I was very pleased to see that my friend Jeremy Coggins[1] won the Brooking prize this year with his paper ‘Levelling the Playing Field’ – A proposal for the regulation of unfair contract terms in construction contracts. It is hard to disagree with the thrust of what Jeremy suggests.

Although generally not a fan of government interference in commercial affairs, there is, it seems to me, a very strong case for some more legislation in this field, particularly since the courts appear to be becoming more weak-kneed in their use of the available legal principles to prevent abuse of power in the construction contract arena. Jeremy is kind enough in his paper to mention the contribution I made to the recent Murray review, suggesting some wording for an effective statutory ban.[2]

Some statutory bans certainly have been effective. In particular, the bans both in the UK and in Australasia on pay when paid provisions have been very effective, and have done much good to the construction industry in those jurisdictions. Conversely, the impact of the Unfair Contract Terms Act in the UK and of the provisions relating to unfair contract terms in the Australian Consumer Law has been scant indeed (in the former respect, Jeremy notes the survey by my former firm in London – Fenwick Elliott LLP[3]).

The circumstances of the construction industry are rather different from other sectors, and rather than wade into the quagmire of the Australian Consumer Law, it would probably be sensible for an appropriate statutory limitation on unfair contract clauses to be included in the security of payment legislation, alongside the ban on pay when paid clauses. Unhappily, it remains the case (despite much criticism) that that legislation is made on a state by state basis in Australia, and that clearly represents an impediment to sensible reform.

But an optimist would note that the ban on pay when paid clauses has been obtained by similar legislation in many jurisdictions. Perhaps a ban on unfair contract terms could take root similarly?

[1] Jeremy is an Associate Professor at the School of Natural and Built Environments  at the University of South Australia

[2] Jeremy notes: Murray’s recommended test is based upon the test proposed by Robert Fenwick Elliott in his article “Queen of Hearts in the Dock”, https://feconslaw.com/2017/06/06/queens-of-hearts-in-the-dock/

[3] “Exclusion and limitation clauses in construction contracts – recent developments”, at https://www.fenwickelliott.com/research-insight/annual-review/2015/exclusion-limitation-clauses-construction-contracts