Despite the increasing popularity of adjudication, it still has some problems. Indeed, in some ways it is little better than a trip to the bookies
Adjudication has been with us for just over three years and it is generally agreed that its use is increasing. Research carried out by one of my colleagues last year shows that it is being used to help resolve disputes concerning the following:

  • valuation of variations (26%)
  • prolongation/disruption (24%)
  • time/delays (19%)
  • measurement (15%)
  • defects (9%)
  • design/technical issues (7%).

It is clear from the research that those involved are generally happy with their experience. When asked whether adjudication was effective, 67% classed it as excellent or good, with another 25% saying it was satisfactory. Its success is probably related to the fact that adjudication is considered to be much less expensive than the pre-adjudication alternatives, and the agreement of the final account is made easier. The research data shows that adjudication is thought to be most successful for valuation and payment issues, probably where the amounts concerned are smallish.

So adjudication appears to be delivering against its aims and all is rosy? Well, hold on a minute; there are areas of criticism. The most frequent one is the tight timescale involved, particularly for the responding party. Although there are ways of setting up dispute escalation processes within contracts that can give warnings about disputes coming along, these are of no help to contractors and subcontractors that are unable to influence the adoption of these systems. And as there is no way around the statutory timescales set down by the Construction Act, it is prudent in certain cases to carry out preparatory work in case a reference to adjudication lands on the doormat unexpectedly.

The second most common complaint is the quality of the adjudicator. Selection is most commonly made through a nominating body, such as the RICS or the Chartered Institute of Arbitrators. They control the quality of the adjudicators, their training and the selection process to ensure that the right person is chosen for the dispute. There is no evidence to suggest that this process is not being carried out correctly. Indeed, the sceptic in me says that 50% of parties to adjudication ought to feel that the adjudicator was of poor quality because the adjudicator failed to deliver the result they were looking for. The percentage who complain is much less than this.

You place your money, await the result, then either collect your winnings or walk away with nothing

Whatever the successes and failures of adjudication, before anyone chooses to use it, they must recognise that in some ways it is not much better than going to William Hill. You place your money, wait for the result to be announced and then either go to collect your winnings (which may not be as much as you thought they were going to be) or walk away having lost everything. I simplify, of course, but the point is that the parties have no control over the process after it has been referred to the adjudicator. And I mean no control, because, certainly, most of the smaller money-related adjudications are based on documents only. The papers are submitted to the adjudicator, they tell a convincing tale (or they do not) and that is the last chance the parties get to influence the result.

In this respect, adjudication is different to arbitration or litigation, in which the parties at least have an advocate working on their half to present their case.

The process is at odds with the way people usually want to run their lives. Most want to be able to influence issues and control and manage situations. For those who do not fancy the adjudication trip to the bookies, there are other dispute resolution methods that might be more suitable. For instance, I am sensing – and the jury is still out on this – that more people are choosing to adopt some form of mediation or conciliation.