Weathertight Homes Resolution Service won’t work, says Smith

United Future MP, Murray Smith, told Parliament today that he believes the Government’s efforts to provide a quick and cheap disputes resolution process for leaky homes won’t work.

Mr Smith, who is sitting on the Government Administration select committee which is inquiring into the problem, said the Weathertight Homes Resolution Service sounds good in theory and suggests that the Government is doing something for homeowners.

”But I predict it will produce a lot of dissatisfaction as homeowners enter the system hoping to get a resolution to their problems and become highly disillusioned when it doesn’t produce the results they expect,” he said.

“Mediation only works where there are willing parties. The fundamental issue is therefore whether the suppliers involved stand by their product and their workmanship or not. It they do, then the problem will in most cases be able to be resolved through informal discussions without the need for mediation.

“If they don’t, then in most cases the suppliers simply won’t turn up,” he predicts.

“Mediation is also unsuitable when there are more than two or three parties and when the issue is complex and most of the disputes fall into both categories with architects, manufacturers, builders, subtrades, local authorities and building certifiers, the Building Industry Association, previous owners, building consultants and even lawyers all within firing range. And everyone acknowledges that the issues are complex,” he said.

In the case of the proposed adjudication, Mr Smith says that the Construction Contracts Bill dispute resolution procedures are not suitable in this case. Again they are designed for simple debt collection disputes based on clear contracts and mostly requiring a low standard of evidence. They are also designed to provide remedies for tradesmen who are owed money by head contractors. In the case of leaky buildings the “head contractor” is the homeowner – the one whom the Government is trying to provide remedies for and so the Act’s intentions would be reversed.

He says this is evidenced by the remedies that the Bill provides which are simply injunctive – suspending work if not paid and obtaining charging orders over the construction site.

“This is hardly protection for home owners,” said Mr Smith. “Decisions are also not final so people are going to have to go through the Courts to get an enforceable judgment anyway.”

The MP’s solution is to take all such cases straight to the District Courts, appoint more judges and Court staff if necessary, and instruct the Courts to give weathertightness issues top priority.

“The District Court has pre-trial hearing and mediation powers that can be used to restrict the issues in the dispute and try to bring about a negotiated resolution,” Mr Smith said.

“But they also have the powers to compel all relevant and non-privileged evidence to be disclosed and most significantly would avoid the establishment of yet another layer in the judicial process and prevent administrative duplication.”

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