The case related to two adjudications arising from the same subcontract. In the first, the adjudicator was asked to decide in favour of the referring party's submission, that it was entitled to £110 587. The adjudicator decided that it was not so entitled as the power to decide matters of alternative valuation lay elsewhere.
In the second adjudication, the referring party's notice was worded significantly differently. The nub was that the applicant claimed the balance of the sum due, calculated as £93 309, or alternatively, such other sum as the adjudicator shall decide to be fair and reasonable in the circumstances of the claim. The adjudicator pronounced that the amount to which the referring party was entitled was £72 939.
The difference between the two referral notices was that the first included a closed question – was the referring party entitled to a certain amount of money, yes or no? The second was a question framed in the alternative – if the adjudicator decided the referring party was not entitled to the specific amount applied for, what amount did he consider it was entitled to? In other words, the adjudicator was requested and required to investigate the amount and make a valuation.
The moral of the story is simple – tell the adjudicator what you want them to do. They should do precisely what is requested – no more, no less.
In another recent referral notice, the adjudicator was asked to decide in favour of the referring party and to make a decision on entitlement to a specific amount of money or, alternatively, another sum. The adjudicator found in favour of the referring party on all matters of liability. That was the good news. The bad news was that the adjudicator decided there was insufficient information to make a decision on the quantum of such liability.
This left the referring party in a quandary and understandably confused by the adjudication process. It had won all the points on liability but now had to face trying to negotiate with the non-referring party directly to recover the money or commence a further adjudication. A request to reconsider, in the light of what had been asked for in clear and unequivocal terms, was refused, the adjudicator claiming that no more could be done as its role was by then functus officio.
This example of system failure should be of major concern to the industry. The industry wanted, and Parliament provided, a system of short, sharp, rough justice as a way to resolve disputes speedily and maintain cash flow.
Adjudicators must acknowledge that they are appointed to make a decision which will enable two disputing parties to resolve their differences
The success of the adjudication process will only be as good as the quality of those who purport to call themselves adjudicators. Enquiries indicate that this example of an adjudicator failing to do what is requested, and failing to take the initiative for the benefit of the disputing parties, is more widespread than is perhaps apparent.
The Housing, Grants, Construction and Regeneration 1996 Act (and, if the contract does not comply with the Act, the Scheme for Construction Contracts Regulations) refers to the adjudicator taking the initiative to ascertain facts and the law. The scheme goes one stage further and provides that the adjudicator may "meet and question any of the parties to the contract and their representatives".
Many adjudicators hold meetings to give them a better understanding of the written documentation. Others adopt a rather more dangerous style of convening hearings at which evidence is purported to be on oath. It is these adjudicators who are likely to do most disservice to the industry.
Adjudication has been referred to as a legal process. It is not and was never intended to be. It is a judicial process.
Adjudication requires the decision of a person acting as an expert, not as an arbitrator. Does the concrete comply with the specification or not? Is the subcontractor to be paid £x or another sum? Problems arise when adjudicators, buoyed with self-importance, adopt a mantle of arrogance and pomposity which was never intended for their role.
There is little doubt that arbitration has been usurped by adjudication. That may be no bad thing given the quality of some arbitrators and the costs and time involved in a process which for too long has tended to be a mirror image of court litigation. Some adjudicators, trained as arbitrators, seem to believe that adjudication provides an alternative platform from which to practice their training, and are a danger to themselves and the industry.
Source
Electrical and Mechanical Contractor
Postscript
Richard Hawkins FRICS FCIArb is with construction contract consultants James R Knowles.