In fact, adjudication is now being used, and abused (often at the behest of claims consultants), by an ever-increasing army of subcontractors. All sorts of claims, of varying magnitudes and complexity, are being determined by adjudicators simply not qualified or competent to deal with them. Further, everyone who knows anything about adjudication, knows that the process is potentially so flawed, and the quality of adjudicators often so poor, that even the most badly prepared and unmeritorious claim stands a good chance of success. It is hardly surprising therefore that main contractors and employers have turned to contract draftsmen to seek to protect them from the threat of adjudication.
Of course, there is nothing a party can do in the contract to prevent the other from referring a dispute to adjudication if the act applies. But there is plenty that can be done to deter a party from starting adjudication and to make the process fairer to the responding party, although there is uncertainty as to the legality and enforceability of some of the clauses used.
The clause that most effectively deters a would-be claimant from turning to adjudication makes the party initiating the process responsible for its entire costs. Such a clause is not popular, but it works effectively to change the prevailing attitude of most claimants in adjudication that "there's nothing to lose by having a go". Such a clause means there may well be.
The ICE contract says that a dispute cannot be referred to adjudication without a matter of dissatisfaction first being referred to the engineer, who has a month to make a decision. In practice, this has worked well, providing responding parties with advance notice of possible adjudications.
Another clause that is sometimes written into a contract says that the referring party shall not be entitled to rely on any evidence in the adjudication that has not been previously submitted to the responding party, before the adjudication. This reduces the risk of ambush.
It is always useful to provide in the contract that the responding party has a minimum of 14 days to respond to the referral notice. Too many adjudicators award only a seven-day period for the responding party to reply, which is rarely enough time.
Increasingly popular is a clause that provides that any money awarded by the adjudicator should be paid into a stakeholder account, pending the final resolution of the dispute by arbitration or litigation, thereby depriving the referring party of the real benefit of adjudication.
Always name a good adjudicator in the contract, rather than rely on an appointment by a nominating body. There are precious few good ones around, so it pays to have any disputes that arise determined by a competent adjudicator.
Given that so many adjudicators appear to make decisions on the basis of their "gut feeling", rather than on the basis of strict rules of evidence, it is sensible to provide expressly that the adjudicator must apply strict rules of evidence and give detailed reasons, including explaining what evidence they have relied on in making their decision. There is an added advantage in seeking reasons from the adjudicator, since such reasons may not stand up to judicial scrutiny (if the adjudicator has exceeded his or her jurisdiction by answering the wrong question, for example).
Finally, a neat trick is to refer to a set of bespoke adjudication rules in the contract but not give them to the other party at contract formation stage. It is always a give-away when the other party phones up asking for a copy of the rules six months later.
Nick Henchie is a solicitor in the construction department of Mayer, Brown, Rowe & Maw, and can be contacted via email at firstname.lastname@example.org.