Adjudication has become just like litigation-lite, thanks largely to disputes lawyers gunning for a fight. A less contentious approach might return us to its original aims
Like most construction lawyers of my generation, I started off as a litigator. And I have always thought (well, I would, wouldn’t I?) that construction lawyers should have some experience of contentious and non-contentious work.
The advantages of having contentious experience for lawyers who work on “deals” is the rigour and discipline that litigation encourages. Once you’ve seen your drafting subject to the forensic analysis of a QC you look at compromises and fudges in a new light, and you undoubtedly check your work more carefully. Missing “nots” or – to exhume one of my old skeletons – the difference between “planning applications” and “planning appeals” in the clause in an architect’s appointment that relates to additional fees does tend to make a difference …
And the advantage of some non-contentious experience for a litigator is also significant. It broadens their experience of forms of procurement and the practices of the industry. Otherwise, too often, they can be involved in narrow points for a long period of time, with the result that they can’t see the wood for the trees. It also makes them less inclined to patronise and criticise a non-contentious lawyer as they see how drafting develops through negotiation, with three or four hands amending a clause that is finally settled in the early hours of the morning – and is therefore unlikely to be perfect.
There is a further significant difference in approach between the non-contentious and the contentious lawyer. The non-contentious breed is driven by the desire to seek a sensible compromise so that the agreement can be signed and the deal done. Yes, they want to achieve the best possible outcome for their client but that client will not thank them for scuppering the deal altogether. It is in the blood of a non-contentious lawyer to negotiate. But equally it is in the blood of a disputes lawyer to resist, object and argue the narrowest and most subtle points.
It is at this point worth remembering the comments made by Sir Michael Latham in 1994 which gave rise to the statutory adjudication regime. He quoted from an American publication: “During the past 50 years much of the US construction environment has been degraded from one of positive relationship between all members of the project team to a contest consumed in fault finding and defensiveness that results in litigation. The industry has become extremely adversarial and we are paying the price …”
It is in the blood of a non-contentious lawyer to negotiate. But instinctively it is in the blood of a disputes lawyer to resist, object and argue the narrowest and most subtle points
Latham went on to recommend adjudication as a disputes procedure that could resolve rows quickly and inexpensively. He urged main contractors and subcontractors to operate this system in a spirit of teamwork. Of course, the essence of a spirit of teamwork is the desire to negotiate to arrive at a solution. But what has happened to adjudication? It has now adopted all of the hallmarks of a “mini-litigation”. Most adjudications start with rather pointless jurisdictional and procedural wrangling.
They continue with lengthy position papers that are pleadings in disguise. Parties then produce reports from independent programmers or cost advisers and even witness statements. Finally, as we have seen, despite the exemplary lead taken by the Technology and Construction Court, there is endless argument about enforcement.
So much for the spirit of teamwork. Since we seem to have got beyond the idea of banning all lawyers from adjudication, as some of us have advocated, would a more non-contentious approach bring the process closer back to its original aims?
And the same issues arise in mediations and the settlement of major litigation. The non-contentious instinct is to negotiate at the outset, tantalise the other parties with an enticing offer and hope to arrive at a negotiated solution before absurd amounts of legal costs are accumulated. The litigator sees a high offer at the outset as a sign of weakness, misunderstands the approach and a settlement drifts away.
Could we actually achieve a step change in the industry if we better educated our lawyers?
Ann Minogue is a construction partner in solicitor Ashurst