Adjudication is a quick and relatively inexpensive way of resolving disputes in construction contracts, says Peter Vinden.
Section 108 of the Housing Grants, Construction and Regeneration Act 1996, as amended by the Local Democracy, Economic Development and Construction Act 2009, gives rights to parties to refer any dispute arising under a construction contract to adjudication at any time. Even if there is no adjudication procedure written into the contract, the statutory ‘Scheme’ comes in to play to ensure that issues can be dealt with swiftly. Even disputes under oral contracts can be adjudicated upon.
It is not unusual for parties to represent themselves in adjudication. There is nothing wrong with this, indeed it seems that Parliament may have intended to make it easy for contracting parties in construction to settle any issues without the need for professional representation. However, the adjudication process has evolved considerably since its inception, and is now perhaps closer to arbitration than Parliament probably anticipated.
In terms of dispute resolution, adjudication is a quick process. The appointed adjudicator has just 28 days to make a decision from the date that the referral is served, although this can be extended, with the consent of the referring party, by up to 14 days. Beyond this, the total period can be extended further by agreement of both parties.
It is essential that both referring and responding parties are prepared for the adjudication, even more so if they are representing themselves. Do not think that the adjudicator will make good a poorly presented case, as they simply won’t.
To make the process of self-representation at adjudication go more smoothly, there are a few key points to consider:
1. Make sure that your Referral Notice is concise, explains the dispute clearly and sets down the questions that you want the adjudicator to answer. Be explicitly clear, as the starting position is that an adjudicator can only answer the questions that are included in the Notice of adjudication.
2. Provide a copy of the contract and a legal argument as to why you consider you are entitled to the remedy claimed. Include only relevant evidence that you wish the adjudicator to consider, paginated and referenced back to each head of claim.
3. Prepare your Referral Notice well in advance of issuing your Notice of Adjudication. In most cases you only have seven days (from the service of your Notice of Adjudication) to secure the appointment of an adjudicator and serve your Referral Notice. It is not until you have finished drafting the Referral Notice that you will know for sure what questions you want the adjudicator to address.
4. Ensure that your opposing party is aware of your claim and that this has either been ignored or rejected by the other side. Otherwise, your adjudication is likely to fall at the very first hurdle.
5. Check the contract and follow carefully the procedure laid down for applying for the appointment of an adjudicator, including applying to the correct nominating body, if one is specified. If the contract says that the Notice of Adjudication is to be written in pink ink on yellow paper and served at the responding party’s head office in Kathmandu, so be it.
6. Make sure you have no holidays or other commitments in the adjudication period. Weekends and holidays (other than bank holidays) count as part of the 28 days in which the adjudicator has to reach their decision. You never know when you may need to respond to a submission from the opposing party or answer a question from the adjudicator so you must be available. Sunning yourself in Benidorm during the process may make you feel better, but it is not going do anything for your chances of success!
Though it is not required that either party must seek professional advice, it is most prudent for the referring party to take advice, at the very least, on the content of the Notice of Adjudication. This is both the point where the adjudication process starts and where things can quickly to go wrong. A little bit of advice at the outset can make the difference between success and failure.
Peter Vinden FCIOB is a practising adjudicator, arbitrator, mediator, expert and corporate re-structuring adviser to the construction industry. www.vinden.co.uk or call 0845 504 9733.
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