Episode 94 - JCT Minor Works Contract (Part 2)

This week is Part2 on the JCT Minor Works  Contract covering Control of the Works, Sums Properly Due, Contract & Certification, Indemnity & Insurance, Termination and Dispute Resolution. This episode content meets PC5 - Building Procurement of the Part 3 Criteria.

Resources from today's episode:

JCT Website:
https://www.jctltd.co.uk/category/intermediate-buildinghttps://www.jctltd.co.uk/category/minor-works-building

Book:
Guide to JCT Minor Works Contract 2016 by Sarah Lupton

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Transcript

Episode 94

Hello and Welcome to the Part3 with me podcast, 

The show that helps part 3 students jump start into their careers as qualified architects and also to provide refresher episodes for practicing architects. I am your host Maria Skoutari and this week we will be talking about the JCT Minor Works Contract. Todays episode meets PC5 of the Part 3 Criteria.

Today is Part 2 of the JCT Minor Works Contract, last week we covered how the contract is formed, the contractors obligations and commencement and completion. This week under part 2 we will covering control of the works, sums properly due, contract and certification, indemnity and insurance, termination and dispute resolution.

4. So now lets move on to the next section, Control of the works: 

The day to day control of the works, such as managing site operations, coordination of orders and supplies and so on are entirely the responsibility of the contractor. So the contractor is required to keep a competent person in charge on the site at all reasonable times to receive any instructions given by the CA and to act as the contractors agent on site. 

Now in terms of the CA’s responsibilities under the contract and the control the role has over the works, is to supply the necessary information, issue instructions and certificates or notices. Their key powers include:

• Approving the contractors proposals to deal with inconsistency in the Contractors Design Portion documents - under the Minor Works Contract with Contractors Design only
• Instructing that defects can remain
• Consent to the contractor sub-contracting the works or any contractor design
• Issue written instructions to the contractor 
• Instruct variations, including additions to or omissions from the works and the order or period in which they are to be carried out
• Agree the price of variations with the contractor before they are carried out
• Exclude employed persons from the site
• Issue a pay less notice on behalf of the employer
• Give the contractor notice of defaults
• Issue any further information necessary
• Issue all certificates
• Correct inconsistencies between contract documents
• Grant extensions of time as may be reasonable
• Certify practical completion
• Notify contractor of defects
• Certify that defects have been made good
• Confirm instructions in writing
• Endeavour to agree value of variation with contractor
• Value variation instructions
• Ascertain amount of direct loss and/3.7 Issue instructions regarding expenditure sums
• Issue interim certificates
• Issue final certificate
• Issue reinstatement certificates regarding insurance monies to be paid to the contractor
• Work collaboratively with other team members
• Establish a working environment where health and safety is of paramount concern
• Confirm cost-saving measure in an instruction

The next key role contributing to the control and progress of the works is the Clerk of Works. There is no provision under the Minor Works Contract for an independent clerk of works to be appointed. If the employer decides to have one appointed, they should make it clear at tender stage.

Now in terms of sub-contracted work, the contractor may only sub-contract work with the written consent of the CA for each instance of sub-letting. The JCT Short Form of Sub-contract can be used with the Minor Works Contract when a contractor engages a sub-contractor or the JCT Minor Works Sub-Contract with sub-contractors design. Although there is no obligation for these forms to be used, the contractor will have to give a good reason for not using them. The sub-contract should provide that the sub-contractors employment must terminate immediately on termination of the contractors employment and that the sub-contract must comply with their CDM obligations. The contract doesn’t make any provisions for naming or nominating a sub-contractor and if one is named in the tender documents, the contractor will remain entirely responsible for the performance of that sub-contractor. It should also be remembered that there is no JCT employer/specialist warranty for use with MWD16 in the event that the employer wishes to be able to hold the specialist sub-contractor directly liable for this work. 

There are also no provisions whereby the employer may engage persons directly to carry out work that does not form part of the contract while the contractor is carrying out the works. If its necessary, the specification would have to set out the requirements giving as much detail as possible about the nature and duration of the work and if it should differ from what has been set out, it could be grounds for an extension of time and other claims by the contractor.

In terms of CDM and Health and Safety, both the employer and contractor are required to comply with the CDM Regulations and it is the employers obligation under the contract to ensure that the principal designer and principal contractor carry out all the relevant duties under CDM. The CA has no duty under the Minor Works Contract to check that the contractor is complying with health and safety requirements on site. The responsibility for ensuring that correct health and safety measures are employed on site rests with the contractor.  The contractor as ‘principal contractor’ may be required by the principal designer to provide information in relation to the health and safety file, however, the MW16 does not contain express provisions for ‘as-built’ drawings. If these are needed, the specific requirement should be set out in the specification or schedules.

Under the Minor Works Contract with Contractors Design, the contractor is required to provide the CA with copies of drawings or details specifications for materials, goods and workmanship, and related calculations and information as are reasonably necessary to explain the Contractors Designed Portion and the contractor may not commence works until after 7 days from the date the information is supplied. There are no provisions to deal with any comments the contract administrator might wish to make on the information. Although this does not prevent the contract administrator from commenting and the contractor is not obliged to incorporate the comments. If an agreement cannot be reached on matters raised, the contract administrator may need to instruct a variation to the CDP.

Now in terms of inspections, under the Minor Works Contract, the CA does not have a duty to inspect the works at regular intervals like other contract forms. However, the CA does have obligation to the employer and this typically does include a duty to inspect. A contract administrator will not necessarily be liable to the employer for negligent inspection if a defect in a contractor’s work is not identified. The question here will be whether the contract administrator exhibited the degree of skill that an ordinary competent professional would exhibit in the same circumstances. Generally, the extent and frequency of inspections must enable the contract administrator to be in a position to properly certify that the construction work has been carried out in accordance with the contract.

As previously mentioned earlier in the episode, the CA has the power to issue instructions and the instructions should only come from them. If the employer gives an instruction other than through the contract administrator, this would be of no effect under the contract and the contractor would be under no obligation to comply with any such instruction. However, if the contractor does carry out the instruction a court might consider that there had been an agreed amendment to the contract, but the consequences would be difficult to sort out in practice and the employer would be very unwise to risk such action. 

The CA’s instructions include:

• Acceptance of defective work
• Changes in the Contractors Design Portion or the works
• Expenditure of provisional sums
• Exclusion of persons from the works 

All of the CA’s instruction should be provided in writing most commonly using the forms published by the RIBA Publishing or NBS CA. The contractor must then comply with every instruction, if they fail to do so, the employer may employ and pay others to carry out the work. The contract administrator must have given notice to the contractor requiring compliance with the instruction, and seven days must have elapsed after the contractor’s receipt of the notice before the employer may bring in others. If the contractor believes that the CA’s instruction might not be as per the contract they can raise the matter in adjudication. Any additional costs incurred by the employer to carry out the work using others are to be deducted from the contract sum. 

Now in terms of variations, under common law, neither party to a contract has the power to alter any of the items stated within the contract, unless the contract provides that variations can be made. Under the Minor Works Contract, the CA has the power to order variations but does not have the power to alter the nature of the contract. All variations may result in an adjustment of the contract sum and give rise to a claim for an extension of time and direct loss and/or expense. So the CA may vary the works and add or omit work, or substitute one type of work for another. Although there is no specific provision in MW16, it seems likely that the contract administrator could order removal of work already carried out. The CA can also order variations affecting the sequence of work. Under the Minor Works Contract with Contractors Design, the CA can also instruct a change to the employers requirements resulting in an alteration to the design of the contractors design portion works. 

Changes to materials and workmanship also constitute a variation, however, where the standard achieved appears to be unsatisfactory, the CA should be careful and not confuse who is ultimately responsible for the works which is the contractor, although they could politely draw the contractors attention to the areas of defective or poor quality work. Of course the contractor should not be paid for any defective work and if there does appear to be insufficient incentive then the contract administrator may instruct that the work is carried out in accordance with the contract. This allows the employer to employ others to carry out the work should the contractor refuse to comply, provided notice is given. In the scenario, however, where the contractor insists that the work was correctly carried out then this dispute might have to be taken to adjudication. The contract does not expressly give the contract administrator the power to accept defective work or instruct that it remains (except during the rectification period), however, the same effect could be achieved by issuing a variation instruction that effectively lowers the standard of work set out in the contract documents. The CA, however, should not instruct as such without the employer’s consent, which should be recorded in writing. If the defective work is minor and the employer decides to accept it, the parties should agree on any deduction to be made before the defective work is accepted. Of course the CA should strongly advise the employer against accepting any defective work that could later cause technical problems or be a source of irritation. If the contract administrator wishes to have tests carried out then the cost of these would be borne by the employer, unless special provisions have been set out in the contract documents, as MW16 has no provision for testing or opening up work.

Now during the rectification period, the contractor is required to make good any defects, shrinkages or other faults to the works which appear during the rectification period, this is stated to be 3 months in the contract particulars although a different period can be inserted if required and a longer period tends to advised. Within that period the contractor has the right to return to site to remedy any defects and although this ceases at the end of the three month period, the contractors liability for defective materials or workmanship continues throughout the statutory limitation period. Under the Minor Works Contract, the CA is required to notify the contractor of the existence of defects within 14 days of the end of the rectification period and this can be in a written format simply informing the contractor that defects have appeared and their general nature and the responsibility will then be with the contractor to identify and make good all defective work. Once satisfied that the contractor’s obligations have been discharged, the contract administrator must issue a certificate to that effect and the certificate is a precondition to the issue of the final certificate. The contract, however, does not state what should happen in respect of defects that appear after the issue of the certificate but before the issue of the final certificate. In such instance, either an agreement should be made with the contractor to rectify the defects before the final certificate is issued. If the contractor were to refuse to do this, an amount could be deducted from the contract sum to cover the cost of making good the work, but this might involve some risk to the employer. Or the employer can have the defective work rectified by another contractor, and to deduct the amount paid from the contract sum. This would involve a delay to the issue of the final certificate and would probably be disputed by the contractor.

5. So that covers the control of the works, now lets look at Sums Properly Due:

The Minor Works Contract, allows for the contract sum to incorporate the cost of variations as the works progress, it also allows for the direct loss and/or expenses due to any resulting disruption and for costs and expenses due to suspension. If the Supplemental Provision 3 is included within the contract, then the contractor may propose savings that result in an adjustment to the contract sum. The form can also take into account fluctuations or it can be operated literally as a fixed price contract (meaning the contract sum will not change unless variations occur or provisional sums are included), VAT is not included in the contract sum. 

If sufficient information can’t be provided at the time of tender to allow the contractor to prove an item, then a provisional sum may be included in the tender documents to cover it. The CA must instructions regarding all work covered by provisional sums, key item to note here is that a provisional sum is different to a ‘prime cost’ sum which refers to a price that has been ascertained in advance of requesting tenders from a specialist supplier or sub-contractor. Prime cost sums are unlikely to be applicable to a Minor Works Contract. 

Now, when the CA is evaluating a variation, they should endeavour to agree a price with the contractor in advance if the work being carried out. The CA should also ensure the price is confirmed with the employer before agreeing to it. Direct loss and/or expense claims should also be included in the amount of a variation and this is the only instance in the Minor Works Contract where the CA may make such an award. If the contractor suffers losses not related to a variation, these might have to be referred to dispute resolution proceedings unless some agreement can be reached. Direct loss and/or expense’ refers to losses suffered as a result of delay or disruption consequent upon the variation, excluding, of course, the direct cost of carrying out the relevant work. In ascertaining loss and expense the contract administrator must determine what has actually been suffered. The sums awarded can include any loss or expense that has arisen directly as the result of the variation. In assessing the amount of damages the objective is to put the contractor back into the position in which they would have been if the disturbance didn’t occur and the contractor is to be able to show that they have taken reasonable steps to mitigate their loss. Applications by or claims from the contractor must be dealt with according to the procedures contained in the contract. Failure to certify an amount properly due will not prevent recovery, and could leave the employer liable in damages for breach of contract.

6. Now lets move on to the next Section of the Contract, Certification:

Under the Minor Works Contract, the CA has the duty to certify sums properly due to the contractor, including valuations and issuing certificates. Failure to exercise this duty with care and skill can amount to negligence on the CA’s part. Best practice would be for the CA to issue the certificate to the employer with a copy to the contractor at the same time. The procedure to be used should be established at the outset, either by setting it out in the contract documents or agreeing it at a pre-contract meeting. 

So looking at Interim Payments in the first instance, payment is made by the employer to the contractor after the issue of the certificates by the CA, these are to be issued within 5 days of the due date which then relates to the Interim Valuation Date which are entered into the contract particulars. The first one should be no later than one month after the works commencement date and then at monthly intervals. The Minor Works Contract makes no provision for advance payment to the main contractor nor for payment on commencement of the works, if required this should allowed for and amended in the contract terms. Now in terms of the payment, the CA is responsible for determining the value of the interim payment, this task can be delegate to a QS. Under the Minor Works Contract, the contractor has the right to make an application for payment, stating the amount they consider to be due and the CA then needs to make an independent assessment if the sum to be paid. The Interim payment should include the value of the work properly executed and the value of materials and goods properly brought into site, adequately stored and protected and the value of the work will be calculated using the prices and rates shown in the specification or schedules or the contractor schedule of rates. No provision is to be made for off-site materials, goods or prefabricated items. The Interim Payment should also take into account any relevant variations and adjustments due to instructions relating to provisional sums and any costs and expenses due to suspension. From this then the total amount stated as due under previous certificates, any amount paid as a consequence of a contractor’s payment notice issued since the last certificate, and any amounts deductible due to acceptance of defective work should be deducted and the total amount will be subject to a percentage reduction, which is the retention.  

The CA should only certify after having carried out an inspection to a reasonable diligent standard. The contract does not set a date, but normally the certificate should include for work carried out up to seven days before the date of the certificate and the CA shouldn’t include any work that appears to not have been properly executed. If work included in a certificate appears to be defective after payment has been made, the value can be omitted from the next certificate. 

Once the Interim Payment is certified, the final date for payment is 14 days from the due date. If the employer intends to withhold any amount from the sum certified, the employer, or CA must give the contractor written notice of this no later than 5 days before the final date for payment, which is known as the ‘Pay less notice’ and should set out the sum the employer considers is due to the contractor at the date the notice is given and the basis on which that sum has been calculated. 

In the case where no certificate is issued, if the contractor has already issued an application for payment, then this becomes a ‘payment notice’ or they can issue the payment notice at any time after the issue date has passed to the CA. The employer must then pay the contractor the sum shown as due on the payment notice, subject to any pay less notice. If the employer disagrees with the amount shown on the payment notice then they must issue a notice explaining this intention.

Now, the Minor Works Contract, allows the employer to deduct liquidated damages from certified amounts provided the correct notices are issued. The employer would therefore be unable to withhold amounts to cover any defective work included in a certificate unless the deduction is covered by a notice.

The Minor Works Contract includes a number of provisions protecting the contractor if the employer fails to pay the amounts due. One is that interest is applied on late payment of interim and final certificates. The contractor is also given the right of suspension as required by the HGCRA if the employer fails to pay the contractor by the final date for payment, if however a notice to withhold payment has been given by the employer, the contractor may not suspend work and they must give the employer written notice of their intention to suspend work and the grounds for doing so. Once payment has been made, the contractor must resume work. 

After practical completion, the Minor Works Contract allows for certificates to continue to be issued at the same intervals, monthly, up until the final payment. Following practical completion, the amount should be for 97.5% of the total amount due to the contractor under the contract, unless a different percentage was inserted in the contract particulars. Half of the retention would also be released to the contractor. 

By the final certificate - The interim payment certificates at monthly intervals should have been issued, the practical completion certificate should also have been issued alongside the interim payment certificates following practical completion, including release of half of the retention and the certificate of making good. To determine amount of the final certificate, the contractor must send the information required within 3 months of the date of practical completion certified by the CA and the due date for final payment is 28 days after either the date of receipt of the documentation required or, if later, the date specified in the certificate. The CA must then issue the final certificate within 5 days of the due date stating the basis of the calculation and the amount remaining due to the contractor. 

Under the Minor Works Contract, the final certificate is not conclusive evidence that any obligations under the contract have been discharged, unlike other JCT forms. It should be highlighted that although neither the final certificate nor any other certificate is stated to be conclusive, there may remain a very limited area where it would be difficult to raise a challenge. So although in theory the certificate could be challenged, there would be no means by which it could be proved the contractor was in breach.

7. So that cover certification, lets move on to Indemnity and Insurance:

The Minor Works Contract, provides for the contractor to indemnify the employer in respect of certain losses such as injury to persons, or damage to neighbouring property caused by the contractors negligence. This indemnity protects the employer in that if an injured party brings an action against the employer, rather than against the contractor, the contractor has agreed to carry the consequences of the claim. The contract allows provision of three different types of insurances that can be taken out: 

• one is for use with new buildings with no existing structures involved and is taken out by the contractor and is to be in Joint Names, the insurance should also be for the full reinstatement value of the works,
• the second is for use with existing buildings where the policy will cover the new works and existing structure and is taken out by the employer and is also to be in Joint Names against damage due to specified perils and the employer will also take out a joint names ‘all risks’ policy to cover the works, 
• and the third is used where neither of the other two options are appropriate and the parties agree their own insurance arrangements and is set out in the contract particulars. 

In any insurance provision taken out, both parties must be able to provide reasonable evidence within seven days of a request that the insurances have been taken out. And the cover chosen, must run until practical completion of the works, or termination. 

In the event that the employer cannot obtain the second mentioned insurance cover against existing structures, the parties will need to make special arrangements under the third option. Where the employer is the freeholder, the employer insures the works under joint names, and continues with their own existing structures policy and the contractor will insure themselves against damage to existing structures. Alternatively, the contractor insures the works under the first insurance option mentioned, together with the existing structure (by extending their works insurance policy). If the employer, however, is not the freeholder, then the JCT recommends that the parties take specialist advice, and liaise with the freeholder and their insurers.

The Minor Works Contract makes no provision for terrorism cover or for compliance with the Joint Fire Code nor does it include provisions for insurance against damage caused to property which is not the result of the negligence of the contractor. 

In respect of the contractors liability relating to personal injury or death of employees, this liability is met by the employers liability policy. This has been compulsory since the Employers’ Liability (Compulsory Insurance) Act 1969. The legal minimum level of cover for most firms is £5 million, but many insurers will provide a £10 million policy as standard. Now in terms of the contractors liability in respect of third parties, this is met by their public liability policy.

When it comes to damage to the property, the minimum figure for which the contractor is required to take out insurance cover should be entered in the contract particulars and is unlikely to be less than £2m. And the contractor is only liable to the extent that the damage is caused by negligence or breach of statutory duty or other default of the contractor or their person and is only liable for losses caused by their own negligence.

If any damage occurs to the works, the contractor is required to inform the CA and the employer as well as the insurers and the contractor is required to authorise the insurers to pay all monies under the works insurance policy direct to the employer. Where the damage to the works and site materials is covered by the works insurance policy, and after any inspection required has been made by the insurers, the contractor is then obliged to make good the damage and continue with the works.

In the case where the second insurance policy is taken out by the employer, or the employer has effected the works insurance policy under the thirty insurance option, or where loss is caused by an excepted risk, the CA must issue instructions regarding the rebuilding of the work which is treated as if it were a variation and will be paid for under the normal interim certificates. The contractor is less at risk as the employer will have to bear any shortfall in the monies paid out and, as the work is treated as a variation, the contractor may be entitled to loss and/or expense and an extension of time.

MW16 contains provisions enabling either party to terminate the employment of the contractor in the event that work is suspended for a period of one month or more as a result of loss or damage to the works caused by any risk covered by the works insurance policy or by an excepted risk.

8. So that covers Indemnity and Insurance, lets look at the Termination process under the contract:

So the Minor Works Contract provides the employer with the right to terminate the contractors employment in the event of specified defaults by the contractor prior to practical completion, such as suspending the carrying out of the works, or in the event of insolvency of the contractor, or in the event of corruption, or in the case of the Minor Works Contract with Contractors Design, the design of the contractors design portion, failing to proceed regularly or diligently with either of these and breach of the CDM Regulations. Upon termination the contractor must immediately leave the site and the employer doesn’t need to make any further payment until the works are complete and may recover any losses resulting from the termination from the contractor. Unlike the SBC & IC, the Minor Works Contract has no provision for repeat defaults. In terms of insolvency of the contractor more specifically, under the Minor Works Contract, the employer has the right to terminate the contractors employment in the event of insolvency but they also have a few other options they may choose to consider. The employer can either terminate the contractors employment and appoint a new contractor to complete the works, or they can allow the original contractor to come up with a rescue package or if the original contractor can’t continue, another contractor may be notated to complete the works under a true novation or conditional novation. On a ‘true novation’, the substitute contractor takes over all the original obligations and benefits, whereas under a ‘conditional novation’, whereby the contract completion date, etc. would be subject to renegotiation, and the substitute contractor would probably want to disclaim liability for that part of the work undertaken by the original contractor, which is the most likely option. Following termination, the employer may employ others to complete the work and may use any temporary buildings, equipment, etc. on the site for that purpose and no further sums will become due to the Contractor under the contract. This relief from the obligation to make payments already due applies in only two circumstances: if the employer has already issued a pay less notice or if the contractor has become insolvent after the last date by which a pay less notice could have been issued.

Now, termination can also be initiated by the contractor in the event of specified defaults by the employer, such as failure to pay the amount due on a certificate or causing the work to be suspended for a period of more than one month or due to employer insolvency or fails to comply with the requirements of the CDM Regulations. So if the contractor wishes to terminate their employment they must first issue a notice, which must specify the default complained of and require it to be ended, this warning is sent to the employer and if the default is not ended within 7 days of receipt of the notice, the contractor may then by further notice, or within 10 days from the expiry of the 7 day notice, terminate their employment and termination takes effect on the date of receipt of the notice. Upon termination the contractor prepares an account setting out the total value of the work at the date of termination plus other costs relating to the termination. This account is then submitted to the employer, and the employer must pay the amount properly due within 28 days of its submission

Termination can also be initiated by either party in the event of natural causes that might cause the work to be suspended for a period of one month or more. One of the listed neutral events is loss or damage caused by any risk covered by the works insurance policy or by an excepted risk, in such an event, the contractor may not issue a notice where the damage has been caused by the negligence of the contractor. 

9. And last but not least, lets look at the last section of the contract, Dispute Resolution

The Minor Works Contract lists negotiation, mediation, adjudication, arbitration and legal proceedings as the means by which any disputes may be determined. The parties are required to decide in advance which of the processes will be used and make relevant deletions to the articles. It is important for the contract administrator to understand the options and to be able to give appropriate advice. Either party has the right to refer any dispute or difference to adjudication as stated within the Housing Grants, Construction and Regeneration Act which applies to all construction contracts. MW16, however, may well be used in situations which come within the exception set out in section 106 of the HGCRA 1996, which states that the Act does not apply to a ‘construction contract with a residential occupier’. In such cases there will be no statutory right to adjudication, but, unless the parties indicate otherwise, adjudication will still be a contractual right.

Final determination of any dispute or difference will be by means of arbitration, if the parties, however, prefer to use arbitration this must be indicated in the contract particulars, otherwise the dispute will be resolved by litigation. Any dispute is better to be first approached using negotiation or adopting some voluntary method of agreement before formal procedures are chosen. The Minor Works Contract includes for mediation to be used, as unlike adjudication, arbitration or litigation, mediation is a non-adversarial process which tends to forge good relationships between the parties. 

If mediation fails, then the parties can revert to adjudication, arbitration or litigation. Under adjudication, the adjudicator may either be names in the contract particulars or nominated by the nominating body. The party wishing to refer the dispute to adjudication, they must first give notice identifying the dispute or difference, give details of where and when it has arisen, set out the nature of the redress sought and include the names and addresses of the parties. The adjudicator appointed is then required to act impartially, and to avoid unnecessary expense. The adjudicator will then set out the procedure to be followed. A preliminary meeting may be held to discuss this, otherwise the adjudicator may send the procedure and timetable to both parties. The HGCRA 1996 (as amended) requires that the decision is reached within 28 days of referral. Parties will have to meet their own costs unless the adjudicator has the power to award costs. The adjudicators decision will be final and binding until the dispute is finally determined by legal proceedings, arbitration, or agreement between the parties. If either party doesn’t agree with the decision, they can raise the dispute again in arbitration or litigation.

If Arbitration is followed, the arbitrator has power derived from a written agreement between the parties to a contract and is subject to the Arbitration Act 1996. Arbitration awards are enforceable by law and can be subject to appeal on limited grounds. The party wishing to refer the dispute to arbitration must give notice identifying briefly the dispute and requiring the party to agree to the appointment of an arbitrator. If they fail to agree within 14 days either party may then apply to the ‘appointor’ selected in the contract particulars. The arbitrator has the right and duty to decide all procedural matters, subject the parties right to agree any matter. Within 14 days of appointment, the parties must each send the arbitrator and each other a note indicating the nature of the dispute and amounts in issue, the estimated length of the hearing and the procedures to be followed. The arbitrator must hold a preliminary meeting within 21 days of appointment to discuss the matters at hand and the first decision is wether a short hearing, documents only or a full procedure is to apply. Under the documents process, the arbitrator makes the award based on the documentary evidence only, under the full procedure process the arbitrator will hold a hearing where the parties or their representatives can put forward further arguments and evidence. Under the hearing process, a hearing is held within 21 days of the date when the process is chosen and the parties must exchange documents not later than 7 days prior to the hearing. And then the arbitrator published the award within 1 month of the hearing. Costs normally are based on whoever wins, the losing party pays and the proceedings are kept private, unlike litigation.

If litigation is chosen, proceedings are usually initiated by the claimant filing a claim at the appropriate county court. The court will the allocate the case to a ‘track’ (small claims, fast track or multi track) depending on its size and complexity. A judge will hear the case, and although, in the past, parties were required to be represented by barristers, now they may represent themselves, or elect to be represented by an ‘advisor’. In court, the proceedings are open to the public and the press, and the judgment is published and widely available.

So to sum up what I discussed today:

• The day to day control of the works are entirely the responsibility of the contractor.
• the CA’s responsibilities under the contract and the control the role has over the works, is to supply the necessary information, issue instructions and certificates or notices.
• Under the Minor Works Contract with Contractors Design, the contractor is required to provide the CA with copies of drawings or details specifications for materials, goods and workmanship, and related calculations and information as are reasonably necessary to explain the Contractors Designed Portion
• Under the Minor Works Contract, the CA has the power to order variations but does not have the power to alter the nature of the contract. 
• All variations may result in an adjustment of the contract sum and give rise to a claim for an extension of time and direct loss and/or expense.
• The Minor Works Contract, allows for the contract sum to incorporate the cost of variations as the works progress and for the direct loss and/or expenses due to any resulting disruption and for costs and expenses due to suspension.
• The CA has the duty to certify sums properly due to the contractor, including valuations and issuing certificates.
• Under the Minor Works Contract, the final certificate is not conclusive evidence that any obligations under the contract have been discharged, unlike other JCT forms.
• The contract allows provision of three different types of insurances that can be taken out, one is for use with new buildings with no existing structures taken out by the contractor, the second is for use with existing buildings and is taken out by the employer and the third is used where neither of the other two options are appropriate and the parties agree their own insurance arrangements and is set out in the contract particulars. 
• The employer has the right to terminate the contractors employment in the event of specified defaults by the contractor prior to practical completion and the contractor can also initiated termination in the event of specified defaults by the employer
• The Minor Works Contract lists negotiation, mediation, adjudication, arbitration and legal proceedings as the means by which any disputes may be determined. The parties are required to decide in advance which of the processes will be used and make relevant deletions to the articles.