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Contents

Section 1 Sources of Law

Section 2 Court Procedures

Section 3 Alternative Dispute Resolution in the Construction Industry
                                             


 

Description:  The purpose of this unit is to introduce you to the English Legal System and it's relevance to the Construction industry.

Author:  Gates MacBain Associates


Section 1  Sources of Law




Aims and Objectives

At the end of this section you should be able to:
  • Explain how the laws of England and Wales are made.


There are a number of ways that laws are formed. 


Common Law 

This is the law which developed from the common customs of the country formulated by the old courts over the centuries.  The essence of common law is that it is made by judges sitting in courts, applying their common sense and knowledge of legal precedent to the fact before them. Because common law consisted of using what had gone before as a guide, common law places great emphasis on precedents. Consequently any decision made by the Supreme Court (the highest court in England and Wales), is binding on every other court who will follow its directions. Also any ruling made by a superior court is binding on subordinate courts in the hierarchy.

 
Hierarchy of Courts  

The courts have a hierarchy which, starting at the top are:  

The Supreme Court - the highest court of appeal in England and Wales. All cases must have gone through the other courts.  

Court of Appeal - hears appeals from the High Court. 

The High Court of Justice and The Crown Court. The High Court functions both as a civil court of first instance and a civil and criminal appellate court for cases from the subordinate courts.

The Crown Court is a criminal court of first instance at the same level as the High Court, established in 1971, which replaces the Assizes whereby High Court judges would periodically travel around the country hearing cases, and Quarter Sessions which were periodic county courts.  


Subordinate Courts 

The subordinate courts in England and Wales are Magistrates' and County Courts. Magistrates' courts are presided over by a bench of lay magistrates (or justices of the peace), or a legally-trained district judge (formerly known as a stipendiary magistrate). There are no juries. They hear minor criminal cases, as well as certain licensing applications. 

County courts hear minor civil cases, and are generally presided over by district judges. 


Criminal Cases 

Most criminal cases initially go to the magistrates' courts. For minor crimes (90% of cases), the case is dealt with by summary trial by the magistrates, who have limited sentencing powers. For more serious crimes, the magistrates decide if there is a case to answer and then sends it to the Crown Court, where the case is tried by a Circuit judge or a High Court judge, with a jury.   


Appeals 

There are various courses of appeal. From the Magistrates' Court, an appeal can be taken to the Crown Court on matters of fact and law. From the Crown Court, an appeal can be taken to the Criminal Division of the Court of Appeal. Appeals on matters of law can be taken to the Divisional Court of the High Court from the Magistrates Court or the Crown Court. Appeals from the High Court take the usual route via the Court of Appeal to the Supreme Court, which took over from the House of Lords from the 1st October 2009 as the highest court of the land.  


Civil Cases 

Under the new Civil Procedure Rules, civil claims under £5,000 are dealt with in the County Court under the 'Small Claims Track'. This is generally known to the lay public as the 'Small Claims Court' but does not exist as a separate court. Claims between £5,000 and £15,000 that are capable of being tried within 1 day are allocated to the 'Fast Track' and claims over £15,000 to the 'Multi Track'. These 'tracks' are labels for the use of the court system the actual cases will be heard in the County Court or the High Court depending on their value. Personal Injury cases have different values.   


Relationship with the European Court of Justice (ECJ)

Any court in the UK may refer a particular point of law relating to European Union Law to the ECJ for determination. However, once the ECJ has given its interpretation, the case is referred back to the court that referred it. Only the most senior courts in the UK are entitled to refer cases (e.g. the High Court of Justice of England and Wales or the Supreme Court). The European Union has no federal court system, just laws that must be interpreted the same way across all member states. 

 
Special Courts and Tribunals 

In addition, there are other courts and tribunals. Tribunals sit in judgement over a number of specialist areas, and frequently have appeals tribunals above them. For example, the Employment Tribunals (appeals to Employment Appeals Tribunal),VAT Tribunals, Land Tribunals etc. 

The tribunals will either give a right of appeal to the specific appeals tribunal (e.g. Employment Tribunal cases are appealed to the Employment Appeals Tribunal) which in turn allows appeals to the Court of Appeal or, in the absence of a specific appeals court, will have a right of appeal to the Queen's Bench Division of the High Court which has general authority over all lesser courts. 


A number of other courts also exist, these include:  
  • Administrative Court
  • Coroner's Courts
  • Ecclesiastical Courts
    
Legislation   

New laws can be made by parliament by the introduction of a bill which passes through a number of stages in order to become law.     

Pre-legislative scrutiny: It is increasingly common for a small number of Government bills to be published in draft before they are presented in Parliament. These bills are then considered either by the relevant Select Committee of the House of Commons or by a Committee of both Houses. This is not strictly speaking part of the legislative process, but it provides an opportunity for the Committee to express a view on the bill and propose amendments before it is introduced.   

First reading: This is a formality and no actual vote occurs. The Bill is presented and ordered to be printed and, in the case of Private Members' bills, a date is then set for second reading.   

Second reading: A debate on the general principles of the bill is followed by a vote. Normally, the Second Reading of a Government bill is approved. A defeat for a Government bill on this Reading signifies a major loss. If the bill is read a second time, it is committed to a standing committee for the committee stage.  

Significant amendments may be made at committee stage. In some cases, whole groups of clauses are inserted or removed. However, almost all the amendments which are agreed to in committee will have been tabled by the Government to correct deficiencies in the bill or to enact changes to policy made since the bill was introduced.   

Third reading: a debate on the final text of the bill, as amended. In the Lords, further amendments may be made on third reading, in the Commons it is usually a short debate followed by a single vote.   

Passage: The Bill is then sent to the other House (to the Lords, if it originated in the Commons; to the Commons, if it is a Lords Bill), which may amend it. The Commons may reject a bill from the Lords outright; the Lords may amend a bill from the Commons but, if they reject it, the Commons may force it through without the Lords' consent in the following Session of Parliament,   

A Bill may pass backwards and forwards several times at this stage, as each House amends or rejects changes proposed by the other. If each House insists on disagreeing with the other, the Bill is lost, unless the Parliament Acts are invoked.  The final stage is to submit the Bill for Royal Assent which can be done even if the Lords did not pass it.      




Websites




Publications

  • Owen, A, (1998) Law for the Construction Industry 2nd Ed, Harlow: Pearson Longman




Self-Assessment Task

  • Explain the ways that a law can be enacted in England and Wales.




Section 2  Court Procedures



Aims and Objectives

At the end of this section you should be able to:
  • Outline the process of taking legal action through the courts.


Civil action can be taken in the High Court or County Court, though the High Court can only be used if the claim is for more than £15,000. The procedures and forms used are the same for both courts. The court service provide an ‘Issuing a Claim Information Pack’ which includes N1 Claim Form and a number of leaflets for guidance, this is available from the County Court. 

Once N1 claim form has been completed it is returned to the court with the appropriate fee and the court will then serve it on the defendant (the person you claim owes you money). The defendant will also be sent a number of forms which will enable him to admit the debt or state his defence. Copies of any defence will be sent to you (the claimant) together with a questionnaire which is used by the judge to determine how the case will be heard.  If it is a simple case he will probably use the small claims track which is an informal way of resolving disputes and therefore does not need the use of solicitors. 

If you wish to use an expert you will need the judges permission which will appear on the form sent to you by the court, though it is worth bearing in mind that even if you win and are awarded costs the most that the judge can allow for an expert is £200. Any experts report must be sent to the court and the defendant. 

The court will either set a hearing date or a preliminary hearing.  A preliminary hearing is set if the judge feels that special direction is needed or if either party has no real prospect of winning. Alternatively, the judge can decide that the matter can be dealt with using only written evidence, in which case both parties must agree. 

Prior to the hearing you must ensure that if you intend to use any documents you have sent copies to the defendant.  You will have a limited amount of time to put your case to the judge so it is important that you set out all the relevant aspects of the case, it is useful to do this in note form, the defendant will then respond and put his side to the judge.  The judge will then make his decision and inform the parties of this and his reasons for it.   


Prior to taking Legal Action 

Before the matter is referred to the courts you should make every effort to resolve your differences and give the other party in the matter the opportunity to put their case to you.  You will need to show that you have done this and that you have behaved in a reasonable manner.  While doing this you should start to prepare for you case should the other party not respond to you.  The following should therefore be done: 
  • Request Payment – be courteous
  • Confirm details of case with debtor – in order to ensure that the debtor knows exactly what you are requesting and why, as this gives them the opportunity to query any point they disagree with
  • Document all correspondence – you will need this to prepare your case and show that you have been reasonable
  • Give notice of intention – state that if the other party does not respond within a reasonable time you will pursue the matter through the court.

Response from the Debtor 

The debtor is likely to respond in one of the following ways: 
  • Denies the claim
  • Admits the claim and requests time to pay
  • Ignores the court papers
  • Makes a counter claim

Dealing with the Courts 

If you are not able to resolve the dispute then the next set of action is either to pass the matter to a solicitor or to carryout the procedure yourself. If you intend to do it yourself, and for small amounts this is perfectly easy to do, you should follow the procedure set out below: 
  • Obtain Claim Information Pack – this is available from the court and contains all the forms and guidance needed to present the case.
  • Determine if the claim is to be made in the County or High Court – this will depend on the value being claimed, details of amounts are contained in the court information pack
  • Set out claim – the details of your claim and why it is owed to you
  • Issue claim through the court – involves giving the completed forms to the court and paying the appropriate fee.
In some cases the matter can be dealt with by the court without your attendance. If the other party contests the claim you will both attend and present your case verbally.  
The judge would then make a ruling and award in favour of one of the parties. The procedure is informal and, in a county court, you do not need to have legal representation. 


Enforcement of Court judgement 

If the court finds in your favour you will then need to get your money from the other party. If they do not have any money you could be throwing good money after bad in pursuing payment as you will need to start enforcement procedures which will cost you to do. The options that are available are: 
  • Warrant of Execution - against goods
  • Garnishee Order – Obtaining money from i.e. his bank
  • Charging Order – against property
  • Attachment of earnings
  • Bankruptcy
 A good guide to guide you through the procedures of court action can be found by clicking on the Court Claim link below.




Websites  




Publications

  • Owen, A, (1998) Law for the Construction Industry 2nd Ed, Harlow: Pearson Longman




Self-Assessment Task

  • Explain the process involved in taking a matter though the small claims court.





Section 3  Alternative Dispute Resolution in the Construction Industry




Aims and Objectives

At the end of this section you should be able to:
  • Explain the alternative dispute resolutions available in the event of a contractual disagreement and the advantages of each system.


The courts should always be a last resort in the remedy of a dispute and the various forms of building contract used within the construction industry provide for the use of other remedies in responses to problems in an attempt to avoid litigation. These are known collectively as Alternative Dispute Resolution (ADR) and provide a number of options which are:   


Arbitration 

This has become the main alternative to litigation. There is no compulsion to enter into arbitration unless a term within a contract states that the parties must do so. If arbitration is accepted as the method of ADR then legal action cannot take place until the process is complete. The arbitrator is appointed on the basis of their expertise in the subject of the dispute and who is independent of the parties concerned. Both parties must also agree the appointment of the arbitrator. 

Advantages 

    • Less expensive than a court procedure     
    • Faster than court     
    • Hearings are private and confidential. Bad publicity can be avoided
    • Timing and place can be arranged to suit the parties involved     
    • Arbitrators have expertise in the subject matter    
    • The parties can insist that the arbitrator visits the site and sees any disputed matters first hand.      

Disadvantages      

    • Courts are experts in law, and arbitrator may not be and may need to seek legal advice    
    • Arbitrators cannot compel a third party to attend the proceedings against their will. 


Procedure

Pleadings 

This is an exchange of formal documents between the claimant (person claiming to be wronged) and the respondent (the person alleged to have breached the agreement).     
  • Formal documents are produced by the claimant to set out the basis of the claim
  • The documents are then served on the respondent    
  • Respondent submits a defence and may also submit a counter claim      
  • The claimant receives the documents from the respondent and responds 
This series of documents defines the scope of the claim to be heard by the arbitrator. 

Each party must allow the other party access to any documents that support/justify their case.       

  • Parties may represent themselves or appoint legal council     
  • Claimant calls witnesses   
    • Witnesses are cross examined by the respondent 
    • Claimant may ask the witness further questions     
  • The respondent calls witnesses as above and the questioning procedure is repeated   
  • The arbitrator may visit site (or may have already done so)    
  • Arbitrator makes a decision and awards the judgement     

Mediation and Conciliation       
  • Mediation and conciliation are similar techniques and the terms are often used interchangeably     
  • The reasons for the dispute are explored under the chairmanship of an independent facilitator     
  • The aim of the process is to find a resolution to the dispute that both parties can accept    
  • Conciliation can also refer to a process similar adjudication. The difference is that a non-binding decision is made by the facilitator.   

The construction industry resorts to these techniques early in any developing dispute, as a quick and inexpensive way of finding a solution before the project or relationships become damaged.        

  • The mediator is most likely to be an experienced professional from the construction industry’s     
  • Mediation is offered as a service by a number of organisations      
  • Mediation is relatively informal and is often the best way of settling disputes.

If a solution cannot be found using mediation or conciliation then the dispute can be escalated to a more robust ADR or to litigation.     


Mediation Procedure   

Mediation is a flexible process and the procedures adopted are different for each kind of dispute. It is important, therefore, that the rules are agreed from the start.   ·     

  • Negotiations are conducted by the mediator (a neutral third party), who establishes the rules and ensure that all parties understand the rules    
  • The negotiations are informal, confidential and without prejudice    
  • The mediator chairs the discussion to establish the principal facts of the dispute and disregard any extraneous matters  
  • The representatives of each party must have the authority to settle, negotiate so that reference to a higher authority is minimised as this would slow down the process
  • Matter may be discussed with the mediator by one party without the presence of the other party. This may be done to avoid revealing confidential material to the other party or to explore options for a settlement    
  • Legal advisers may be present but are only there to give advice     
  • The proceedings must be immediately recorded   
  • Any settlement reached must be recorded appropriately   
  • Even if the mediation is abandoned a record should be kept as the discussions so far may have clarified the issues.     

The Process of Mediation    

  • The parties agree to mediation, are invited, are directed to mediate by contractual conditions or by a court     
  • A suitable mediator is agreed, appointed by a mediation service or recommended by a professional institution such as the ICE. The parties need to agree the appointment
  • Before any meeting both parties must submit a summary of the matters at issue.    




Publications

  • Owen, A, (1998) Law for the Construction Industry 2nd Ed, Harlow: Pearson Longman




Self-Assessment Task

  • List and describe the options that are available for resolving a contractual dispute using ADR.





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