Adjudication, Simple steps to getting it right:

GENERALLY 

Commercially start off as you mean to go on, follow the conditions stipulated in the contract. Ensure you understand the payment terms, keep records, records, records, this will not only help when a dispute occurs but should you happen to be the Respondent, the development of the Response to the Referral will be significantly easier with contemporaneous accounts of the facts. 

Note that the Civil Court language of Statement of Defence etc. has not been used. These are for the Civil Courts and although one can use this language it is better to keep it simple, some Adjudicators do not like pretentious parties. That said we have seen solicitors treat the process as a mini civil trial insisting on presenting numerous submissions and witnesses to the Adjudicator where statements of truth would suffice, thus raising the costs above what would be reasonably expected. 

If you are going to adjudicate then it maybe more advantageous to get an expert in this field. A Degree in Engineering or Quantity Surveying and Post Graduate Certificate or a Master’s Degree in Construction Law and Dispute Resolution should ensure that you have obtained the services of someone who has taken the time to develop an in depth knowledge in this specialised area of law. 

As for costs, this is dependent on the complexity of the dispute and the availability of evidence, sometimes it can take months on large and complex disputes to get access to the available data, not long ago we spent weeks travelling around to different offices to collect IT records, liaising with 3rd parties to gain access to individuals email backed up on servers in America. 

For a small subcontractor the costs of referring a dispute should be minimal at around ￡4k to ￡7K with the Adjudicator hopefully attributing his costs to the losing party. Since Jan 2015 we have represented the Referring Party in 6 adjudications and in 5 of the adjudications the Adjudicator’s costs did not exceed ￡4000, and in the 30+ completed over the last few years it is noticeable that the Adjudicator does take into the amount claimed and will adjust his process to minimise his costs. But a word of caution in PC Harrington Contractors Limited (“PCH”) and its subcontractor, Tyroddy Construction limited the Adjudicator’s fees were ￡18,144. Two further adjudications in relation to other projects followed in materially the same way increased further Adjudicator’s fees claimed to over ￡17,000. 

The following are in our experience key steps to ensuring that you are put in the best position to win, remember that 68% of adjudications are won by the Referring Party. 

1. Is there a dispute and if so understand the dispute? Can a negotiated settlement be made saving time and money? Don’t stop speaking, continue to try and find a way out and examine your case, parties can sometimes be blinded believing themselves to be correct and no matter how many times you tell them they are on a sticky wicket they insist that, you either do not understand the case or that the Law is wrong and they will correct it. This seems to be a favourite in Repudiatory Breach for some reason where the employer believes he has the right to just kick the subcontractor off site without following the terms and conditions of the contract.
2. What does the contract say, is there a specific process to adjudicate? Some contracts state the appointment process to nominate the Adjudicator and this must be followed. Where contracts are silent the Scheme for Construction Contracts applies. When there are multiple contracts care must be taken to ensure that you follow the correct process, failure to do so may result in a challenge to the Adjudicator’s jurisdiction, as in Ecovision Systems Ltd v Vinci Construction UK Ltd the Court deciding that the Adjudicator did not have jurisdiction.
3.  Get the correct Adjudicator, in Lanes Group v Galliford Try, the Court of Appeal held that there was nothing in the Construction Act to prevent a party from shopping for the “right” Adjudicator. Tactical adjudication is a way of life, the employer who inserts the nominating bodies is doing exactly the same, they are restricting the Referring Parties ability to choose.
4. If you get the choice to select the Adjudicator think about the dispute, does it turn on a point of Law, if so go for a TecBar Adjudicator, or for a matter of quantum, the RISC would be one of my choices, the Engineering bodies also have specialist Adjudicators. In reality we all have our favourites and know from experience who is fair and who if the truth is told is a little eccentric to say the least and to stay away from.
5. Follow the nomination process, remember that dependent on the nominating body will depend on the rules of the adjudication if they are not stated in the contract. Good practice dictates that you should submit the Notice of Adjudication to the other party before requesting the appointment of an adjudicator, this is the rule in the scheme. Vision Homes v Lancsville Construction.
6. Once the notice has been submitted then time is limited, dependent on the procedure you could have a minimum of 7 days to submit the Referral, the best strategy is to have the Referral developed and ready to submit at the same time as the notice.

For free advice on Adjudication or any contractual problems you may have please call Colin free on 07539 036 470 or alternatively to speak to a member of our team during office hours call 0044 8452 60 61 05.