SUBCONTRACTORS WILL be protected from damaging delay tactics by main contractors in contract disputes following a landmark decision released by the Court of Appeal this week.
The ruling outlaws the use of Clause 18 (2) of the FCEC Blue Form which requires disputes with subcontractors to be dealt with jointly with main contract disputes. The clause allows claims to drag on for years.
It came in the case of Redland Aggregates v Shepherd Hill Engineering. Redland was claiming £500,000 it said it had been owed since 1995. A panel of judges said contractors could only defer the subcontractor's dispute for a reasonable period, indicating this could be as short as three months.
The judges added that if the main contractor did not pursue the arbitration as part of main contract negotiations within this reasonable period, the subcontractor would be free to proceed with an arbitration between itself and the contractor. Shepherd Hill considering an appeal.