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Govt to ditch opt-out clause from Latham

THE government looks set to drop the provision of crown immunity from the Latham Bill to be published in the next few days.

Contractors had feared that the government could use a constitutional crown immunity clause to allow Whitehall departments to opt out of binding laws on compulsory adjudication.

The Department of the Environment (DoE) and a majority of ministers believe the government should set an example to the construction industry and its clients.

But ministers at the Ministry of Defence (MoD) are understood to be lobbying for the opt-out to be retained.

If it is scrapped, the MoD will have to scrap or modify its new Defcon 2000 contracts which include only some of the Latham reforms.

Meanwhile, construction minister Robert Jones is understood to be working on a compromise between adjudication and arbitration, the two forms of dispute resolution being proposed for the Latham Bill.

Sir Michael Latham had originally called for statutory adjudication to be included in contracts to try to reduce the number of disputes in the industry.

This had the support of all sections of the construction industry. But an early draft of the Bill proposed using the quasi-legal system of arbitration instead.

This produced such strong opposition from all sections of the construction industry that it looked as though the Bill might be withdrawn.

Now sources say that the government position has been misunderstood.

What will be contained in the Bill will be a new form of arbitration which we hope will be acceptable to almost everyone in the industry, said one.

He added that fears for the future of the legislation now look to have passed, although others are concerned that ongoing disputes over the detail of the legislation both within the DoE and between the DoE and the Department of Trade and Industry could yet result in further postponements.

The Latham legislation is likely to exclude the engineering construction and process plant sectors, sources have told Construction News.

Such a move would contradict Sir Michael Lathams proposals. This means the new laws will cover building, civil engineering and professional services.