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It also meant you could stop work if you weren’t paid with an extension of time to cover the unpaid period.

Now, in the darker recesses of the Local Democracy Economic Development and Construction Bill, we are promised amendments to all these provisions. There will be changes relating to the costs of adjudication, the right to additional time and money if you do have to suspend, and the introduction of a ‘payee’s notice’ that a receiving party can give if the payer does not issue the notice they are meant to.

Perhaps most significantly, the Bill proposes to remove the requirement that the contract must be in writing to benefit from the protection of the Act. (Although, strangely, it still requires the contract to have the adjudication provisions in writing). If there are no written provisions at all, then the Scheme for Construction Contracts will apply, including the adjudication provisions.

In other words, a simple oral agreement that works be carried out, when, by whom and for how much, would form a contract that could then be adjudicated. As many construction projects start long before the written contract is agreed by the parties, let alone signed, this sounds like an excellent idea. And if you refer in your oral contract to written terms, that must help, mustn’t it?

Imagine the situation where a developer and a contractor meet over lunch to iron out final details. The discussion could end up as follows:

‘So can you start next Monday?’

‘Yes. The way business is at the moment, I could start this afternoon.’

‘Good, our standard terms, of course.’

‘You know we only ever contract on ours.’

Many may need to maintain a tight leash on managers to avoid ‘accidental’ contracts

‘What? Even with an empty order book – come off it! Have another pint.’

And the conversation drifts off to the problems facing the English cricket captain and coach.

Work starts on the Monday and a few weeks later people start thinking about a first payment. But then – shock horror – the developer says the contractor has to stop work because the bank has pulled the plug on the funding. The contractor, not surprisingly, can’t afford not to be paid, so it starts adjudication proceedings based on the requirements in his standard terms, which specify Adjudicator Nominating Body A.

The developer says that not only is there no contract, but if there was one, their terms and conditions would specify Adjudicator Nominating Body B, so the adjudicator who has just been appointed has no jurisdiction.

The question as to whether there is a contract is one which can be determined only by the courts. As can be seen from the pub conversation above, it is not absolutely clear whether there is a contract at all, let alone whose terms apply.

If this Bill becomes an Act unchanged, many may find they need to maintain a tight leash on their contract managers and directors to prevent ‘accidental’ contracts coming about. Even a blanket disclaimer on your letters stating ‘No contract unless a contract in writing’ may not save you from an ‘accidental’ oral contract and being subject to the jurisdiction of an adjudicator you hoped you would never see again.

The Bill does contain provisions that could benefit the contractors. The amendment to the suspension clause allowing contractors time and money not only for the period the defaulting party doesn’t pay you, but also for time and cost while you exercise your right to stop work, seems sensible. The clause preventing a referring party in an adjudication from being contractually obliged to pick up all parties’ costs of that adjudication also seems fair.

But to allow an oral construction contract to be adjudicated, where the terms of that contract may be recalled by different parties in different ways, might be counterproductive and result in more, not less, litigation. Will there be a flurry of applications to the courts to stop adjudications which have been started under the ‘wrong’ provisions? Will the litigation bills of contractors and developers increase rather than reduce as the argument moves on to the question of what the supposed oral contract might actually have been?

There may be problems with limiting adjudication to written contracts, but there may be more and different problems if oral construction contracts are allowed.