Global: The Royal Institution of Chartered Surveyors (RICS) launched a new arbitration service for construction and engineering disputes, offering a: – – Fast track arbitration service for disputes under GBP 100,000, which caps the parties’ recoverable costs and limits the amount that arbitrators can charge. The award must be published within six months – – Select arbitration service, aimed at providing a “viable alternative” to the Technology and Construction Court (TCC) for high value, complex disputes. The award should be published within 12 months In announcing the new service, Martin Burns, Head of ADR Research and Development (RICS) explained that there is “growing demand for more comprehensive deliberation of issues” than is currently provided by statutory adjudication, which can lead to rough justice, especially in high value and complex disputes that are unsuitable for such a rapid process. Australia: In October 2015 the Queensland Building and Construction Commission released its Annual Report which, as a consequence of previous amendments made to the Building and Construction Industry Payments Act 2004 (Qld) (which essentially replaced authorised nominating authorities with the QBCC), allowed it to provide detailed statistics on the use of the Act in Queensland. This established a total value of adjudication claims for the 2014/2015 financial year of AUD 2,085,015,904 and an average claim value of AUD 2,928,393. The 2014 amendments provided for increased times to respond to adjudication professional fees (as well as a further sumof approx. GBP 100,000 in interest). Very late in the project, McBains advised that therewere insufficient funds in the facility to complete the development, leading Lloyds to call in the loan. The borrower was unable to repay the money, and the propertywas sold, leading to losses of GBP 1.4million for Lloyds which it sought to claim fromMcBains. The court held that McBains was in breach of its duty by failing to advise that therewas not enoughmoney to complete theworks, and that some of themoneywas being used to carry out certainworks which did not formpart of the agreed development. Although it held that McBains bore ‘the lion’s share of responsibility’ for the losses suffered by the bank, the judge found that the insufficiency of the facility to cover the development was known by the relevant individual at Lloyds. Further, the bank had failed to share informationwith its project monitor or respond appropriately to reports. Accordingly, the bank’s own failingsmeant it should bear a third of the losses itself. The case provides a good example of the problems that can arise if a bank fails properly to manage its relationship with its project monitor, effectively removing all or part of the safety net the latter is supposed to provide.
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