Dr Wolfgang Breyer, Editorial in: Zeitschrift für das gesamte öffentliche und zivilrechte Baurecht (BauR), issue 12, December 2016
Extract:
A situation that was not unknown in this country until a few years ago. The Construction and Regeneration Act was created on the basis of Sir Michael Latham's recommendations ("Building the Team"). Sir John Egan's first report ("Rethinking Construction") formed a further basis for initiatives that permanently changed the British construction industry. Probably the most important changes:
- Introduction of a legally prescribed adjudication procedure;
- Development of a standard contract for a highly developed partnering model.
Re 1: The parties are barred from going to court - at least in the first instance. Deviating contractual provisions have no effect. The adjudication procedure provides for a mandatory decision period of 28 days for the adjudicator(s) on the dispute. This period can only be extended once by 14 days with the consent of the party submitting the claim. Naturally, the question arises as to whether complex facts and legal issues can be dealt with in sufficient depth within this period. "No" will probably be the correct answer. However, this depends on the fundamental understanding of the level of detail with which construction disputes should be decided. "Yes, it's quick and dirty but, it has been seen as pretty fair".
In any case, the fact is that only 2% of adjudication decisions will go to the next instance by 2014. Incidentally, this would generally be the Technology and Construction Court, a court that specialises in construction disputes throughout England. Also something to be envious of.
Re 2: Latham and Egan's approach was to leave the "adversarial structures" of the construction industry behind, moving away from "lowest price single stage tendering under risk dumping traditional forms of contract" towards a procedure that provides for a detailed - also financial - analysis of the expected risks in a cooperative process based on the early involvement of the executing companies ("Early Constructor Announcement"). It is therefore a matter of risk management instead of mere, often unreflected risk distribution. These approaches were adopted by the British government in the Government Construction Strategy in 2011. The early involvement of the "constructors" is by no means - as is largely the case in Germany, for example - limited to the general contractor also entrusted with the execution planning, but also, and ideally, all planners and specialist planners entrusted with important tasks, including the "key subcontractors", i.e. the subcontractors for key trades. These recommendations were implemented by Professor David Mosey, author of the PPC (Project Partnering Project) 2000 model contract. PPC 2000 is a multi-party contract, i.e. all the parties named above are parties to the contract and have rights and obligations not only towards the client, but also towards each other. There are evaluations of construction projects that have shown cost benefits of up to 30 % using this model. At the same time, since 2000, only two legal disputes have been registered in construction projects in which PPC 2000 has been used (in 2012 in 6% of all construction projects in England).
A major difference between this approach and the partnering models practised in Germany is that the latter generally attempt to motivate the participants through value engineering and the resulting savings. On the one hand, however, the value engineering is usually created far too late, i.e. usually after the design planning has been finalised, and on the other hand, the motivation to participate in any savings ideas is often not very pronounced for a variety of reasons. Penalties for breaches of information, inspection and warning obligations at a very early stage are a completely different matter. Inspired by these approaches, ECE Hamburg recently launched an initiative with the aim of developing a balanced and fair partnering management concept that is suitable for defining a standard. Supported by the German Construction Court Conference and renowned representatives of other major clients, the construction industry and the legal profession, among others, the approach seems promising.
If the bilateral exchange with our English neighbours is already extremely refreshing, what insights might a global comparison and exchange on construction law between and with the various legal families that dominate the world produce? The International Construction Law Association (ICLA) has dedicated itself to this task and is also receiving broad support from the academic world, for example from Peking University Law School, Melbourne Law School, the University of Copenhagen and King's College in London. The first concrete results are very promising."
