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Graham Watts Another folly of Mr Mandelson's

It is widely supposed that John Prescott and Peter Mandelson don't get on. I suppose that Peter Mandelson and Geoffrey Robinson must get on, for the sake of £373,000, but you never know.

Prescott and Robinson were linked through Egan and the implementation of his report, Rethinking construction. The whole Egan process is Prescott's brainchild, stemming from the simple desire to get more social housing for his capital receipts.

Robinson was involved in its implementation as a member of the steering group overseeing the Movement for Innovation in Construction (M4I). It was a brief membership - the group met for the first time on 21 December and Robinson was out of office two days later.

Mandelson knew nothing about Rethinking construction or the M4I. His involvement with construction was limited to being Mr Millennium Dome and presenting last year's prestigious Stirling Prize for architecture. A crab called Peter made a guest appearance in John Prescott's hands on the day that the latter mistakenly slated the UK construction industry for not winning Dome contracts.

The crab struck back. One of Mr Mandelson's last acts as Trade & Industry secretary dealt a significant blow to Mr Prescott's objectives for improving UK construction.

The DTI was responsible for conducting a review of the Law Commission's Feasibility Investigation of Joint and Several Liability. This little item had been running for several years and in its Business Manifesto the Labour Party promised a fundamental review of this daft law. The Law Commission had opted for no change but then lawyers still have to wear 18th century wigs - while earning 22nd century salaries - so this was hardly surprising.

The consultation process asked whether the wider world agreed with the Law Commission's narrow view. The largest response was from construction interests where 28 out of 29 respondees were opposed to the Law Commission and in favour of a full review. This pressure for a review was backed by almost every group except for the legal interests, where 15 out of 21 opinions were for the status quo.

Only 32% of more than 130 responses agreed with the Law Commission and 60% were opposed. In order to justify its backing for the Law Commission, the DTI summary of the process gives added weight to the legal respondents. You know the sort of thing, the intellect of one solicitor must be equal to at least three civil engineers.

This arcane and irrational law leads to unnecessary and costly litigation - it breeds complex, multi-party actions where anyone within shouting distance (and holding a PI insurance policy) is routinely brought into an action with no regard to their actual culpability. It costs everyone, especially the clients, and it benefits no-one except perhaps for maximising the scope for legal fees. Little wonder that the legal interests voted against a review while everyone else wants one.

What is surprising is that Mr Mandelson fell for it. Despite the 60% majority, he concluded that 'no sufficient basis had been identified for a fundamental review of the law affecting professional liability'.

Joint and several liability is counter-productive to the process of promoting the collaboration and co-operation that are essential to the improvement of UK construction. Prescott shares the Egan vision of an industry where clients and their supply chain are joined together by partnering in strategic alliances. The reality is that this law encourages fragmentation and adversarialism.

Mr Mandelson had the chance to do something about it but he chose to focus solely on the legal defence of a 'nice little earner' to the exclusion of the law's ongoing operational and economic consequences.

'Joined-up Government' began the new year badly. The headlines focused on the jucier story concerning Messrs Mandelson and Robinson and on other matters where lateral thinking took a holiday. Policy differences between the DETR and DTI on convoluted legal matters are not as interesting as Mr Straw keeping his kids off school while Mr Blunkett berates parents for doing just that. But Mandelson's decision to close the door on liability law reform is perhaps a more meaningful example of disconnected government.

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