Adjudication in the bushes

It cannot be denied that the reaction OF the construction insurance market to the introduction of adjudication in May 1998, which gives a frantic seven days for referral of a case to an adjudicator, was something akin to that of vampires faced with a cross.

Many insurers even introduced tight deadlines for their policy holders to provide notification of an adjudication notice, otherwise they would risk losing cover altogether. Such a deadline can easily be overlooked if the recipient of the adjudication notice is on holiday, doesn't quite gather what he is being presented with or is just a little on the slow side.

Although my firm, Wren, would not endorse such a rigid approach, it is not so hard to comprehend the motive of those who do, when seen in the light of comments such as those of Nick Henchie of solicitor Rowe & Maw. In his adjudication tips for clients, he advises claimants to "keep the preparation of the claim secret" and serve it "when the person with the knowledge of the claim … is on holiday, or just before the Christmas/ Easter period".

Henchie also provides some useful tips for respondents. However, this recommendation to claimants is rather a bold one in the light of the fair-play, anti-litigious, cards-on-the-table ethos of Woolf, and perhaps not one to endear him to all his clients, some of whom might see themselves on the receiving end of this trap-door approach to adjudication in less fortunate times.

There can be little doubt that adjudication does put the claimant at an advantage over the respondent in terms of time to prepare the claim; a fact borne out, perhaps, by statistics showing that most adjudications are won by claimants.

50% of main contractors feel they have been “ambushed”

There is evidence that the court will not enforce if it feels that a dispute has not been discussed

A comprehensive survey of the experiences of those who have been parties to adjudication is currently being compiled by solicitor Lee Crowder in association with Building. Interestingly, interim survey results indicate that 50% of main contractors (sadly for them, the most common respondents in adjudication) feel they have been "ambushed" by adjudication at least occasionally.

However, there are signs that the tide may be turning. Encouraging statements were made in K&D Contractors vs Midas Homes (Technology and Construction Court, 21 July 2000), which concerned the question of enforcement of an adjudicator's decision relating to a dispute over unpaid invoices.

The court was not prepared to enforce the part of the adjudicator's decision that related to certain heads of claim where no proper time and opportunity had been given to the respondent to allow it to consider and discuss the issues with the claimant prior to adjudication. The court considered the earlier case of Fastrack Contractors vs Morrison Construction, where it was determined that adjudication is intended to resolve what has not been settled by the normal process of discussion and agreement, and that a dispute is not to be inferred lightly.

In Midas Homes, Judge Humphrey Lloyd left no doubt as to his views on a claimant bringing a matter to adjudication where the respondent has not had proper time and opportunity to consider its position.