The Pit or the Pendulum

PitandthePendulumThere are no prizes to be won for identifying that trial in a court of law is an appallingly inefficient way of deciding complex construction disputes. Although in theory more flexible, a conventional hearing in an arbitration is hardly any better, and some would say even worse.

In many cases, of course, it is possible to resolve disputes by some sort of intermediate process, either on a non-binding basis like mediation or review board, or on a “pay now, argue later” basis, such as adjudication. But sometimes, the dynamic between the parties is such that a binding and final determination is required. Is there an alternative to the full Monty?

Well there is, actually. It is pendulum arbitration. Or as the Americans sometimes call it, baseball arbitration. Or sometimes flip-flop arbitration. Or even, less obviously, a “last best offer” arbitration. Personally, I think the term “pendulum arbitration” is the most appropriate. It is not new[1]. But it is much faster and cheaper than conventional arbitration, but is just as binding.

Here is how it works. There is Continue reading

Penalties – a Brief Guide to Three Recent Revolutions

Lord Dunedin

Lord Dunedin

For some reason which is not entirely obvious, students of construction law love writing papers about the distinction between liquidated damages clauses and penalty clauses. Traditionally, it has been relatively firm ground, and in particular, everybody trots out the dicta of Lord Dunedin in Dunlop v New Garage[1].

But all of a sudden, things have begun to change. First there was the decision of the High Court of Australia in Andrews v ANZ. Then there was the follow up decision in Paciocco. Now there’s been the decision from England in Cavendish v El Makdessi.

The short story it is that if you have got one of those old papers, which you might written, or someone else might have written, which trots out the famous dicta of Lord Dunedin, you might as well throw it away. It should go the same way as flared trousers, cheesecloth shirts and your old ABBA LPs. Quite what we have in its place depends somewhat on where you sit in the common law world. Also changed, but not quite gone, is the interesting but still somewhat speculative notion that some time bar provisions, which contain particularly onerous notice provisions, might be circumvented by the equitable doctrine of relief from forfeiture. To get to a discussion of this concept, you will have to read on a bit.

Before getting to these new cases, we should (as in all good funerals) acknowledge Continue reading

BOSSing Around

BOSSI will be at the BOSS dinner at the Wine Centre in Adelaide on Friday, having been asked to give an after dinner speech on the topic of construction insolvency.

BOSS is the Builders’ Organisation for Students and Staff, and the thing is organised by the School of Natural and Built Environment at the University of South Australia.

They want me to Continue reading