In July, Lord Woolf published his final report "Access to Justice". This document followed Sir Michael Latham's report "Building the Team
Whilst each report is independent of one another and addresses separate issues, they are both of considerable interest to us in the Construction Industry. Latham, in building the team and effectively recommending more partnering, is seeking to reduce conflict and thus reduce the level of disputes. Latham also deals with the inherent problem of payment in the industry. On the other hand Woolf recognises the substantial costs and time expended in litigation when a dispute arises and is seeking to reduce both, hence "Access to Justice".

It is admirable that such eminent persons have produced reports which seek to reduce conflict or the resultant time and costs arising from conflict but are we not kidding ourselves that either will make any difference to the day to day workings of the industry apart from some initial lip service.
The history of the construction industry is such that, as I have said before, unless the industry is changed from its very roots and proper prices for construction work are obtainable, and thus different attitudes, then there will always be conflict. Some of the areas which fuel this conflict are dealt with in Tony Farrow's series of articles to follow in this Digest. Latham also considers the payment problems in the industry and, in my opinion, is misguided is he thinks that legislation will resolve late payment problems. We know that it will not because of the many ways in which a dispute can be manufactured to protect cash flows and to effectively negotiate a reduction in the price at the end of a contract. Hence disputes will not reduce. I have first hand knowledge of contractors having an obligation to pay, who simply refuse to do so on the basis of spurious counterclaims. Latham will not help this situation.

If the number of disputes are unlikely to reduce then what benefit will Woolf have? Whilst I agree with most of Lord Woolf's recommendations, and in particular agree with his views on Expert Witness obligations, what greater access to justice will the implementation of his recommendations provide, particularly to the subcontractor who is struggling to make ends meet because of being held out of his money and who cannot afford even to contemplate the costs of Arbitration/Litigation. I cannot see that the recommendations will help bring access to justice any closer for the majority of the industry.

The proposals may well reduce the time and costs but for most participants they will still be beyond their reach therefore denying them justice.

The proposal to direct more disputes to ADR is, I think, perhaps the only glimmer of hope for the industry, although the OR's have been keen to pursue this route for some time. Perhaps the fact that the Courts will take a much keener role in the direction of ADR will help to provide more weight. The drawback of course is that the ADR route is not binding unless the parties actually reach an agreement during the process of ADR.

I am pleased to say that we have recently managed to achieve a fourth settlement by mediation making it a 100% success for clients that we have steered in this direction; however, it seems that there is a need for more awareness to be made of the process and success of ADR, before it will be pursued as a first route and be instrumental in reducing the cost of dispute resolution.
As you will gather I am not co
nfident that the Latham and Woolf reports will have much direct benefit to the construction industry.