9.11 Concern has also been expressed to me about the operation of Supreme Court Rules 14 and 29 relating to Summary Judgement or interim payment of awards. The Official Referees Solicitors Association (ORSA) has made proposals about interim payments:-
1 The amount of any interim payment should be the court's best estimate at that stage of the amount for which the plaintiff would succeed, taking account of any serious cross claims by the defendant which might be sustained.
2 If the court is unable to make an adequate estimate, it could refer the matter for report by a Court Adjudicator, whose recommendation would normally be accepted.
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(Source: Discussion Paper by ORSA, "Interim Payment Awards in Building Contract Cases", July 1992.)
9.12 The draft Arbitration Bill published by the DTI also contains, in clause 14, proposals for possible interim payments. However, the wording of subclause (1) requires the arbitrator (or "tribunal") to be "satisfied" that the respondent will be found liable to pay to the claimant a sum at least equal to the amount of the interim payment. If the arbitrator acts in practice as the courts have done over RSC Orders 14 and 29, the likelihood is that few such awards would be made. Clause 14 (3) of the draft Bill would also allow the parties to omit such provisions by agreement. The commercial dominance of some parties in construction contracts suggests that it is better not to have clauses which "allow" participants to opt out of fair dispute resolution procedures.
9.13 Recourse to the courts or arbitration should become less frequent because of other changes which I have recommended to procurement practice, contract conditions, tighter restrictions over set-off and the introduction of adjudicators as a normal procedure for settling disputes. The detailed working of the Courts of Justice, of which the Official Referees are a distinguished part, is not a matter on which I feel competent to make recommendations. Very senior judges have stressed that holding up the flow of cash is bad for the construction industry87. If adjudication is introduced as the normal method of dispute resolution in construction, the courts will perhaps take account of the wishes of the industry to ensure that cash does flow speedily. But one regrettable possibility could be if a party to an adjudication refused to honour the award of the adj udicator immediately, or even to discuss the use of stake holders, despite being bound to do so. In such circumstances, the party to whom the award had been made should be able to approach the Official Referee immediately and obtain a judgement for payment under an expedited procedure as suggested by ORSA, be it under Rules 14 or 29, or any other appropriate legal provision. It would be fatal to the adjudication system if one party successfully attempted to use greater financial strength to exhaust the other by delays in settlement. The courts should have a role to support the adjudication system in such circumstances.
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87 C/fLord Justice Lawton "The Courts are aware of what happens in these building disputes; cases go either to arbitration or before an Official Referee; they drag on and on; the cash flow is held up....that sort of result is to be avoided ifpossible" (Ellis Mechanical Services vs. Wates Construction Limited, 1976,2BLR 57).