security facilities and other types of structures. They have involved work in many jurisdictions, including Argentina, Brazil, Christmas Island, Egypt, England, Fiji, Hong Kong, India, Iran, Iraq, Jersey, Kenya, Lebanon, Libya, Malta, New South Wales, Queensland, Pakistan, Russia, Scotland, South Africa, South Australia, Spain, Syria, Ukraine, USA, Victoria, Wales, West Indies and Western Australia.<br /> <br /> I am a former chairman, then now vice president of [http://www.tecsa.org.uk/ TeCSA]. I am presently a board member of the [http://www.scl.org.au/ Society of Construction Law Australia].<br /> <br /> I was accredited a mediator by CEDR many years ago and by the Institute of Arbitrators and Mediators Australia in 2006. I was accredited as an adjudicator many years ago by TeCSA, CIC, CIoB and more recently the government of the Northern Territory. As such, I have [https://feconslaw.wordpress.com/2015/10/21/the-mediation-albatros/#more-708 successfully] mediated or adjudicated many disputes in several jurisdictions.<br /> <br /> A member of the DRBF, I presently chair the Dispute Avoidance Board for the substantial Sydney Light Rail project.<br /> <br /> -----<br /> Articles on Designing Buildings Wiki by Robert Fenwick Elliott include:<br /> <br /> * [[Pendulum_arbitration|Pendulum arbitration]]. January 2016.<br /> * [[Pay_now_argue_later|Pay now argue later]]. January 2016.<br /> * [[2015_appointments_to_the_Irish_Construction_Contracts_Adjudication_Panel|2015 appointments to the Irish Construction Contracts Adjudication Panel]]. January 2016.</div>

Robert Fenwick Elliott https://www.designingbuildings.co.uk/wiki/User:Robert_Fenwick_Elliott 2016-01-23T08:50:04Z

<p>Robert Fenwick Elliott: </p> <hr /> <div>[[File:Keating_2015.jpg|200px|link=File:Keating_2015.jpg]]<br /> <br /> I am Robert Fenwick Elliott, a construction and energy lawyer now practising as a barrister. I now live near Adelaide, South Australia, but since November 2014 I have been an International Member of [http://www.keatingchambers.co.uk/home.aspx Keating Chambers] in London.<br /> <br /> One of the most experienced construction and energy lawyers in the common law world, I was the founder of [http://www.fenwickelliott.com/ Fenwick Elliott LLP] in London in 1980 and senior partner of that firm for 22 years. Having moved to Australia in a failed attempt to retire, I was a founding partner at [http://feg.com.au/ Fenwick Elliott Grace] in Adelaide until 2013, when I went to the [http://www.sabar.org.au/ independent bar].<br /> <br /> I am presently admitted in South Australia, New South Wales, the Federal Court of Australia.<br /> <br /> I have been involved – typically as lead lawyer – in the resolution of many disputes involving in aggregate many hundreds of millions of dollars. Most of these have been in the field of construction or engineering disputes.<br /> <br /> The projects have involved the construction of mining facilities, process plants, power stations, pipe lines and pumping stations, marine terminals, ships, FPSOs, harbours, dams, reservoirs, hospitals, factories, office buildings, shopping malls, hotels, housing developments, libraries, sports facilities, roads, rail, bridges, tunnels, security facilities and other types of structures. They have involved work in many jurisdictions, including Argentina, Brazil, Christmas Island, Egypt, England, Fiji, Hong Kong, India, Iran, Iraq, Jersey, Kenya, Lebanon, Libya, Malta, New South Wales, Queensland, Pakistan, Russia, Scotland, South Africa, South Australia, Spain, Syria, Ukraine, USA, Victoria, Wales, West Indies and Western Australia.<br /> <br /> I am a former chairman, then now vice president of [http://www.tecsa.org.uk/ TeCSA]. I am presently a board member of the [http://www.scl.org.au/ Society of Construction Law Australia].<br /> <br /> I was accredited a mediator by CEDR many years ago and by the Institute of Arbitrators and Mediators Australia in 2006. I was accredited as an adjudicator many years ago by TeCSA, CIC, CIoB and more recently the government of the Northern Territory. As such, I have [https://feconslaw.wordpress.com/2015/10/21/the-mediation-albatros/#more-708 successfully] mediated or adjudicated many disputes in several jurisdictions.<br /> <br /> A member of the DRBF, I presently chair the Dispute Avoidance Board for the substantial Sydney Light Rail project.<br /> <br /> Articles on Designing Buildings Wiki by Robert Fenwick Elliott include:<br /> <br /> * [[Pendulum_arbitration|Pendulum arbitration]]. January 2016.<br /> * [[Pay_now_argue_later|Pay now argue later]]. January 2016.<br /> * [[2015_appointments_to_the_Irish_Construction_Contracts_Adjudication_Panel|2015 appointments to the Irish Construction Contracts Adjudication Panel]]. January 2016.</div>

Robert Fenwick Elliott https://www.designingbuildings.co.uk/wiki/User:Robert_Fenwick_Elliott 2016-01-23T08:48:55Z

<p>Robert Fenwick Elliott: </p> <hr /> <div>[[File:Keating_2015.jpg|200px|link=File:Keating_2015.jpg]]<br /> <br /> I am Robert Fenwick Elliott, a construction and energy lawyer now practising as a barrister. I now live near Adelaide, South Australia, but since November 2014 I have been an International Member of [http://www.keatingchambers.co.uk/home.aspx Keating Chambers] in London.<br /> <br /> One of the most experienced construction and energy lawyers in the common law world, I was the founder of [http://www.fenwickelliott.com/ Fenwick Elliott LLP] in London in 1980 and senior partner of that firm for 22 years. Having moved to Australia in a failed attempt to retire, I was a founding partner at [http://feg.com.au/ Fenwick Elliott Grace] in Adelaide until 2013, when I went to the [http://www.sabar.org.au/ independent bar].<br /> <br /> I am presently admitted in South Australia, New South Wales, the Federal Court of Australia.<br /> <br /> I have been involved – typically as lead lawyer – in the resolution of many disputes involving in aggregate many hundreds of millions of dollars. Most of these have been in the field of construction or engineering disputes.<br /> <br /> The projects have involved the construction of mining facilities, process plants, power stations, pipe lines and pumping stations, marine terminals, ships, FPSOs, harbours, dams, reservoirs, hospitals, factories, office buildings, shopping malls, hotels, housing developments, libraries, sports facilities, roads, rail, bridges, tunnels, security facilities and other types of structures. They have involved work in many jurisdictions, including Argentina, Brazil, Christmas Island, Egypt, England, Fiji, Hong Kong, India, Iran, Iraq, Jersey, Kenya, Lebanon, Libya, Malta, New South Wales, Queensland, Pakistan, Russia, Scotland, South Africa, South Australia, Spain, Syria, Ukraine, USA, Victoria, Wales, West Indies and Western Australia.<br /> <br /> I am a former chairman, then now vice president of [http://www.tecsa.org.uk/ TeCSA]. I am presently a board member of the [http://www.scl.org.au/ Society of Construction Law Australia].<br /> <br /> I was accredited a mediator by CEDR many years ago and by the Institute of Arbitrators and Mediators Australia in 2006. I was accredited as an adjudicator many years ago by TeCSA, CIC, CIoB and more recently the government of the Northern Territory. As such, I have [https://feconslaw.wordpress.com/2015/10/21/the-mediation-albatros/#more-708 successfully] mediated or adjudicated many disputes in several jurisdictions.<br /> <br /> A member of the DRBF, I presently chair the Dispute Avoidance Board for the substantial Sydney Light Rail project.<br /> <br /> Articles on Designing Buildings Wiki by Robert Fenwick Elliott include:<br /> <br /> * Pendulum arbitration. January 2016.<br /> * Pay now argue later. January 2016.<br /> * 2015 appointments to the Irish Construction Contracts Adjudication Panel. January 2016.</div>

Robert Fenwick Elliott https://www.designingbuildings.co.uk/wiki/2015_appointments_to_the_Irish_Construction_Contracts_Adjudication_Panel 2016-01-23T08:45:59Z

<p>Robert Fenwick Elliott: </p> <hr /> <div>On 15 January 2016, the [http://www.irisoifigiuil.ie/currentissues/IR150116-2.pdf Iris Oifigiúil] (the Irish State Gazette) published a list of the Construction Contracts Adjudication Panel, newly-appointed for the next 5 years. It suggests that Ireland might be moving towards commencement of its Construction Contracts Act 2013. Interestingly, about 1/3 of the panel is based outside the Republic of Ireland – mostly England but a couple from Northern Ireland and one from Scotland.<br /> <br /> It is tempting for small jurisdictions to be parochial, but experience from all sorts of disciples benefits from exposure to a certain amount of outside influence. Ireland has perhaps the best drafted construction adjudication law in the world – it is time it is deployed.<br /> <br /> These appointments are for the period commencing on the 8th December, 2015 and ending on the 7th December, 2020:<br /> <br /> * Mr. Timothy Bouchier-Hayes<br /> * Mr. Ciaran Fahy<br /> * Mr. Bernard Gogarty<br /> * Mr. James O’Donoghue<br /> * Mr. Conor Kelly<br /> * Mr. James Bridgeman<br /> * Mr. Gerard O’Sullivan<br /> * Mr. Joe Behan<br /> * Mr. John Redmond<br /> * Mr. Matthew Molloy<br /> * Dr. John Derek Ross<br /> * Mr. John Lyden<br /> * Mr. Tony Reddy<br /> * Mr. John Thomas Gibbons<br /> * Mr. Toal Ó Muiré<br /> * Mr. Anthony Bingham<br /> * Mr. Jonathan Cope<br /> * Mr. Kevin Brady<br /> * Mr. David O’Leary<br /> * Mr. Gerard Monaghan<br /> * Mr. James Golden<br /> * Mr. Raymond Nash<br /> * Mr. Conor Hogan<br /> * Mr. John Riches<br /> * Mr. Len Bunton<br /> * Mr. John Costello<br /> * Mr. Nigel Davies<br /> * Mr. Simon McKenny<br /> * Mr. Niall Lawless<br /> * Mr. Niall Meagher<br /> <br /> -----<br /> The original version of this article can be seen at [https://feconslaw.wordpress.com/2016/01/19/irish-ayes/#more-806 Irish Ayes] Posted on 19/01/2016 by Robert Fenwick Elliott.<br /> <br /> --[[User:Robert_Fenwick_Elliott|Robert Fenwick Elliott]] 08:44, 23 Jan 2016 (BST)<br /> <br /> = Find out more =<br /> <br /> === Related Articles on Designing Buildings Wiki ===<br /> <br /> * Adjudication.<br /> * Alternative dispute resolution.<br /> * Arbitration.<br /> * Conciliation<br /> * Contract claims.<br /> * Contract conditions.<br /> * Dispute resolution board.<br /> * Pay now argue later.<br /> * Pendulum arbitration.<br /> * Mediation.<br /> * The Housing Grants, Construction and Regeneration Act.<br /> * Scheme for Construction Contracts.<br /> <br /> [[Category:International]]</div>

Robert Fenwick Elliott https://www.designingbuildings.co.uk/wiki/2015_appointments_to_the_Irish_Construction_Contracts_Adjudication_Panel 2016-01-23T08:44:19Z

<p>Robert Fenwick Elliott: Created page with &quot;On 15 January 2016, the [http://www.irisoifigiuil.ie/currentissues/IR150116-2.pdf Iris Oifigiúil] (the Irish State Gazette) published a list of the Construction Contracts Adjudi...&quot;</p> <hr /> <div>On 15 January 2016, the [http://www.irisoifigiuil.ie/currentissues/IR150116-2.pdf Iris Oifigiúil] (the Irish State Gazette) published a list of the Construction Contracts Adjudication Panel newly-appointed for the next 5 years. It suggests that Ireland might be moving towards commencement of its Construction Contracts Act 2013. Interestingly, about 1/3 of the panel is based outside the Republic of Ireland – mostly England but a couple from Northern Ireland and one from Scotland.<br /> <br /> It is tempting for small jurisdictions to be parochial, but experience from all sorts of disciples benefits from exposure to a certain amount of outside influence. Ireland has perhaps the best drafted construction adjudication law in the world – it is time it is deployed.<br /> <br /> These appointments are for the period commencing on the 8th December, 2015 and ending on the 7th December, 2020.<br /> <br /> * Mr. Timothy Bouchier-Hayes<br /> * Mr. Ciaran Fahy<br /> * Mr. Bernard Gogarty<br /> * Mr. James O’Donoghue<br /> * Mr. Conor Kelly<br /> * Mr. James Bridgeman<br /> * Mr. Gerard O’Sullivan<br /> * Mr. Joe Behan<br /> * Mr. John Redmond<br /> * Mr. Matthew Molloy<br /> * Dr. John Derek Ross<br /> * Mr. John Lyden<br /> * Mr. Tony Reddy<br /> * Mr. John Thomas Gibbons<br /> * Mr. Toal Ó Muiré<br /> * Mr. Anthony Bingham<br /> * Mr. Jonathan Cope<br /> * Mr. Kevin Brady<br /> * Mr. David O’Leary<br /> * Mr. Gerard Monaghan<br /> * Mr. James Golden<br /> * Mr. Raymond Nash<br /> * Mr. Conor Hogan<br /> * Mr. John Riches<br /> * Mr. Len Bunton<br /> * Mr. John Costello<br /> * Mr. Nigel Davies<br /> * Mr. Simon McKenny<br /> * Mr. Niall Lawless<br /> * Mr. Niall Meagher<br /> <br /> -----<br /> The original version of this article can be seen at [https://feconslaw.wordpress.com/2016/01/19/irish-ayes/#more-806 Irish Ayes] Posted on 19/01/2016 by Robert Fenwick Elliott.<br /> <br /> --[[User:Robert Fenwick Elliott|Robert Fenwick Elliott]] 08:44, 23 Jan 2016 (BST)<br /> <br /> = Find out more =<br /> <br /> === Related Articles on Designing Buildings Wiki ===<br /> <br /> * Adjudication.<br /> * Alternative dispute resolution.<br /> * Arbitration.<br /> * Conciliation<br /> * Contract claims.<br /> * Contract conditions.<br /> * Dispute resolution board.<br /> * Pay now argue later.<br /> * Pendulum arbitration.<br /> * Mediation.<br /> * The Housing Grants, Construction and Regeneration Act.<br /> * Scheme for Construction Contracts.<br /> <br /> [[Category:International]]</div>

Robert Fenwick Elliott https://www.designingbuildings.co.uk/wiki/User:Robert_Fenwick_Elliott 2016-01-15T03:43:20Z

<p>Robert Fenwick Elliott: </p> <hr /> <div>[[File:Keating_2015.jpg|200px|link=File:Keating_2015.jpg]]<br /> <br /> I am Robert Fenwick Elliott, a construction and energy lawyer now practising as a barrister. I now live near Adelaide, South Australia, but since November 2014 I have been an International Member of [http://www.keatingchambers.co.uk/home.aspx Keating Chambers] in London.<br /> <br /> One of the most experienced construction and energy lawyers in the common law world, I was the founder of [http://www.fenwickelliott.com/ Fenwick Elliott LLP] in London in 1980 and senior partner of that firm for 22 years. Having moved to Australia in a failed attempt to retire, I was a founding partner at [http://feg.com.au/ Fenwick Elliott Grace] in Adelaide until 2013, when I went to the [http://www.sabar.org.au/ independent bar].<br /> <br /> I am presently admitted in South Australia, New South Wales, the Federal Court of Australia.<br /> <br /> I have been involved – typically as lead lawyer – in the resolution of many disputes involving in aggregate many hundreds of millions of dollars. Most of these have been in the field of construction or engineering disputes.<br /> <br /> The projects have involved the construction of mining facilities, process plants, power stations, pipe lines and pumping stations, marine terminals, ships, FPSOs, harbours, dams, reservoirs, hospitals, factories, office buildings, shopping malls, hotels, housing developments, libraries, sports facilities, roads, rail, bridges, tunnels, security facilities and other types of structures. They have involved work in many jurisdictions, including Argentina, Brazil, Christmas Island, Egypt, England, Fiji, Hong Kong, India, Iran, Iraq, Jersey, Kenya, Lebanon, Libya, Malta, New South Wales, Queensland, Pakistan, Russia, Scotland, South Africa, South Australia, Spain, Syria, Ukraine, USA, Victoria, Wales, West Indies and Western Australia.<br /> <br /> I am a former chairman, then now vice president of [http://www.tecsa.org.uk/ TeCSA]. I am presently a board member of the [http://www.scl.org.au/ Society of Construction Law Australia].<br /> <br /> I was accredited a mediator by CEDR many years ago and by the Institute of Arbitrators and Mediators Australia in 2006. I was accredited as an adjudicator many years ago by TeCSA, CIC, CIoB and more recently the government of the Northern Territory. As such, I have [https://feconslaw.wordpress.com/2015/10/21/the-mediation-albatros/#more-708 successfully] mediated or adjudicated many disputes in several jurisdictions.<br /> <br /> A member of the DRBF, I presently chair the Dispute Avoidance Board for the substantial Sydney Light Rail project.</div>

Robert Fenwick Elliott https://www.designingbuildings.co.uk/wiki/User:Robert_Fenwick_Elliott 2016-01-15T02:54:17Z

<p>Robert Fenwick Elliott: </p> <hr /> <div>[[File:Keating 2015.jpg|200px]]<br /> <br /> I am Robert Fenwick Elliott, a construction and energy lawyer now practising as a barrister. I now live near Adelaide, South Australia, but since November 2014 I have been an International Member of [http://www.keatingchambers.co.uk/home.aspx Keating Chambers] in London.<br /> <br /> One of the most experienced construction and energy lawyers in the common law world, I was the founder of [http://www.fenwickelliott.com/ Fenwick Elliott LLP] in London in 1980 and senior partner of that firm for 22 years. Having moved to Australia in a failed attempt to retire, I was a founding partner at [http://feg.com.au/ Fenwick Elliott Grace] in Adelaide until 2013, when I went to the [http://www.sabar.org.au/ independent bar].<br /> <br /> I am presently admitted in South Australia, New South Wales, the Federal Court of Australia.<br /> <br /> I have been involved – typically as lead lawyer – in the resolution of many disputes involving in aggregate many hundreds of millions of dollars. Most of these have been in the field of construction or engineering disputes.<br /> <br /> The projects have involved the construction of mining facilities, process plants, power stations, pipe lines and pumping stations, marine terminals, ships, FPSOs, harbours, dams, reservoirs, hospitals, factories, office buildings, shopping malls, hotels, housing developments, libraries, sports facilities, roads, rail, bridges, tunnels, security facilities and other types of structures. They have involved work in many jurisdictions, including Argentina, Brazil, Christmas Island, Egypt, England, Fiji, Hong Kong, India, Iran, Iraq, Jersey, Kenya, Lebanon, Libya, Malta, New South Wales, Queensland, Pakistan, Russia, Scotland, South Africa, South Australia, Spain, Syria, Ukraine, USA, Victoria, Wales, West Indies and Western Australia.<br /> <br /> I am a former chairman, then now vice president of [http://www.tecsa.org.uk/ TeCSA]. I am presently a board member of the Society of Construction Law Australia.<br /> <br /> The International Construction Law Alliance is a grouping of construction law specialist firms around the world of which I was the founder Chairman.<br /> <br /> I was accredited a mediator by the Institute of Arbitrators and Mediators Australia in November 2006.</div>

Robert Fenwick Elliott https://www.designingbuildings.co.uk/wiki/File:Keating_2015.jpg 2016-01-15T02:49:56Z

<p>Robert Fenwick Elliott: Keating Chambers logo</p> <hr /> <div>Keating Chambers logo</div>

Robert Fenwick Elliott https://www.designingbuildings.co.uk/wiki/User:Robert_Fenwick_Elliott 2016-01-15T02:48:34Z

<p>Robert Fenwick Elliott: </p> <hr /> <div>I am Robert Fenwick Elliott, a construction and energy lawyer now practising as a barrister. I now live near Adelaide, South Australia, but since November 2014 I have been an International Member of [http://www.keatingchambers.co.uk/home.aspx Keating Chambers] in London.<br /> <br /> One of the most experienced construction and energy lawyers in the common law world, I was the founder of [http://www.fenwickelliott.com/ Fenwick Elliott LLP] in London in 1980 and senior partner of that firm for 22 years. Having moved to Australia in a failed attempt to retire, I was a founding partner at [http://feg.com.au/ Fenwick Elliott Grace] in Adelaide until 2013, when I went to the [http://www.sabar.org.au/ independent bar].<br /> <br /> I am presently admitted in South Australia, New South Wales, the Federal Court of Australia.<br /> <br /> I have been involved – typically as lead lawyer – in the resolution of many disputes involving in aggregate many hundreds of millions of dollars. Most of these have been in the field of construction or engineering disputes.<br /> <br /> The projects have involved the construction of mining facilities, process plants, power stations, pipe lines and pumping stations, marine terminals, ships, FPSOs, harbours, dams, reservoirs, hospitals, factories, office buildings, shopping malls, hotels, housing developments, libraries, sports facilities, roads, bridges, tunnels, security facilities and other types of structures. They have involved work in many jurisdictions, including Argentina, Brazil, Christmas Island, Egypt, England, Fiji, Hong Kong, India, Iran, Iraq, Jersey, Kenya, Lebanon, Libya, Malta, New South Wales, Queensland, Pakistan, Russia, Scotland, South Africa, South Australia, Spain, Syria, Ukraine, USA, Victoria, Wales, West Indies and Western Australia.<br /> <br /> I am a former chairman, and now vice president of TeCSA, the Technology and Construction Solicitors Association. Based in London, this is an association including almost all the solicitors in England and Wales who specialise in construction work.<br /> <br /> I am a board member of the Society of Construction Law Australia.<br /> <br /> The International Construction Law Alliance is a grouping of construction law specialist firms around the world of which I was the founder Chairman.<br /> <br /> I was accredited a mediator by the Institute of Arbitrators and Mediators Australia in November 2006.</div>

Robert Fenwick Elliott https://www.designingbuildings.co.uk/wiki/User:Robert_Fenwick_Elliott 2016-01-15T02:46:30Z

<p>Robert Fenwick Elliott: </p> <hr /> <div>I am Robert Fenwick Elliott, a construction and energy lawyer now practising as a barrister. I now live near Adelaide, South Australia, but since November 2014 I have been an International Member of [http://www.keatingchambers.co.uk/home.aspx Keating Chambers] in London.<br /> <br /> One of the most experienced construction and energy lawyers in the common law world, I was the founder of [http://www.fenwickelliott.com/ Fenwick Elliott LLP] in London in 1980 and senior partner of that form for 22 years. Having moved to Australia in a failed attempt to retire, I was a founding partner at Fenwick Elliott Grace in Adelaide until 2013, when I went to the independent bar.<br /> <br /> I am admitted in South Australia, New South Wales, the Federal Court of Australia and England.<br /> <br /> I have been involved – typically as lead lawyer – in the resolution of many disputes involving in aggregate many hundreds of millions of dollars. Most of these have been in the field of construction or engineering disputes.<br /> <br /> The projects have involved the construction of mining facilities, process plants, power stations, pipe lines and pumping stations, marine terminals, ships, FPSOs, harbours, dams, reservoirs, hospitals, factories, office buildings, shopping malls, hotels, housing developments, libraries, sports facilities, roads, bridges, tunnels, security facilities and other types of structures. They have involved work in many jurisdictions, including Argentina, Brazil, Christmas Island, Egypt, England, Fiji, Hong Kong, India, Iran, Iraq, Jersey, Kenya, Lebanon, Libya, Malta, New South Wales, Queensland, Pakistan, Russia, Scotland, South Africa, South Australia, Spain, Syria, Ukraine, USA, Victoria, Wales, West Indies and Western Australia.<br /> <br /> I am a former chairman, and now vice president of TeCSA, the Technology and Construction Solicitors Association. Based in London, this is an association including almost all the solicitors in England and Wales who specialise in construction work.<br /> <br /> I am a board member of the Society of Construction Law Australia.<br /> <br /> The International Construction Law Alliance is a grouping of construction law specialist firms around the world of which I was the founder Chairman.<br /> <br /> I was accredited a mediator by the Institute of Arbitrators and Mediators Australia in November 2006.</div>

Robert Fenwick Elliott https://www.designingbuildings.co.uk/wiki/User:Robert_Fenwick_Elliott 2016-01-15T02:44:28Z

<p>Robert Fenwick Elliott: </p> <hr /> <div>I am Robert Fenwick Elliott, a construction and energy lawyer now practising as a barrister. I now live near Adelaide, South Australia, but since November 2014 I have been an International Member of [http://www.keatingchambers.co.uk/home.aspx Keating Chambers] in London.<br /> <br /> One of the most experienced construction and energy lawyers in the common law world, I was the founder of Fenwick Elliott LLP in London in 1980, and was a partner at Fenwick Elliott Grace in Adelaide until 2013, when I went to the independent bar.<br /> <br /> I am admitted in South Australia, New South Wales, the Federal Court of Australia and England.<br /> <br /> I have been involved – typically as lead lawyer – in the resolution of many disputes involving in aggregate many hundreds of millions of dollars. Most of these have been in the field of construction or engineering disputes.<br /> <br /> The projects have involved the construction of mining facilities, process plants, power stations, pipe lines and pumping stations, marine terminals, ships, FPSOs, harbours, dams, reservoirs, hospitals, factories, office buildings, shopping malls, hotels, housing developments, libraries, sports facilities, roads, bridges, tunnels, security facilities and other types of structures. They have involved work in many jurisdictions, including Argentina, Brazil, Christmas Island, Egypt, England, Fiji, Hong Kong, India, Iran, Iraq, Jersey, Kenya, Lebanon, Libya, Malta, New South Wales, Queensland, Pakistan, Russia, Scotland, South Africa, South Australia, Spain, Syria, Ukraine, USA, Victoria, Wales, West Indies and Western Australia.<br /> <br /> I am a former chairman, and now vice president of TeCSA, the Technology and Construction Solicitors Association. Based in London, this is an association including almost all the solicitors in England and Wales who specialise in construction work.<br /> <br /> I am a board member of the Society of Construction Law Australia.<br /> <br /> The International Construction Law Alliance is a grouping of construction law specialist firms around the world of which I was the founder Chairman.<br /> <br /> I was accredited a mediator by the Institute of Arbitrators and Mediators Australia in November 2006.</div>

Robert Fenwick Elliott https://www.designingbuildings.co.uk/wiki/Pendulum_arbitration 2016-01-14T11:47:15Z

<p>Robert Fenwick Elliott: </p> <hr /> <div>Trial in a court of law is an inefficient way of deciding complex construction disputes. Although in theory more flexible, a conventional hearing in an arbitration is hardly any better, and some would say even worse.<br /> <br /> In many cases, it is possible to resolve disputes by some sort of intermediate process, either on a non-binding basis like mediation or review board, or on a 'pay now, argue later' basis, such as adjudication. But sometimes, the dynamic between the parties is such that a binding and final determination is required.<br /> <br /> Is there an alternative? Well there is actually - pendulum arbitration. Or as the Americans sometimes call it, ‘baseball arbitration’. Or sometimes ‘flip-flop arbitration’. Or even, less obviously, ‘last best offer arbitration'. It is not new, but it is much faster and cheaper than conventional arbitration, and just as binding.<br /> <br /> Here is how it works. There is a hearing, at which the parties put their respective cases. For reasons that will become apparent, this hearing can be much shorter than the sort of hearing that would normally be necessary. It can be run on a chess clock basis. Then, at the end of the hearing, each side delivers a draft award to the arbitrator in a sealed envelope. The arbitrator then has to make their award in the form of one of those drafts, without any amendment.<br /> <br /> Why is it so effective? It is not hard to see. The more ambitious a party’s draft award, the less likely it is to be chosen by the arbitrator. And so parties are driven to put in relatively reasonable drafts. And if you know as a party’s lawyer that you are just about to put in a relatively reasonable draft, that affects your case preparation and advocacy: there is no point advocating for an extreme position which you are then promptly going to abandon in the draft award. And so, for the purpose of advocacy all of those barely arguable points which are unlikely to succeed, but which tend to get trotted out in full-scale litigation or arbitration on the ‘no stone unturned’ principle, do not get trotted out.<br /> <br /> From the arbitrator’s point of view, the whole thing is delightfully simple. A conventional arbitration requires the arbitrator to build their award from the ground up, taking account of, and evaluating every argument and every entitlement. In pendulum arbitration, all they have to do is decide which of the two drafts more closely reflects their view of the justice of the matter. The moment they have done that, they can pretty much stop work: all they have to do is to sign whichever of the drafts they prefer. It means that the time between the conclusion of the hearing and the delivery of the award can be very much shorter than in a conventional case.<br /> <br /> The procedure is not used nearly as much as it might be. Some might regard the whole procedure is rather radical. But it is not unheard of, and in NSW Racing v Tab the courts endorsed the process. And whatever one’s view about it, it has the undeniable merit of making the arbitration much more commercially acceptable in terms of the time and cost of the legal process.<br /> <br /> Further, there is a particular place for the process in cases where the parties have attempted mediation but have been unable finally to close the gap between them. In these circumstances, one option (often a good one) is for the parties to agree to appoint the mediator as an arbitrator on a pendulum arbitration basis, and on the basis that the draft awards are constrained by the parameters of where the parties had got to in the mediation process. The attraction of the process to the parties in those circumstances can be compelling. Obviously, each party would prefer not to budge from its best offer in the mediation, but the prospect of resolving the matter within the parameters of the negotiating positions is likely to be far preferable to the risk of going to conventional trial, its hugely greater legal cost and with the risk of a much less attractive result.<br /> <br /> So, which is better for the parties: the bottomless pit of legal expense or a pendulum arbitration? There is lot to be said for the pendulum.<br /> <br /> -----<br /> A longer version of this article can be seen at [https://feconslaw.wordpress.com/2015/11/30/the-pit-or-the-pendulum/#more-726 The Pit or the Pendulum] 30/11/2015 by Robert Fenwick Elliott.<br /> <br /> --[[User:Robert_Fenwick_Elliott|Robert Fenwick Elliott]] 11:40, 14 Jan 2016 (BST)<br /> <br /> = Find out more =<br /> <br /> === Related articles on Designing Buildings Wiki ===<br /> <br /> * Adjudication.<br /> * Alternative dispute resolution.<br /> * Arbitration.<br /> * Arbitration Act.<br /> * Breach of contract.<br /> * Causes of construction disputes.<br /> * Conciliation.<br /> * Contract claims.<br /> * Dispute resolution boards.<br /> * Mediation.<br /> <br /> [[Category:Property_law]]</div>

Robert Fenwick Elliott https://www.designingbuildings.co.uk/wiki/Last_best_offer_arbitration 2016-01-14T11:42:45Z

<p>Robert Fenwick Elliott: Redirected page to Pendulum arbitration</p> <hr /> <div>#redirect:[[Pendulum_arbitration|Pendulum arbitration]]</div>

Robert Fenwick Elliott https://www.designingbuildings.co.uk/wiki/Pendulum_arbitration 2016-01-14T11:42:22Z

<p>Robert Fenwick Elliott: </p> <hr /> <div>Trial in a court of law is an inefficient way of deciding complex construction disputes. Although in theory more flexible, a conventional hearing in an arbitration is hardly any better, and some would say even worse.<br /> <br /> In many cases, it is possible to resolve disputes by some sort of intermediate process, either on a non-binding basis like mediation or review board, or on a “pay now, argue later” basis, such as adjudication. But sometimes, the dynamic between the parties is such that a binding and final determination is required.<br /> <br /> Is there an alternative? Well there is, actually. It is pendulum arbitration. Or as the Americans sometimes call it, ‘baseball arbitration’. Or sometimes ‘flip-flop arbitration’. Or even, less obviously, ‘last best offer arbitration'. It is not new, but it is much faster and cheaper than conventional arbitration, and just as binding.<br /> <br /> Here is how it works. There is a hearing, at which the parties put their respective cases. For reasons will become apparent, this hearing can be much shorter than the sort of hearing that would normally be necessary. It can be run on a chess clock basis. Then, at the end of the hearing, each side delivers a draft award to the arbitrator in a sealed envelope. The arbitrator then has to make their award in the form of one of those drafts, without any amendment.<br /> <br /> Why is it so effective? It is not hard to see. The more ambitious a party’s draft award, the less likely it is to be chosen by the arbitrator. And so parties are driven to put in relatively reasonable drafts. And if you know as a party’s lawyer that you are just about to put in a relatively reasonable draft, that affects your case preparation and advocacy: there is no point advocating for an extreme position which you are then promptly going to abandon in the draft award. And so, for the purpose of advocacy all of those barely arguable points which are unlikely to succeed, but which tend to get trotted out in full-scale litigation or arbitration on the ‘no stone unturned’ principle, do not get trotted out.<br /> <br /> From the arbitrator’s point of view, the whole thing is delightfully simple. A conventional arbitration requires the arbitrator to build their award from the ground up, taking account of, and evaluating every argument and every entitlement. In pendulum arbitration, all they have to do is decide which of the two drafts more closely reflects their view of the justice of the matter. The moment they have done that, they can pretty much stop work: all they have to do is to sign whichever of the drafts they prefer. It means that the time between the conclusion of the hearing and the delivery of the award can be very much shorter than in a conventional case.<br /> <br /> The procedure is not used nearly as much as it might be. Some might regard the whole procedure is rather radical. But it is not unheard of, and in NSW Racing v Tab the courts endorsed the process. And whatever one’s view about it, it has the undeniable merit of making the arbitration much more commercially acceptable in terms of the time and cost of the legal process.<br /> <br /> Further, there is a particular place for the process in cases where the parties have attempted mediation but have been unable finally to close the gap between them. In these circumstances, one option (often a good one) is for the parties to agree to appoint the mediator as an arbitrator on a pendulum arbitration basis, and on the basis that the draft awards are constrained by the parameters of where the parties had got to in the mediation process. The attraction of the process to the parties in those circumstances can be compelling. Obviously, each party would prefer not to budge from its best offer in the mediation, but the prospect of resolving the matter within the parameters of the negotiating positions is likely to be far preferable to the risk of going to conventional trial, its hugely greater legal cost and with the risk of a much less attractive result.<br /> <br /> So, which is better for the parties: the bottomless pit of legal expense or a pendulum arbitration? There is lot to be said for the pendulum.<br /> <br /> -----<br /> A longer version of this article can be seen at [https://feconslaw.wordpress.com/2015/11/30/the-pit-or-the-pendulum/#more-726 The Pit or the Pendulum] 30/11/2015 by Robert Fenwick Elliott.<br /> <br /> --[[User:Robert_Fenwick_Elliott|Robert Fenwick Elliott]] 11:40, 14 Jan 2016 (BST)<br /> <br /> = Find out more =<br /> <br /> === Related articles on Designing Buildings Wiki ===<br /> <br /> * Adjudication.<br /> * Alternative dispute resolution.<br /> * Arbitration.<br /> * Arbitration Act.<br /> * Breach of contract.<br /> * Causes of construction disputes.<br /> * Conciliation.<br /> * Contract claims.<br /> * Dispute resolution boards.<br /> * Mediation.<br /> <br /> [[Category:Property_law]]</div>

Robert Fenwick Elliott https://www.designingbuildings.co.uk/wiki/Flip-flop_arbitration 2016-01-14T11:41:55Z

<p>Robert Fenwick Elliott: Redirected page to Pendulum arbitration</p> <hr /> <div>#redirect:[[Pendulum_arbitration|Pendulum arbitration]]</div>

Robert Fenwick Elliott https://www.designingbuildings.co.uk/wiki/Baseball_arbitration 2016-01-14T11:41:24Z

<p>Robert Fenwick Elliott: Redirected page to Pendulum arbitration</p> <hr /> <div>#redirect:[[Pendulum_arbitration|Pendulum arbitration]]</div>

Robert Fenwick Elliott https://www.designingbuildings.co.uk/wiki/Pendulum_arbitration 2016-01-14T11:40:11Z

<p>Robert Fenwick Elliott: </p> <hr /> <div>Trial in a court of law is an inefficient way of deciding complex construction disputes. Although in theory more flexible, a conventional hearing in an arbitration is hardly any better, and some would say even worse.<br /> <br /> In many cases, it is possible to resolve disputes by some sort of intermediate process, either on a non-binding basis like mediation or review board, or on a “pay now, argue later” basis, such as adjudication. But sometimes, the dynamic between the parties is such that a binding and final determination is required.<br /> <br /> Is there an alternative? Well there is, actually. It is pendulum arbitration. Or as the Americans sometimes call it, ‘baseball arbitration’. Or sometimes ‘flip-flop arbitration’. Or even, less obviously, ‘last best offer’ arbitration. It is not new, but it is much faster and cheaper than conventional arbitration, and just as binding.<br /> <br /> Here is how it works. There is a hearing, at which the parties put their respective cases. For reasons will become apparent, this hearing can be much shorter than the sort of hearing that would normally be necessary. It can be run on a chess clock basis. Then, at the end of the hearing, each side delivers a draft award to the arbitrator in a sealed envelope. The arbitrator then has to make their award in the form of one of those drafts, without any amendment.<br /> <br /> Why is it so effective? It is not hard to see. The more ambitious a party’s draft award, the less likely it is to be chosen by the arbitrator. And so parties are driven to put in relatively reasonable drafts. And if you know as a party’s lawyer that you are just about to put in a relatively reasonable draft, that affects your case preparation and advocacy: there is no point advocating for an extreme position which you are then promptly going to abandon in the draft award. And so, for the purpose of advocacy all of those barely arguable points which are unlikely to succeed, but which tend to get trotted out in full-scale litigation or arbitration on the ‘no stone unturned’ principle, do not get trotted out.<br /> <br /> From the arbitrator’s point of view, the whole thing is delightfully simple. A conventional arbitration requires the arbitrator to build their award from the ground up, taking account of, and evaluating every argument and every entitlement. In pendulum arbitration, all they have to do is decide which of the two drafts more closely reflects their view of the justice of the matter. The moment they have done that, they can pretty much stop work: all they have to do is to sign whichever of the drafts they prefer. It means that the time between the conclusion of the hearing and the delivery of the award can be very much shorter than in a conventional case.<br /> <br /> The procedure is not used nearly as much as it might be. Some might regard the whole procedure is rather radical. But it is not unheard of, and in NSW Racing v Tab the courts endorsed the process. And whatever one’s view about it, it has the undeniable merit of making the arbitration much more commercially acceptable in terms of the time and cost of the legal process.<br /> <br /> Further, there is a particular place for the process in cases where the parties have attempted mediation but have been unable finally to close the gap between them. In these circumstances, one option (often a good one) is for the parties to agree to appoint the mediator as an arbitrator on a pendulum arbitration basis, and on the basis that the draft awards are constrained by the parameters of where the parties had got to in the mediation process. The attraction of the process to the parties in those circumstances can be compelling. Obviously, each party would prefer not to budge from its best offer in the mediation, but the prospect of resolving the matter within the parameters of the negotiating positions is likely to be far preferable to the risk of going to conventional trial, its hugely greater legal cost and with the risk of a much less attractive result.<br /> <br /> So, which is better for the parties: the bottomless pit of legal expense or a pendulum arbitration? There is lot to be said for the pendulum.<br /> <br /> -----<br /> A longer version of this article can be seen at [https://feconslaw.wordpress.com/2015/11/30/the-pit-or-the-pendulum/#more-726 The Pit or the Pendulum] 30/11/2015 by Robert Fenwick Elliott.<br /> <br /> --[[User:Robert Fenwick Elliott|Robert Fenwick Elliott]] 11:40, 14 Jan 2016 (BST)<br /> <br /> = Find out more =<br /> <br /> === Related articles on Designing Buildings Wiki ===<br /> <br /> * Adjudication.<br /> * Alternative dispute resolution.<br /> * Arbitration.<br /> * Arbitration Act.<br /> * Breach of contract.<br /> * Causes of construction disputes.<br /> * Conciliation.<br /> * Contract claims.<br /> * Dispute resolution boards.<br /> * Mediation.<br /> <br /> [[Category:Property_law]]</div>

Robert Fenwick Elliott