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PFI and Adjudication Costs - The Latest Proposals

Fri, 06 November 2009

The Bill passed its third reading stage in the House of Commons on 13 October 2009. The Bill will now progress to the House of Lords for approval or amendment, before receiving Royal Assent and becoming law. Various amendments have been proposed at each stage, but the third reading has incorporated two significant changes:

  • giving more freedom to the Government to create Exclusion Orders, whereby the effect of part or all
    of Part II of the Construction Act is disapplied from PFI contracts; and
  • refining the existing provision in the Bill prohibiting agreements on allocation of adjudication costs and
    expenses before an adjudication starts, to make it clear that the parties can agree in advance to give
    the adjudicator power to allocate his fees and expenses between them

Changes To Dealing With Adjudicator's Fees And Expenses

At present the Construction Act is silent on who pays the costs of adjudication. Therefore parties are free to reach an
agreement at any time on who is responsible for the parties and Adjudicator's fees and expenses. In practice, the
Adjudicator usually has the power to decide who will pay his fees and expenses, but he cannot order a party to pay the
other party's costs unless there is a specific provision.

For full transcript see PFI and Adjudication Costs

© Pinsent Masons LLP 2009

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