Change: What it is, how it is valued and who should resolve any dispute?

1st Feb 2011

A paper presented to meetings of the Society of Construction Law in Manchester on 26th April, Sheffield on 8th June and Cardiff on 27th October 2010.

Simon Lofthouse QC looks at the question of change in the context of two contracts: the JCT Intermediate Form of Contract 2005 and the FIDIC Red Book. He considers, first, what change (or variation) is and the need to ascertain the scope of the parties’ original responsibilities. He moves on to examine the process of valuation under the Red Book, contrasting that with the approach in the IFC contract. He then looks at disputes taken to arbitration. The dispute could broadly be about (i) whether the instruction constituted a variation; (ii) if so, whether it is a variation permitted under the contract; and (iii) if so, the proper valuation of that variation (or a combination of these issues). The paper concludes with a look at the need for arbitrators to be independent, and what that means.

This paper was first published by the Society of Construction Law.

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