Construction Disputes - to Mediate or Adjudicate?
Some time ago I was invited by the Association of Northern Mediators (“ANM”) to participate in a debate hosted by my colleagues at Eversheds Sutherland’s Manchester office.
During the debate, I found myself advocating for adjudication, whilst my friend and colleague, Mark Mattison, spoke about the features and benefits of mediation.
Which process did the audience decide was best? Carry on reading to find out.
Adjudication; Where it started
I issued my first adjudicator’s decision in 1999 which coincidentally is the year I trained as a mediator with CEDR.
Without thinking too long about the quality of the decision, I am confident it was the right decision at the time.
However, admittedly, the form and content of it, with the benefit of hindsight could have been better. But in those days the first pioneering adjudicators were feeling their way and getting to grips with this new concept of dispute resolution so I have forgiven myself, even if the parties involved have yet to!
Can you remember what resolving construction disputes was like prior to 1 May 1998, the effective birthday of adjudication?
The introduction of statutory adjudication was the equivalent of the industry being hit by a tidal wave, at least in how, as an industry, we went approached resolving construction disputes.
Adjudication was designed with the aim of providing a dispute-riddled construction industry with a low cost, simple process for all parties, regardless of size, to access and obtain swift justice that had previously been denied to them.
Whether the government of that time really envisaged that adjudication would evolve to such an extent that it is now routinely the tribunal of choice to resolve large-value, complex disputes, I couldn't say. But I suspect not.
There is no doubt that the concept of adjudication has been embraced by the construction industry and, more importantly, supported by the courts.
We know that adjudicator’s decisions are routinely enforced by the courts. There are exceptions to this, such as;
But for Parties who have a dispute and are faced with an opponent who ignores them, won’t take the issue seriously or is just being unreasonable, our legal system provides access to justice through statutory adjudication.
It is very easy to suggest that the cost of adjudication has become an issue, but in my mind, I am convinced this is not due to representatives referring ever increasingly large and complex disputes to adjudication rather than adjudicators failing to control the process.
If I ruled the world, every day would be the first day of spring (that’s a line from a Harry Secombe song – I must be getting old) and I would like to see all disputes mediated.
I am convinced that mediation preserves relationships, keeps the parties in control, allows them to decide on the terms of settlement and saves a massive amount of legal costs in the process.
All UK construction contracts must provide for adjudication and many elect for arbitration as the final means of dispute resolution and there is no one directing parties to mediate in these processes. The situation is different in litigation with courts increasingly directing parties to mediate.
For my part as an adjudicator, I routinely direct parties to meet, prepare Scott Schedules and make strenuous efforts to agree what they can in order to reduce the number of issues in dispute. It is sometimes quite surprising what this approach can yield. At meetings I will routinely encourage parties to agree matters wherever possible. Is this approach wrong? I don’t think so.
There is no doubt in my mind that mediation has a massive part to play in the resolution of construction disputes. We just have to find a way to educate and encourage our industry to adopt a collaborative approach, not just to building process itself but also in the resolution of disputes, whenever they arise.
So, who won the debate? I think it fair to say that the audience was evenly split, but everyone agreed that whilst adjudication inevitably damages relationships, mediation, more often than not, does the opposite.
What do you think?
About me
I am a practising arbitrator, adjudicator and mediator. I am a director of Vinden Consulting and a non exec director of Decipher, a DeSimone company.
You can reach me by email at [email protected] or [email protected]
Advisor, Non Executive, Private Investor: construction and engineering industry, professional practices, contracting organisations, investors and lenders.
4 个月I have been looking back at my 41 years in construction and disputes and believe that one of the best things we can do is to educate. Not necessarily academic education - but on the job career development. In the first 15 or so years of my career (1983 - 1998) with construction companies we did not have one formal dispute, did not appoint any claims consultants and did not use any lawyers on contentious matters. This was because we had robust processes, policies and procedures that were applied with rigour, challenged and audited with rigour and the results accepted as the best estimate of the status of a project / division / company whether they were good or bad. Then from a solid, accurate base decisions could be taken. My recollection is that the people in these environments enjoyed work, learnt, developed and enhanced their skills. I talk to young QS's now and see a distinct difference in those that work for organisations who have this rigour (they are developing their skills, enjoy their careers, enjoy working with their employer) and those that work for organisations that don't (they are getting less development, have less skills and are not enjoying their roles). My next venture could be to polish off our old processes...
Chief Executive Officer Decipher Consulting UK Ltd and Managing Principal DeSimone Consulting Engineering
4 个月Great article Peter. I don’t understand why those that are in a dispute, don’t adopt mediation earlier, in an attempt to try and close the gap. In my view, Adjudication 2024 is somewhat different to what was intended in 1998.
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4 个月I made the same points in an extensive paper I wrote earlier in the year on the encroachment of principles of natural justice on adjudication. As I said in there, what the lawyers describe as a "fair" process, is actually an adversarial process which destroys parties' relationships. I wrote to the then shadow business department on this, and they replied saying that my report had been passed to the then shadow business policy team, but obviously a lot's happened since then. I do hope that they look at the issue, as as Peter says, what the judges and lawyers have made out of adjudication is not what was intended and is not what is needed by the construction industry.
Owner, Bunton Consulting
4 个月Interesting Peter but construction companies if they need to survive need early intervention into issues to resolve these and to avoid disputes. Why is there not a greater recognition of this. There is a role for mediators and experienced people to assist parties to resolve and move on and get projects built. Building is how our industry survives.