Michael Gerard of Michael Gerard Solicitors offers his advice on a successful adjudication.
Adjudication is often used successfully to resolve construction disputes, but how can you ensure that your experience is a positive one? Of course, the simple answer is to make sure that you have a good case, but how is this actually achieved? The good news is that following these guidelines can significantly enhance your chance of success.
Pre-contract preparation
The foundation of a successful adjudication is ensuring that you do the hard work before entering into the contract. A failure to identify potential pitfalls pre-contract can prove very difficult to surmount. Areas in the contract to look at include the payment, notice and adjudication provisions. Most of the standard payment terms (i.e., as found in JCT contracts and under The Scheme for Construction Contracts (England & Wales) Regulations 1998 (as amended)), can be altered. For example, you could stretch the date between the due date and the final date for payment or reduce the number of days when a pay less notice must be served prior to payment.
Adjudication provisions can also be drafted in terms which favour the payer. For example, the contract may already have identified a limited number of adjudicators, some (or all) of which you or your party representative have genuine concerns over. The adjudicator may not have the requisite skills required or a particular ANB may be identified, which again may impact on the question to be put to the adjudicator.
Another vital pre-contract factor to look out for is whether the Housing Grants, Construction and Regeneration Act 1996 (as amended), apples to your contract. If not (and providing you want the benefit of adjudication to apply), you will need to ensure a dispute can be referred to an adjudicator. For example, there is no right to adjudicate under a contract where the employer is a residential occupier, unless there is an express adjudication provision under the contract.
Has a dispute ‘crystalised’?
You cannot refer a dispute if it has not ‘crystalised’. This means that unless there is a disagreement (this could include evidence in writing, or one side has remained silent for a period of time, or there is a breach of a contract term), there is no dispute. Thus, if referred to an adjudicator, he or she would have no jurisdiction.
Popping the question
It is absolutely crucial to express the right question, or series of questions, that the adjudicator is to decide on. Start by considering whether the question should be narrow or broad. For example, ‘Did the event cause the date for completion to be delayed and if so, by how much?’, is a narrower question than: ‘What was the cause of the date for completion to be delayed?’. Narrow versus broad is a tactical decision, and both have benefits and risks.
The question for the adjudicator is embedded in the referral notice and great care must be taken when drafting out the question, as once the dispute has been referred, there is no turning back.
Jurisdiction
Ensuring that an adjudicator has sufficient jurisdiction to decide a dispute is crucial, going hand-in-hand with the question that an adjudicator is required to decide upon. Asking an adjudicator to decide the correct value of an interim valuation where no pay less notice has been issued gives them jurisdiction to value the works – as opposed to limiting their jurisdiction on deciding what sum is due in the absence of a pay less notice.
Drafting and evidence – prepare for success
This is the tedious part of the adjudication, but how well you present your arguments will impact on the outcome. If the referral notice is well presented, with numbered paragraphs and well-constructed arguments that are well researched and supported by evidence in referenced appendices, the chance of success will be higher than rushed, poorly evidenced and possibly irrelevant submissions.
The adjudicator needs to be led by the hand through your submissions, starting with the contract background, followed by the background to the dispute, going through the issues appertaining to the dispute and then submitting evidence-based arguments. You should also present any arguments from the other side (if known), followed by your rebuttal of the same.
Cooperation and communication
Although you should not be disadvantaged by being an un-cooperative party a helpful party will demonstrate that it has nothing to hide and is eager to ensure that a correct decision is made.
In addition, even if you have referred the dispute to an adjudicator, you may still communicate with the other side in an attempt to settle the matter. However, communications should be kept professional and on a without prejudice basis. This allows the other side to be aware of your arguments, and so it could be a fortuitous time attempt a compromise before the legal costs escalate and the adjudicator starts to rack up time.
This element of communication and compromise is an important part of any professional relationship – and especially so where the parties are hoping to continue working together amicably in the future.
The advice provided is intended to be of a general guide only and should not be viewed as providing a definitive legal analysis.
Author background
Michael is a Solicitor, Chartered Builder & panel registered adjudicator, and is a director at Michael Gerard Law Limited, a solicitors practice regulated by the SRA. You can contact Michael at www.MG-law.co.uk.
