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CAASA NEWSLETTER MARCH 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:
Artificial Intelligence in Adjudication
Smash and Grab Adjudication update
South African case clarifies whether a Payment Certificate issued under Government Contract is Debt or Liquid Document

ARTIFICIAL INTELLIGENCE IN ADJUDICATION

Artificial Intelligence, more commonly known as AI, has arrived and is here to stay. As adjudicators we can either ignore it and continue in our staid conservative ways or we can adopt the use of AI to improve the adjudication process, while clearly understanding where to draw the line in its use.

There are a variety of AI tools readily available which have the potential to enhance the efficiency and quality of an adjudication. The most impactful is clearly in research. AI tools outperform the more traditional search engines significantly, are far more user friendly, and are continually being improved. Once we to learn to frame our queries correctly the information given in return can be invaluable.

AI can assist in data analysis. Where we are confronted with reams of attachments running into several lever arch files AI can expedite the processing of information through text mining and text analysis tools. AI can help in text generation, structuring, generating and summarising texts, ensuring that the wording used is consistent and coherent, grammatically correct and clear.

Little things such as recording and creating Minutes of Meetings. How many of us sit in virtual meeting nowadays and find that someone has sent their “AI assistant” to the meeting in their place. This can extend to the transcription of Hearings, at a fraction of the cost of human stenographers.

Translation and interpretation, although seldom required in CAASA adjudications, is another place where AI can be of great benefit.

AI can also detect the use of AI. AI detection tools can detect deep fakes and assess the authenticity of submissions by ascertaining that it has not been fabricated by other AI technology.

And understand that AI is improving daily, tools are becoming more specialized and easier to use. Competition amongst AI providers is rife.

However we must always bear in mind that AI is a tool, an assistant, and that the adjudicator is mandated to provide his reasoned decision. Heaven forbid if we reach the stage where the adjudicator, having run out of time, resorts to AI to produce his decision.

There are associated risks. The confidentiality of the adjudication could be compromised. Inputting confidential data into a 3rd party AI tool raises concerns as to how that data is treated, protected from outside access, used for machine learning purposes and then potentially presented to third parties as output from the same use of the AI platform.

There is a risk that the impartiality and independence of the adjudicator may be affected. AI works via algorithms. Unintended bias may emerge due to the selection of a specific dataset and the configuration of a particular algorithm.    The result reaffirms the adjudicator’s thinking which may lead him to reject other cogent arguments – confirmatory bias.

There have been recent articles citing the use of fictitious court cases being used as legal precedence in pleadings. When the cited cases were researched it was found that they did not exist.

AI can greatly assist in the quality of an adjudicator’s decision. We just need to learn to use it correctly.

SMASH AND GRAB ADJUDICACTION

This article and webinar was published in the Damian James Delay and Quantum Experts newsletter.

Firstly, you might have seen in the UK courts that another decision relating to the 'Smash and Grab' adjudication came to a head a few months ago. In this article , Damian takes a look at the case. He cautions on the importance of following the correct legal procedures. If not, your case may fail, no matter how right or wrong your case may be.

On that same subject, we're hoping to put together a webinar in the coming month or two. We'll take a look at procedure and the 'Smash and Grab' or technical adjudication with some of the UK's best experts on the subject. Keep an eye on your email and our website for more details.

SOUTH AFRICAN CASE CLARIFIES WHETHER PAYMENT CERTIFICATE ISSUED UNDER GOVERNMENT CONTRACT IS DEBT OR LIQUID DOCUMENT

This article was published in a Pinsent Masons newsletter recently.

The question around whether a payment certificate is considered a debt or a liquid document in South Africa arises when dealing with a construction contract that has been entered into with a government department or state-owned enterprise.

In this case, the court had to decide whether a final payment certificate constituted a debt or a liquid document when Inyatsi Construction SA Limited, acting on behalf of a joint venture, sought to recover outstanding payments from the National Department of Public Works.

The court had to decide whether a final payment certificate constituted a liquid document or a debt under the terms dictated in The Institution of Legal Proceedings against Certain Organs of State Act 40 of 2002 (the “Act”) .

The two parties had recently concluded an agreement relating to upgrades to the Nelson Mandela Museum and a final payment certificate was issued upon completion of the contract.

The department did not pay the certified amount in the final payment certificate on time, resulting in Inyatsi Construction SA Limited bringing an application for payment of the outstanding amount.

The department argued that the claim constituted a debt and therefore the application was not properly before the court because Inyatsi Construction SA Limited had not issued the required notice in terms of the Act, prior to the launch of proceedings.

According to the court, the Act defines a debt as any debt arising from any cause of action which arises from delictual, contractual or any other liability for which the state is liable for payment of damages.

The court said that if a claim is for specific performance, then it does not constitute a debt because it stems from a contract entered into between the parties and not a claim for damages arising from breach of contract and that the final payment certificate is considered as an acknowledgment of debt, therefore making it a liquid document.

The department was subsequently ordered to fulfil its contractual obligations and pay the outstanding debt together with the interest accrued.

The state entity’s obligation to perform an obligation under the contractual terms was a distinguishing factor in the decision, in contrast to situations where a state entity is rendered liable for payment of damages.

In these circumstances, only the latter is considered a debt and must be brought before a court within the confines of the Act.

The court also added that the issue of a request for proposal for tender is an administrative action, however, the negotiations, tender documents and contracts entered into after that will be regulated by the rules of contract, effectively meaning that the contract determined how the issues between the two parties were to be regulated.

This case provides clarity to the definition of a ‘debt’ under the Act and certainty when pursuing contractual claims against state entities.

The court did, however, confirm that a final payment certificate constitutes a liquid document, allowing parties recourse to recover outstanding payments by way of provisional sentence summons instead of lengthy ordinary actions.

The case shows how this distinction guides a business or individual that is trying to recover outstanding payments from a state entity.

Written by Arvitha Singh, co-written by Siyabonga Machava of Pinsent Masons.