CAASA CHAIRMAN’S NOTES MARCH 2023

Virtually all construction contracts will provide for adjudication as one of the tiers in the dispute resolution process. There is no doubt that a great deal of education needs to take place around the use of adjudication as a means of resolving construction disputes.

Coulson L.J. identified three characteristics which in his view are essential for an Adjudicator to possess: firstly, the ability to manage time in order to facilitate the resolution of the adjudication within the prescribed timeframe with the use of a timetable; secondly, the ability to grasp essential issues quickly and focus on these issues while avoiding distractions; and thirdly, the ability to treat parties fairly and courteously and pay due attention to their submitted documents.

In all Adjudication Rules it is emphasised that the adjudicator:

• is not an arbitrator,
• may conduct proceedings as he believes appropriate
• is not required to observe any rule of evidence, procedure or otherwise, except the rules of natural justice
• may apply his expert knowledge and experience, either as provided in the Rules, or as agreed by the parties 
• may take the  initiative in ascertaining the facts and matters required for a decision

The outcome of adjudication is interim finality in order to promote cash flow, whereby the Adjudicator’s decision is binding on the parties, unless or until the dispute is re-opened either in litigation, arbitration or resolved by agreement.

Referring a dispute to adjudication when the dispute arises means the parties have equal leverage. The Contractor desires to be paid, the Employer wants his project completed. Yet typically the parties will “park” their disputes, wait until the project is completed and then try and arrive at a “global” settlement. When this fails only then do they commence with adjudication.

By this stage key personnel have left, important records are mislaid or missing, memories have faded. The new people involved do not have the background to decide which claims to pursue and which should be dropped. Common sense is often discarded when weighing up the likelihood of success v costs to be incurred.

Furthermore given that the disputes have now accumulated in value the parties normally “lawyer up” and in so doing  relinquish control of the timing and cost of the process.  Invariably lawyers seem to prefer other lawyers such as senior counsels or retired judges as adjudicators, missing the opportunity to appoint someone experienced in the industry with good knowledge of the issue in dispute. All too often adjudication transforms into arbitration.

All these factors have lead to the perception that adjudication does not work, or that the outcome is far from satisfactory.

This is not to say that the legal fraternity does not have a place in adjudication, they certainly do. However it should not be the default position.

Some Adjudication Rules specifically deal with legal representation:
The GCC 2015 Rules stipulate that “The parties may be represented and/or assisted by persons of their choice, provided that formal legal representation of one party has the written consent of the other party.”     
In relation to the adjudicator holding a hearing the JBCC December 2020 Rules state “ The Adjudicator shall …….refuse admission to any person(s) other than the parties and their respective representatives, if such representation was agreed to in writing by the parties, and witnesses to any hearing or meeting.”

The FIDIC 1999 Red Book, which is still in widespread use, is silent on the matter of legal representation. The NEC is the same.

Adjudicator nominating bodies (ANB’s) such as SAICE and CAASA can provide adjudicators from a variety of professional backgrounds -  quantity surveyors; lawyers; engineers; architects; construction consultants.
So, in summary, how to get the best out of the adjudication process:

1. deal with the dispute as and when it arises;
2. appoint an adjudicator appropriate for the dispute;
3. lawyer up if you must, but adhere to the prescribed time frames and insist the respondent does the same; and most importantly, in the words of Kenny Rogers
4. know when to hold them, know when to fold them, know when to walk away, know when to run……….

N MILNE
Chairman