In one overseas case (with adjudication under the Professional Services Contract), there was a dispute as to who should undertake topographical and geotechnical survey work. The consultant referred these matters (with others) to adjudication. The client’s answer was submitted within the time allowed, but was weak. After asking for extra time, because of the complexity of the case, the adjudicator decided these two matters for the consultant. The client indicated that it would not accept the decisions but did not in fact refer them to arbitration.
The adjudicator in the meantime had decided not to make decisions on the other claims until the parties had tried to resolve them by direct discussion. The consultant referred the balance of the claims to arbitration because of the imminent expiry of the time for doing so under its contract. This led rapidly to negotiations with the client and the settlement of all claims.
The consultant’s position in the negotiations was substantially improved by winning the adjudications. There was also the considerable advantage that the whole process took about seven months, whereas a full arbitration could have taken nearly two years.
There have also been several cases where contractors have been withholding payment. In one, the contractor had not paid the consultant under four separate contracts, causing severe cash flow problems. The consultant started adjudication proceedings under all the contracts for failure to observe the requirements for withholding payment under the Construction Act. The consultant won all four claims and the contractor paid. On more than one occasion, the mere threat of a referral to adjudication was enough to produce a substantial payment from the contractor.
Consultants have also been involved on the periphery of adjudications between employers and contractors. They cannot afford to ignore these proceedings as they could be affected by the result, and their input can be valuable.
- Claimants tend to win
- Preparation may take up to four months but it is essential
- Claim documentation should be kept as short and simple as possible
In one of our cases, the dispute between the employer and the contractor concerned soil conditions. The contractor’s consultant had designed the foundation on the basis of soil information supplied by the employer in its tender documentation. However, when the contractor started to construct the foundation, it found that more expensive foundations were needed because of the soil conditions.
The contractor brought an unforeseen ground conditions claim against the employer but this was rejected, one of the grounds being that the consultant’s original design was inadequate. The contractor decided to refer the dispute to adjudication but, before doing so, spent several months with its lawyers in the preparation of the claim document with substantial assistance from the consultant (and, unbeknown to the contractor, the consultant’s lawyers). The document submitted to the adjudicator was relatively short. The statement of case and all the necessary information and documents (apart from the contract) were contained in one file.
Again, the employer found it difficult to deal with the claim in the time allowed, but submitted a relatively detailed answer. The adjudicator asked the consultant about the design of the foundations and asked the contractor about its approach to the job, then decided in the contractor’s favour.
The claim documents produced in the overseas case referred to were also the product of much careful work. The issues were broken down for simplicity and to keep the claims themselves within a relatively narrow ambit. The question of responsibility for the topographical work was set out separately from that for the geotechnical work. The financial consequences of both were in a further claim. Thus, in effect, the adjudicator was being invited to make a declaration as to the respective responsibilities. In both cases, this resulted in a relatively short statement of case with supporting documents, which greatly assisted the adjudicator.
Rachel Barnes is a partner at solicitor Beale and Company.