Page 241 - Civil Engineering Project Management, Fourth Edition

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Variations and claims
concerning a contractor’s claim, nor does he have to make a decision on a
claim, which does not give ‘full and detailed particulars of the amount claimed’
(Clause 53(4) and (6)). However, once the engineer finds some payment due in
respect of a claim he must certify this payment in the next interim payment to
the contractor.
If the engineer decides that some payment is due to a contractor but unrea-
sonably fails to certify it in the next certificate; or if the employer fails to pay part
or all of an amount certified for payment by the engineer, the employer has to
pay to the contractor ‘interest compounded monthly for each day on which
the payment is overdue or which should have been certified’ (Clause 60(7)). The
same clause provides that should a matter in dispute go to arbitration, and ‘the
arbitrator holds that any sum or additional sum should have been certified by
a particular date’ then interest will be payable on it, starting from 28 days after
the engineer should have certified the sum. The rate stipulated is 2 per cent
above the base lending rate of the bank specified in the Appendix to tender.
It should be noted that this interest is only applicable following a failure by
the employer or the engineer. There is no general provision that interest is due
for any gap in time between the costs being incurred and an amount being
included in a certificate; much less so if any delay is due to a contractor failing
to supply details of his claim.

17.14 Adjudication

The Housing Grants Construction and Regeneration Act, 1996, (see Section 1.6)
introduced for the first time in English Law a requirement that all construction
contracts must include certain terms. These include payment provisions as set
out in Section 1.6 and also provisions to allow either party to take any dispute to
adjudication at any time. Most standard conditions were immediately amended
to comply with the law, but for those, which were not so amended, the provi-
sions of The Scheme for Construction Contracts Regulations 1998 will apply. The
provisions of the Act apply to all construction works and work associated with
construction in the UK such as architecture, design and surveying. There are
some limited exceptions such as drilling for oil or gas, supply of materials and
erection of machinery as set out in the Act but in effect most construction
contracts and related consultancy agreements will be included.
The provisions of the Act require that should a dispute arise under the con-
tract then this dispute can be referred to adjudication at any time and appoint-
ment of an adjudicator must follow within 7 days. The adjudicator must act
impartially and is given wide powers to ascertain the facts and the law. He must
reach his decision within 28 days or a longer period if agreed by both parties.
This period is seen by some as too short for major and complex disputes but
appears to have worked well in practice for straightforward matters including
technical issues, simple claims and claims for non payment. While most stand-
ard forms of contract always had similar provisions, the introduction of