CIC Blog: 2020
Head of ADR Research and Development
Royal Institution of Chartered Surveyors
The evening of Wednesday 18 March sees the launch of the Construction Industry Council’s ground-breaking adjudication procedure for resolving low value building contract disputes, at an event hosted by RICS in Westminster, London.
There is clear evidence in the construction industry that a fresh approach to using adjudication to resolve disputes is needed. This is largely because of concerns raised by small and medium sized businesses that adjudication generally has become too legalistic, too complex and too costly for resolving straightforward issues where the sums involved are relatively small.
There are close to 300,000 construction businesses operating in UK, many of which are SMEs that do not use adjudication. Lots of smaller sized businesses appear to have become disillusioned with adjudication, which they say has developed into a process that is inordinately complicated and expensive. Some even say that adjudication is no longer fit for purpose.
It appears the Government, in the shape of BEIS, is alert to concerns about increasing costs and complexity in adjudication. BEIS has been investigating the extent of real and potential problems for SME’s who say they cannot afford to adjudicate. They would appear to be particularly keen to understand precisely where, in the adjudication process, costs are prone to escalate. That is: are costs being driven higher by overzealous or superfluous lawyer/professional representatives? Are adjudicators at fault for failing to be sufficiently robust and managing the process and timetable efficiently? Are parties at fault by insisting on submitting vast quantities of pointless documents, or failing to adhere to prescriptive timetables and then seeking extensions to timetables?
Whether, and if so to what extent, BEIS intervenes in the future to make adjudication more accessible for SME’s involved in lower value claims remains to be seen. In the interim is is apparent that BEIS welcomes the CIC’s pan-industry initiative to develop a simple, Construction Act compliant, adjudication timetable and procedure for low value disputes
The CIC Low Value Disputes Model Adjudication Procedure (LVD MAP) has been developed under the auspices of the CIC ADR Management Board, whose membership is drawn from leading industry bodies, including RICS, RIBA and the ICE.
Other organisations which are actively supporting the initiative are the CIArb, CIOB, CEDR, IME, IET and UKA. Each of these have been motivated to participate in the development of the LVD MAP in response to growing concerns within the construction industry that adjudication is now too costly, and the process too convoluted, for dealing with anything but large-scale disputes. The primary aim of this pan-industry collaboration is to re-establish industry confidence in adjudication as a method for deciding all types of construction disputes, including straightforward, low value, claims.
The LVD MAP provides a simple and cost-effective procedure that makes adjudication more accessible for SME’s involved in lower value claims. It is aimed at disputes where the amounts claimed are for £50,000 or less, and the issues in dispute are relatively uncomplicated. The LVD MAP offers a nimble way to settle straightforward issues, and allows small businesses to achieve fair, cost effective and transparent decisions by trained and qualified adjudicators. This will be achieved, for example, by adopting a structured timetable and procedure, setting limits on amounts of evidence to be submitted setting a ceiling on adjudicators’ fees at £6,000 and providing clarity for both parties on how much it will cost.
RICS is very supportive of this initiative, and we are delighted that the CIC has agreed to host the launch of LVD MAP at our headquarters in Parliament Square, London.
The Diabetes Safety Organisation
I spend much of my working day visiting construction sites telling people about the consequences of unmanaged diabetes, such as erectile dysfunction, and telling managers that they could be at risk of liability if they are not correctly managing the risk associated with diabetes. Diabetes is a condition most people have heard about. It is in the media most weeks yet very few people understand the impact the condition can have on their bodies, their lives, their families and to their companies.
Diabetes is a hidden epidemic and the fastest-growing health threat facing our nation. 4.6 million people have the condition in the UK, 700 people are diagnosed a day (one every two minutes), it is the leading cause of blindness in the working population and 75% of men who have diabetes, suffer from erectile dysfunction at some point. Diabetes does not discriminate.
Diabetes can cause people to black out or act as if drunk when they are not correctly managing their condition. Those on high medications are required by the DVLA to test two hours before driving and every two hours whilst driving. This is not, as yet, a legal requirement on sites, but the same people may be operating heavy machinery or huge cranes. They are at risk of acting drunk or passing out with no regulations in place. Few companies have in place diabetes specific policies, risk assessments and diabetes first aid kits.
Diabetes is progressive, slowly impacting people’s health. As it cannot be seen in the early stages and the symptoms can be put down to late nights and other lifestyle factors, helping people and companies understand and manage the risk is crucial to today’s aging, busy workforce.
Why does it all matter so much to me, well we can save lives if we get this right and make a difference to people’s health. That is surely enough and if it’s not then we also help companies ensure they comply with their duties under the Health and Safety at Work Act 1974. Workers who are diagnosed with diabetes do not have to inform their company under the equality act (unless otherwise stipulated). However, employers have a duty to ensure, so far as is reasonably practicable, that their employees and those affected by what the employer does are not exposed to risk to their health and safety (Health and Safety at Work Act 1974). If someone had a diabetic episode on site that resulted in a serious or fatal accident and an employer had taken no steps to assess and reduce risk, then the employer would commit a criminal offence and face a significant fine.
The other question I am regularly asked is why is no one else pushing this and why should we spend time and money in our company? My answer, do we need to wait for people to die or a clinical paper to show there is a problem, we know there is a problem, it is time we did something. Diabetes is a condition already recognised by the DVLA to be a high risk and is regulated. Additionally, the symptoms of diabetes expose the individual who has the condition, other employees and non-employees, to risk. The employer therefore has a duty to ensure, so far as is reasonably practicable, that people are not exposed to this risk. I believe that it's an obvious risk once it has been pointed out. Employers must therefore assess and it and take reasonably practicable steps.
Currently diabetes has not been individually recorded at accident sites, so there are no criminal cases we can show you specifically, however that does not mean it wasn’t diabetes that was the cause. We know 500 people a week die in the UK from the complications of diabetes, but it may not be what is written on the death certificate! Do we need to wait to see diabetes as the written cause of death in the construction industry before we do something? I do hope not!
Taking reasonably practicable steps around diabetes safety does not need to be expensive to your company, there are simple measures that can be put in place to keep your staff safe and healthier. Doing nothing after reading this blog is not reasonably practicable.
With diabetes having a national prevalence of 7%, do you know the 7% of people in your company with the condition? Have you delivered diabetes awareness training to your staff, have those with the condition and roles that are required, been risk assessed and do you have policies and diabetes first aid kits across your business? If not, are you doing enough?
As diabetes continues to rise and risk increases, we are working with the international law firm, Gowling WLG, to increase awareness and safety. We believe it’s imperative that employers start to understand the risk that their employees and they themselves face and work together to eliminate it.
By using online training courses that educate people about the condition and its symptoms so that they manage it better will hopefully stop the accident and mean your company discharges the duty.
Don’t let a diabetes related episode contribute to a workplace accident leaving you open to a criminal offence and facing significant fines. Take steps to make your company ‘diabetes safe’. Why not sign up to the diabetes charter and commit to increase awareness to your staff. To find out more about the diabetes charter please go to diabetessafety.org.
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Kate Walker (Director)
Chartered Arbitrator and Engineer, Adjudicator, Mediator
Niall Lawless is just completing his second three year term as Chair of the CIC ADR Management Board
In November 2007, I attended a construction sustainability conference in Shantou, Guangdong, China with a Chinese friend, a Structural Engineer. When I asked her why she chose to study structural engineering, she replied that she didn’t. When I enquired further, she told me that in the mid-1980’s following success in the ‘Gaokao’, she was accepted to study aeronautical engineering. During induction day the leader of the University came to talk with the aeronautical engineering students and told them at that stage of China’s development it needed structural engineers more than it needed aeronautical engineers, and he asked students to consider if they would change course. My friend was one of the students who volunteered to move to the Faculty of Structural Engineering. When I asked her why, without a flicker of hesitation she replied “my country’s needs are more important than my needs.”
In 2009, at the inception of the first Obama administration, I was studying culture and dispute resolution, and doing some teaching at the University of International Business and Economics (UIBE) in Beijing. When I looked at the makeup of the USA government (a democracy) I was struck by the high number of members who were lawyers. When I looked at the makeup of the China Politburo (a meritocracy) I was struck by the high number of members who were professionally trained engineers. As I wrote recently in an “Adjudication Practice and Procedure: Ireland” textbook, engineers and lawyers have different belief systems. Engineers deal with certainty and facts, and are concerned with creating tangible solutions that work. Lawyers deal with ambiguity, and are concerned with creating intangible solutions that win.
First travelling to China as a tourist in 2004, I have subsequently rented an apartment in Beijing for 14 years, and I have been a volunteer tour guide at Forbidden City for 12 years.
Forbidden City, a UNESCO World Heritage Site was a Palace of the Ming and Qing Dynasties, and in the period from 1420 until the end of the Imperial System in 1911, twenty-three Emperors ruled China from Forbidden City. Constructed between 1406 and 1420, the Forbidden City is the largest wooden palace complex in the world. From the East Gate to the West Gate is 700 metres, and aligned along Beijing’s central axis it is 1,000 metres from the South Gate to the North Gate. During the period 1406 to 1416, materials were amassed from all over China, and during the period 1416 to 1420 the Palace was built as one. It is said that about one million people were involved with the construction of Forbidden City including 100,000 artisans and craftsmen. During that period China had between 90 and 100 million people, so 1% of the population were involved with that amazing construction enterprise.
It was called the Forbidden City because commoners who entered did so under penalty of death. When I walk around that revered place unaccompanied, I sometimes think the Emperors could be turning in their tombs at the thought of a Barbarian (a non-Chinese person) from Northern Ireland having authority and freedom to do so.
In December 2019, my son Becan who is currently just finishing a PhD in Mechanical Engineering at Manchester University and his partner Ellen visited me. As we travelled to and from Chinese cities such as Beijing, Tianjin and Hong Kong Self-Administered Region (SAR), I had cause to reflect on how construction and engineering have changed over the last forty years, in the period since 改革开放 (Gǎigé kāifàng : reform and opening-up) .
CITIC Tower. During Imperial times no building in Beijing was allowed to be taller than Forbidden City’s Hall of Supreme Harmony, so just 100 years ago the tallest building in Beijing was 33 metres. Today if you walk east along the rampart from Forbidden City’s Meridian Gate to the Corner Tower you can experience 600 years old ancient architecture, and if you look past the Corner Tower you can experience a few years old modern architecture in the Central Business District (CBD). The smaller of the two buildings in the distance is the China World Trade Centre Tower 3, and the taller of the two buildings is the new CITIC Tower, which although not the tallest building in China, runs to an impressive height of 528m. The Institution of Structural Engineers said ‘this 108-storey tower is possibly the world’s tallest building constructed in a high seismic zone.’ The form of the CITIC Tower draws inspiration from the ‘zun’ a vase like ritual vessel used until the Northern Song (960–1126 AD).
Beijing Subway. In 2006, when I was renting an apartment near UIBE, my prospective landlady told me that within 18 months my apartment in Rome Gardens would be close to the subway. I did not pay much attention to that, thinking it was ‘Mere Puff’; but low and behold in March 2008 Beijing Subway Line Five was completed and I found myself five minutes’ walk from Huixinxijie Beikou subway station. Beijing Subway had 114 km of track in 2004; 200 km of track in 2008; 336 km of track in 2010; 527 km of track in 2014 and 700 km of track in 2019. In concord with holistic design, via mall and subterranean walkway, the CITIC Tower connects directly with three subway stations and four subway lines.
Beijing Daxing International Airport. In December as I travelled through Beijing Capital International Airport (BCIA) Terminal 2, I thought that it was abandoned a bit like the Mary Celeste, and would not be in use for long. The decline of BCIA Terminal 2 began with the March 2008 opening of the Norman Foster designed BCIA Terminal 3. Almost everyone who travelled by plane into Beijing before March 2008, will have passed through BCIA Terminal 2 located in the North East of Beijing. Part of the reason for the abandonment is the amazing new Zaha Hadid designed Beijing Daxing International Airport (BDIA) ‘the Starfish’ located in the South of Beijing. Construction work commenced in December 2014, and the airport was opened in September 2019. The terminal building is the largest single-structure airport terminal in the world, with an area of more than 1,000,000 m2. There are currently four runways (with the prospect of becoming seven in the future), and it is expected to handle up to 45 million passengers per year by 2021 and reach an outstanding 100 million in the future.
High Speed Rail. Becan and I took a weekend in Tianjin. Tianjin is famous as a concession city. Its legacy architecture located along the Hai River built in the period of national humiliation and unequal treaties, is interesting to behold. The Beijing to Tianjin driving distance is about 125 km, but the travel time by high speed train with a station stop along the way is just 30 minutes. The speed indicator in the train carriage displayed 349 km per hour. I wondered was the speed governed to be below 350 km per hour. In September 2019, the World Bank reported that over the past decade, China has built 25,000 km of dedicated high-speed railway—more than the rest of the world combined. China has 2,800 pairs of bullet trains.
Hong Kong–Zhuhai–Macau Bridge (HZMB). As part of China’s Belt and Road initiative, the Greater Bay Area development seeks to build a world-class city cluster in an economically diverse region in southern China. To help facilitate this initiative, China has built the HZMB across the Pearl River Estuary. The HZMB is the world's longest sea crossing, a 55 km long group of bridges and tunnels which protect the sea lanes, linking Hong Kong SAR, Zhuhai City of Guangdong Province and Macao SAR. Construction commenced in December 2009, and ended in February 2018.
In 2019, China had the second largest economy in the world (GDP: US$ 15.54 trillion) and the UK had the seventh largest economy in the world (GDP: US$ 3.02 trillion). According to PwC, today’s China’s Belt and Road initiative has a total infrastructure investment need of about US $5 trillion, creating incredible opportunities for capital projects.
The purpose of this blog is not so much to extoll Chinese construction achievements, but rather to hold up a mirror to ‘Global Britain’, and our agonising incapacity through culture, economics, and politics to invest properly in a modern fit for the purposes of the 21st Century infrastructure. China has benefited from a rolling five-year planning system which is a core mechanism for coordinating and implementing policy and which has helped to regulate economic and infrastructure development. If the UK is to compete as ‘Global Britain’ it needs a long term national infrastructure development plan that has cross-party consensus and which is immune to the vagaries of individual governments and the parliamentary cycle. As Bob Dylan Nobel Peace Prize winner wrote and sung ‘The Times They Are A-Changin.’
Photographs - Beijing, Tianjin and Hong Kong Self-Administered Region (SAR)
1)Beijing - Forbidden City Hall of Supreme Harmony before the gates open
2)Beijing - Forbidden City Corner Tower
3)Beijing - CITIC Tower (Source: www.kpf.com)
4)Beijing - BCIA Terminal 2 – it will be retired long before me
5)Beijing - BDIA ‘the Starfish’ a Cathedral of Light 1
6)Beijing - BDIA ‘the Starfish’ a Cathedral of Light 2
7)Tianjin - High Speed Rail Train just arrived
8)Tianjin - Colonial era architecture on the Hai River
9)Tianjin - Guinness is available
10)Hong Kong–Zhuhai–Macau Bridge The Hong Kong Link Road (Source: Arup)