Answers will be difficult to come by until the courts have had an opportunity to resolve some of the problems. Anecdotal evidence suggests that many in the industry are waiting to learn from the experience of others before they decide to refer disputes to adjudication. In this environment, risk management becomes something of a guessing game.
Taking disputes through to their conclusion is like embarking on a journey from A to B. A is the start of the dispute resolution process and B represents (hopefully) the satisfactory resolution of that dispute. The map indicates that there is a choice of routes.
The litigation route is well known to many. It is not an easy or a quick way to get to point B. There could be delays setting off because of the need to prepare the vehicle. Petrol consumption and wear and tear on the vehicle may be high. In fact, there is a distinct possibility that, on arriving at its destination, the vehicle has lost most of its value. Although the journey could be described as scenic, lots of other people have taken it and, as a consequence, there is likely to be congestion caused by the volume of traffic.
The arbitration route is another option. At one time it was a very good route as it was relatively short and involved less wear and tear. Unfortunately, it has also become a winding and scenic route, takes just as much time as litigation and uses just as much fuel – if not more.
The Arbitration Act, however, has tried to remove unnecessary congestion by putting short cuts in place to speed up the journey.
The adjudication route is not new; it existed in many forms of contract. However, the Construction Act has upgraded it from B-road to motorway overnight. It is almost as if a bypass has been created to get people off other roads on to this route.
But they have not upgraded the road surface; new speed limits have been applied, there are no waiting restrictions, and consequently we do not know how much petrol will be required. On top of all this, the route is not fully detailed on the map.
The adjudication route is not new, but it has been upgraded from B-road to motorway. Unfortunately, the road surface has stayed the same and there are new speed limits
Not surprisingly, many are asking questions in advance of the journey. Is my vehicle suitable for this type of road? Am I competent enough to tackle this route myself or should I hire a guide? It would be preferable to answer these and other questions before choosing this route.
Risk managers will need to decide how much fuel will be used, how long it will take to get there and the chances of arriving at a satisfactory resolution of the dispute. Also, it would be useful to have hints on the best way to drive and the things to be taken on the journey.
Hopefully, from this analogy you will conclude that we will need to gather together our experiences of adjudication in a systematic fashion. As luck would have it, an academic-based, but industry-led, research initiative has been launched at the University of Wolverhampton to monitor the performance of adjudication. Through this work the university aims to develop guidance for the industry in the use of statutory adjudication. Such guidance will be based on empirical research and, consequently, will have the advantage of being a practical toolkit.
An adjudication monitoring pack is in the final stages of development and will be available for use by the industry in March. From the data that will be gathered from those using adjudication, the university expects to be able to identify those features that will make for a successful outcome to the adjudication. In general terms, a successful outcome is one that has been achieved rapidly, with minimum financial outlay, and arrives at a decision that is respected by both parties. This offers some hope to those in the industry who have to manage disputes and therefore need to decide how best to conduct them.
If anyone wants to obtain further details about this research, or if they would like to receive a monitoring pack, they can contact the researcher, Rebecca Yeoman, at the Built Environment Research Unit at the University of Wolverhampton on 01902-322286. More information will also be available on a web site that will be up and running from the middle of January at www.wlv.ac.uk/research/beru/areas/adj.html. Adjudicator nominating bodies may also be interested in obtaining monitoring packs.
Hopefully, this research will help in smoothing out the adjudication process, and thereby ensure the success of the statutory provisions. It will also help in identifying refinements to the statutory procedure which, in turn, will help the government when it reviews the Construction Act next year.
Postscript
Rudi Klein is a barrister and chief executive of the Specialist Engineering Contractors Group.
