Instant justice

The email from a quantity surveyor nearly got deleted. It came in among the morning hoard of messages headed, "Hi there", "Nice to see you", "Lonely?", "Gosh, you looked good". QSs don't say things like that, so the message almost got bounced. Apparently my QS emailer had been having a debate with his boss about arbitration and adjudication. Could I settle their quarrel? The boss said that nowadays there was hardly any difference between the two. He conceded that adjudication was faster, but said it was the same old arbitration process on speed. The QS had looked at the costs and concluded that it was much cheaper to adjudicate, but conceded that paying your own costs win or lose in adjudication was quite different to the norm in arbitration.

Well, let's have a look. My left toe went into the hot water of arbitration in 1982. My right toe went into the wine of adjudication in 1998. Both toes have turned colour. Arbitration got a real good shake-up in 1996 when the new Arbitration Act came along. That act is world-beating. The only snag is that arbitrators are like oil tankers – mostly at sea and they take an age to change direction. So forgive the die-hards. The truth is that arbitration even under the new act mimics litigation, whereas adjudication does not.

Let's track a dispute in arbitration and the same in adjudication and spot the difference. Big Boy Construction is fed up. He has had liquidated damages taken from his cheque by the employer. The employer's architect is ignoring the gnashing of teeth that interrupts the screams for extension of time – you know the familiar story. We now have the first pre-condition for both arbitration and adjudication: a dispute. And if at this stage Big Boy Construction calls for an adjudicator, he puts all the quarrels, whingeings, memos, letters, charts, loss and expense analysis already exchanged into a sack and hands it to the appointed adjudicator. There is an absolute right to adjudicate even if the contractual bumf is silent or if some loony tried to bar its use.

Arbitration isn't like that at all. First, there has to be an express agreement to arbitrate. That agreement is usually embedded in the small print somewhere. If so, the arbitrator is appointed. The pivotal dispute is identified but now comes a big difference. The arbitrator doesn't decide the dispute there and then. He manages a formal shouting match between the parties. The pivotal dispute is shouted about over many moons via formal documents, which we used to call "pleadings". In this way the embryonic disputes lurking behind the main dispute develop into sub-disputes, ultimately to be decided too, but not yet. Then the arbitrator orders the parties to reveal the secrets in their files. The opponent party is allowed what is known as "a rummage" – what we used to call "discovery". Then the arbitrator orders all the evidence to be written down, then he orders all the expert QS opinions to be written down and then he sets a date for a trial. And, when it starts on day one, it is usually adjourned because some oaf has committed a technical foul.

In a trial the arbitrator sees witnesses on oath, watches them cringe, hears fibs, and sees the odd fraud. All that is so expensive

Pause here. Do you see the difference between adjudication and arbitration? All of the rigmarole in the build-up to the arbitral trial is missed out in adjudication. The manager of the dispute in adjudication doesn't even get appointed until all the "shouting" has been done. The adjudicator looks in the sack of "shouts". Neither party can add things to the sack not previously openly quarrelled about with its opposite number. The pivotal dispute, about the extension of time doesn't change, but embryonic disputes hidden beneath the surface can't emerge as fully-fledged sub-quarrels by surprise either. So adjudication relies on the parties navigating their own way into the port where the adjudicator sits in his office examining all the arguments already exchanged.

There is then a great saving in cost. The dispute management is not concluded at all by the dispute-deciding adjudicator, whereas the dispute-deciding arbitrator manages it. Then when it comes to the trial, in adjudication there isn't one. The adjudicator has his sack of "shouts" to rummage in and that's it. Whereas the arbitrator sees witnesses on oath, watches them cringe, hears fibs, and sees the odd fraud. All that is so expensive.