Adjudication: Having the last word

Lawyers are accused of turning adjudication into mini-litigation, making it far more complicated and expensive than was intended. Nonsense. At least the first part is nonsense. The bit about being complicated and expensive is fair enough.

But if litigation in the Technology and Construction Court degenerated into the chaos of a typical adjudication, there would be some very upset judges.
In court proceedings the parties draw up and exchange lengthy written submissions called “pleadings”. Those pleadings set out a concise statement of the facts on which the parties rely - what is admitted, what is denied and what the other party is required to prove.

Typically the claimant in litigation will serve particulars of claim. The defendant will serve a defence and then the claimant serves a reply. That is normally the end of it. There is the possibility of what is called a rejoinder and then a surrejoinder, but they are relatively unusual and you have to ask the judge for permission if you want to go that far.

In adjudication both parties insist on having the last word. The process starts with the referral in which the claimant sets out its case. The respondent then has seven days (or 14 if it is lucky) to serve a response. Having read the response, the claimant wants to send off a reply. This should be limited to a simple explanation of why the response is wrong, but in preparing it the claimant realises that it did not include all the material that it wanted to rely on when it prepared the referral, so it takes this opportunity to include some more back up details and evidence. By the time it is served we are likely to be past day 18 of the 28 day adjudication procedure and may even be up to day 22.

Day 26: the respondent strongly objects and demands another submission. the polite party asks the adjudicator for permission, but, if refused, puts it in anyway

The respondent is very upset that new material has appeared in the reply, and so serves a further submission. We are now on day 24. The claimant isn’t going to let that go unanswered, and so sends in another. Day 26: the respondent strongly objects and demands the right to put in another submission. The polite party asks the adjudicator for permission, but, if refused, puts it in anyway.

By now the adjudicator has about 12 hours left. The claimant can be asked to agree an extension of time for the decision but that might be refused, particularly if it is needed for the respondent’s benefit. Should the adjudicator just ignore these late submissions? That could be dangerous. The Scheme for Construction Contracts, which sets out the rules for most adjudications, requires the adjudicator to “consider any relevant information submitted to him”.

When a party is trying to avoid enforcement of a decision that it doesn’t like, saying that the adjudicator didn’t take any notice of a submission is not a bad place to start.

Should the parties care about the adjudicator’s problems? They should for two reasons. First, the confusion of late submissions is expensive as each side
spends many hours preparing them. Second, it is possible that the adjudicator may miss an important point as the 28 day deadline gallops nearer.

What can the parties do about it? They can start by remembering that an adjudication submission is not a court pleading. The referral is not the same as the particulars of claim in a court action. The referral should be a statement of what the dispute is about, not just the claimant’s claim. It should explain what the other side’s case is understood to be. Apart from being efficient in bringing the adjudicator up to speed early on, it gives the claimant the chance to tell them why the respondent is wrong. The respondent may of course think up another argument, but that will raise doubts about credibility.

The adjudicator may not be able to prevent the service of all these submissions, but there is at least one way of dealing with them. The decision does not have to take 28 days. The adjudicator will probably know who has won when the reply is served. If the respondent is on top, get the decision out before it fires off another salvo. If the claimant is the winner, wait for the respondent’s next attempt, and then issue the decision before the claimant has the chance to try again. Always refer to the last document from the losing party.

That way the winner is happy and the loser can’t say that it didn’t have a chance to say its piece.

John Redmond is a consultant at Osborne Clarke