Adjudication

In my articles for Building magazine, I refer to cases concerning adjudication as case number X in my series. Some have asked for further details or a copy of that list, so here it is.

On Friday 1st May 1998, the Commercial Construction Industry took a great step forward. Jobs, quality of work, safety, and timely performance will now benefit from what is known colloquially as the Construction Act. Construction contracts, save for a few notable exceptions, will provide a statutory right to a 28 day dispute decision making process called Adjudication. The right arises in "The Housing Grants Construction and Regeneration Act 1996". It applies under that name in England Wales and Scotland; in Northern Ireland it applies since 1st June 1999.

This new Adjudication process is quite unlike anything that has held the ring between disputing parties in commerce. Existing Arbitration, Expert Determination, Conciliation, Mediation all require a consensual approach; both parties must agree to take their dispute to any one of those dispute processes. Not so New Adjudication. Parliament now provides that each Construction Contract shall provide that any party may call for this new referee. If there is a dispute between Developer and Main Contractor either party is entitled to forthwith call for this new person. The Adjudicators burden is to decide on the rights of the parties under the building contract and do so within the strict 28 day time frame. The "Decision" is binding forthwith. It can only be overturned, revised or confirmed in Arbitration (if the contract contains an Arbitration clause) or in litigation. It has "temporary finality" and is an announcement by an independent referee as to the rights of the contracting parties.

As for the procedure . . . how to adjudicate, it will often be that the machinery is laid down in the adopted Adjudication Rules or Standard Form Contract. By procedure we mean giving each party a reasonable opportunity of putting his case and dealing with that of his opponent. The watchword is fairness. Important too is not to lose sight of the adjudicator’s fundamental task: it is to decide the case put by the parties. No adjudicator can “make a case” for either party. No adjudicator is there to “find” the evidence, nor there to undermine a party’s case, nor there to dig for rights or duties. If an adjudicator investigates at all, it will be to clarify points of fact or law in the party’s case. It is vital that each party prepares his position on facts, evidence, rights and duties before he comes to adjudication. Important too that he has put his case already to the ‘other-side’. Remember, the adjudicator will have little time to do much more than decide upon the written case, as put. It is a contest between ‘A’ and ‘B’ not an investigation by the adjudicator.

Why Adjudication? British Construction offers its customers great flexibility. Many a construction project is designed and built on the hoof. Changes are inevitable ... and welcome. But change means change in price ... and programme. Disputes are ordinary. If the dispute is not efficiently managed it reduces itself and the project to conflict. Quality, time, safety suffers. And, occasionally it is true that some folk took advantage; the withholding of money was too easy. The New Adjudicator will quickly identify half baked claims; the building project will not be stymied by wrong headed nonsense.

The Construction Contracts in scope are not only large scale industrial and commercial building and civil engineering but include also the refurb to the High Street shop. Professional service contracts between Architect and Client are also classified as Construction Contracts. Excluded however are contracts between domestic house owners and the outfit building an extension. So too excluded is the supply only of building materials. Pity. Perhaps those areas will one day be brought into scope.

The construction industry welcomes this innovation. It has long since become tired of long drawn out squabbles. Parliament and cross party co-operation is to be congratulated. This will work.