The statutory timetable for appointment of an adjudicator, reply to a referral and an award is proving tight for the majority of adjudications. Severe injustice commonly results. Consider the example of a defending party faced with a referral consisting of 20 lever-arch files of documentation and three expert reports on the Friday before Christmas!
Collaborating parties
It is also not unknown for a series of adjudication referrals to be planned by various collaborating parties and made against a single party in close succession or in relation to every interim certificate. Such statutory ambush often precludes a party from putting his case or testing the case to be answered and gives little room for consideration by the adjudicator.
Currently, extension of the adjudication timetable relies on party co-operation, which is unlikely to occur. Perhaps the adjudicator should be given statutory power to extend the time for a reply and award and, within specified parameters, to limit the volume of referral documentation.
Search for a star
Reservations are often expressed over the quality of adjudicators and their decisions. Whereas there may be merit in selecting an adjudicator from personnel familiar with a project, this can lead to conflicts of interest. Where there is or has been a relationship between the adjudicator and a party to a dispute, questions of bias may arise. Injudicious behaviour on the part of a "novice" adjudicator, such as attending site with one party and not the other, can reinforce these concerns.
Reports also abound of the majority of awards being determined on the basis of a 50/50 "split" while "difficult" aspects are ignored. The requirement on the adjudicator to act impartially is not, it would seem, sufficient to encourage confidence, and there is much scope for legal challenge. While the courts wrestle with whether, and to what extent, rules of natural justice and human rights legislation apply, perhaps statutory regulation of adjudicators and nominating bodies should be revisited.
Another much debated issue is adjudicators' mistakes. In the case of Bouygues UK Ltd v Dahl Jensen UK Ltd, the adjudicator included sums in his award that effectively resulted in an early release of retention monies to a party. The adjudicator did not accept that he had made an error.
Adjudication – not yet heralding peace on earth!
Contrast the case of Edmund Nuttall v Sevenoaks District Council, where the adjudicator admitted that he had erred in his award but indicated that he did not believe he had jurisdiction to adjust it.
The courts have made it clear that although they may be able to deal with jurisdictional errors, they will not intervene to correct mistakes of fact and law.
Party poopers
The consequences of such "party poopers" may be severe where the party receiving cash following enforcement becomes insolvent before steps can be taken to secure correction and repayment. Insolvency risk can also increase where the contract under which adjudication occurs contains an arbitration clause that is operable only after practical completion of the works. There would appear to be scope here for intervention.
Foreign troubles
Increasingly, foreign domiciled companies are carrying out construction contracts in England and Wales. Such contracts may contain a foreign law and jurisdiction clause. Although this is permissible by Section 104 (7) of the act, difficulties with enforcement of an adjudication award in foreign jurisdictions have not been adequately considered. Further statutory guidance here would be welcome.
Domestic difficulties
Construction works undertaken by domestic property owners fall outside the act by statutory exception. Interestingly, the form of contract recently launched by the Joint Contracts Tribunal for such domestic works contains an adjudication clause. The implications of accepting the adjudication process are unlikely to be clear to the average householder, and it is open to abuse by the "cowboy" builder. Statutory protection would be advisable to outlaw the use of adjudication clauses in domestic contracts.
Counting the cost
Costs of an adjudication are irrecoverable unless the parties impliedly or expressly authorise the adjudicator to deal with them. Many adjudicators are ill-equipped to assess costs of an adjudication and the paying party rarely has any opportunity to challenge costs claimed by the successful party. Safeguards available in litigation do not apply. A statutory power for the adjudicator to deal with costs using a simplified version of the litigation rules could be a way forward.
Source
Construction Manager
