CAASA CHAIRMAN'S NOTES

As I look out my window it is evident that spring is finally here. Unfortunately any green shoots are those in nature only, not our economy. The 2Q2020 GDP figures were released on 8^th September and confirmed what everyone suspected – our economy tanked.

The construction industry decreased by 76,6%, the 8^th consecutive quarter of economic decline. Gross Fixed Capital Formation which comprises of construction works, machinery and other equipment, residential buildings, transport equipment and non-residential buildings, decreased by 59,9%. Predictions are that it will take 2-3 years to get back to pre-covid levels, which were hardly shooting the lights out in the first place. 

The COVID-19 pandemic and consequent lockdown had employers, engineers, project managers and contractors scrambling for their contracts, untouched but dusty in the bottom drawer,  to find which provisions entitled them to relief. “Force Majeure” and “Changes in Legislation”  were the most popular bases for claims. Each standard form of contract used in SA – NEC, FIDIC, GCC, JBCC - deal with these differently, as did employers and engineers. One large public employer prepared an amendment to his current contracts to the effect that the engineer or project manager would not assess any COVID related claim, and the employer would do so instead , who now is both judge and jury.  

The pandemic was of nobody’s making.   The sensible thing to do was to sit down with the contractor and reach an agreement, unlike the insurance industry which is relying on small print and semantics to avoid paying out.

There is an alarming trend taking place in the construction dispute resolution environment where arbitration is morphing into litigation, adjudication into arbitration. The very purpose of adjudication – rough but speedy justice on an interim basis – is failing. Unlike the English Technology and Construction Court we have no specialist court dealing with such matters, no learned judges, nor do we have the depth of legal precedence built up over many years. To avoid this parties to construction disputes favour adjudication and arbitration as prescribed in the contract. Unfortunately, and here I generalize, their first port of call is to bring in  the lawyers. The dispute is taken out of the hands of the parties and managed by others. Before the parties blink they have an instructing attorney and senior counsel on each side, with a retired judge as the adjudicator or arbitrator in the middle.     

We need to get back to the basics, and this is where CAASA can play a real role. We want to be the association of choice  when an adjudicator is required. We have both the technical and legal expertise. We need to give decisions as speedily as possible, without trampling on the rules of natural justice.  There are nominating bodies in the UK that have introduced a fixed fee cap on low value disputes that are straight forward in nature.    This is something we should explore.  There is a large body of low and mid-tier contractors who would benefit greatly from just such a service.

CAASA has two primary objectives, firstly to promote adjudication as the preferred means of resolving construction disputes, and secondly to have a panel of experienced and capable adjudicators. Some applications are declined due to the applicant lacking practical experience. It is a chicken and egg situation, since the only real way to gain experience is by acting as an adjudicator. We are developing a programme to address this. More details will be forthcoming in the near future, with a plan to kick off the process in the new year.   

Norman Milne, CAASA Chairman

NEW CAASA Q&A

Question:
I am acting as an adjudicator and one of the parties is challenging my jurisdiction. I know I need to enquire into my jurisdiction. What do I need to consider?
 
Answer:
Some of the questions you should be asking are:

1. Is there an agreement to refer disputes to adjudication?
2. Has the adjudicator been properly appointed in terms of such agreement?
3. Has a dispute arisen which is capable of being referred to adjudication?
4. Are the parties to the dispute the same as those that entered into the contract?
5. Has the dispute been previously decided?

 
Regardless of whether there is a challenge to the adjudicator’s jurisdiction, there should always be an enquiry into jurisdiction
 
Where a challenge has been made the adjudicator should investigate such challenge and satisfy themselves as to the validity or otherwise of such challenge. If the challenge has merit then the adjudicator should refuse to proceed with the adjudication unless and until he or she has jurisdiction. If the challenge is without merit, then the adjudicator should notify the disputing parties of his or her view and proceed with the adjudication.

Have an adjudication related question that you would like answered? Email us at admin@adjudicators.co.za.

INTRODUCING THE CAASA EXCO 

We are pleased to introduce the new CAASA Executive Committee as follows:

Chairman
Norman Milne
chairman@adjudicators.co.za

Deputy Chairman
Francois Spies

Treasurer
Barry Herholdt
treasurer@adjudicators.co.za

Secretary
Kelly Stannard
secretary@adjudicators.co.za

General members
Arvitha Singh
Michelle Kerr
Damian James
Jonathan Ely
Stephanie McDonald
David Spooner
Reg Reynolds
Vaughan Hattingh