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CAASA NEWSLETTER JANUARY 2025

The motivation behind this monthly newsletter is to provide better and more frequent communication to CAASA members, and to solicit suggestions and responses to the contents. We need input from you to ensure that the content of this newsletter, our webinars and annual conference remain both topical and relevant.

Any comments, suggestions or proposals please forward to secretary@adjudicators.co.za

CONTENTS:
2024 UK Adjudication Survey – tracing trends and driving reform[1]
Webinars
Mentoring

[1] 2024 Construction Adjudication in the United Kingdom: Tracing trends and guiding reform
Professor Renato Nazzini & Aleksander Godhe

2024 UK ADJUDICATION SURVEY

Welcome back to all CAASA members (which now stands at 161). I trust you all had a restful and fun filled festive season.

In November 2024 the King College Centre of Construction Law and Dispute Resolution, based in London, in collaboration with the Adjudication Society, published the latest survey findings.

The responses to the survey were not only provided by adjudicator nominating bodies (ANB’s), but also from individuals involved in the field of adjudication. A total of 2264 referrals to adjudication were reported in 2024, an increase of 9% over the previous year, and a new record. This proved that adjudication had become more popular. As we all know adjudication in the UK is mandatory when dealing with construction disputes, legislation which we in South Africa are sorely lacking.
Only a small proportion of the decisions were challenged in the TCC and of those, the vast majority were fully enforced. The average time between referral and decision was between 29 and 42 days. the longer periods related to more complex disputes, however party behaviour, or the lack thereof, was a contributing factor in 24% of the cases.

By comparison the London Court of International Arbitration (LCIA) recently published statistics showing that the median LCIA arbitration lasts a total of 20 months, from the date on which the Request for Arbitration and registration fee are received by the LCIA to the final award. I am sure SA arbitrations are of a similar length of time, if not longer. Surely this is proof that adjudication should be legislated.

Of particular interest in the adjudication survey is that seven of the ten participating ANBs – CIArb, CIC, ICE, RIBA, RICS, TECSA and UK Adjudicators – also offer a low value or fast-track adjudication procedure (or equivalent). A considerable number of referrals received by these ANBs in the past year were adjudicated using this procedure, namely 425 out of the total 2,243, accounting for almost 20% of adjudication referrals received by these ANBs. For CIArb, 51% of received referrals were adjudicated using a low value or fast-track adjudication procedure (or equivalent), while the proportion stood at 35% for ICE, followed by UK Adjudicators at 23%.

The most common value of claims was between £125,001 and £500,000, which was reported by 42% of questionnaire respondents. The number of responses dropped significantly in relation to claims of £5 million and above.
The leading causes of disputes in 2024 were:

Inadequate contract administration (50%)
Lack of competence of project participants (42%)
Exaggerated claims (30%)
Changes by client (30%)
Adversarial (industry) culture (25%)
Lack of professionalism of project participants (24%)
Inadequate contract documentation (19%)
Unclear risk allocation (17%)
Poor communications (17%)
Personality clashes (13%)
Inadequate design information (13%)
Unrealistic time/cost/quality targets (by client) (11%)
Inaccurate design information (10%)
Inappropriate payment modalities (10%)
Unrealistic tender pricing (10%)
Client’s lack of information or decisiveness (9%)

The most common categories of adjudicated claims in the past year were ‘Smash-and-Grab’/technical payment claim adjudications at 63%, followed by ‘true value’ (final accounts), ‘true value’ (interim payments), and loss and expense and/or damages for delay and/or disruption claims, selected by 38%, 35%, and 35% of questionnaire respondents respectively.

(A “smash and grab” adjudication involves a contracted party claiming a sum that was applied for but never challenged in any valid payment or pay-less notice. The employing party is obliged to pay the notified sum regardless of any dispute as to the proper value of the payment application).

Parties can resist enforcement of adjudicators’ decisions on the grounds of lack of jurisdiction and/or breach of natural justice.

A jurisdictional defence was raised, most frequently either alone or in combination with natural justice, in a total of 128 cases out of 219 referred to the TCC, accounting for almost 60% of all cases. Breach of natural justice allegations were made in 72 cases – 32% of the total number. Other grounds for challenging the adjudicator’s decision were through an application under Part 8 of the UK Civil Procedure Rules or an application for a stay of execution due to the insolvency of the applicant. In several cases, the responding party alleged fraudulent behaviour by the other party as a defence.

The overall picture that emerges from this report confirms the findings of the previous two reports: adjudication is and continues to be in good shape in the UK, within a clear and robust legal framework, strongly supported by the courts. Adjudication benefits, in particular, from well-established and reputable ANBs that, despite not being regulated, have served and are serving the industry well by keeping panels of adjudicators, making appointments, providing training, and applying and enforcing professional standards.

WEBINARS

We again appeal to all our members, and particularly our panelists, to come forward and prepare and present at one of our monthly webinars. The time slot is for no more than an hour.

If you go to the CAASA website under the Training tab you will find the proposed schedule and topics for 2025. We have tried to follow three broad themes. However if you have some other topic which you believe will be of interest please share this with me at chairman@adjudicators.co.za.

MENTORING

To date we have received 4 requests to come onto our mentoring programme which we plan to kick off in March and run for the balance of the year. We have had our first volunteers putting up their hand to act as mentors. However, given the challenges of geographical location and the like we require more volunteers from our panelists.

As you can see from the above survey training and maintaining professional standards is a critical factor for any ANB. If any panelists are willing to act as mentors please contact me at chairman@adjudicators.co.za.