Lord Borrie has re-proposed the amendments first proposed by Lord O’Neill of Clackmannan before they were withdrawn amidst last month’s cash-for-legislation scandal. Whatever the reasons for the withdrawal of those amendments, for the reasons we gave in January, it is disappointing to see them proposed again.
In addition, Baroness Hamwee has suggested one amendment to clause 135 (which both Lords O’Neill and Borrie propose is deleted), which deals with the costs of the adjudication. In the absence of the parties agreeing between themselves who will pay the costs of the adjudication, including the adjudicator’s fees, the adjudicator will be entitled to payment of the amount he has reasonably incurred and “the parties shall be jointly and severally liable for any sum which remains outstanding following the making of any determination on how the payment shall be apportioned”.
This amendment may be aimed at ensuring the adjudicator gets paid, in circumstances where the party liable for his fees is unable to pay. However, it is easy to imagine a situation where the paying party simply refuses to pay, with the result that the non-paying party becomes liable.
A number of commentators have talked about the damage that might be done to PFI contracts. The proposed amendments will not address one knock-on effect identified with regard to the construction sub-contract on a PFI project: a ban on “pay when certified” notices. This means sub-contractors will be entitled to payment even if the main contractor has not been paid.