With the threat construction contract disputes pose to projects, it is vital that resolution is reached with speed and expert comprehension. Otherwise, construction projects are likely to be delayed, disrupted or put on hold indefinitely. There is also the financial fallout associated with these disruptions and delays.
Effective legal counsel will ensure that a firm, swift and decisive approach is taken during the adjudication procedure. While no two cases are the same, there are stages each adjudication procedure will follow…
1. Dispute Determination
The first thing that must be addressed is “Is there a dispute?” It might seem like an obvious question but there must be a dispute for the adjudication procedure to begin. For clarity, a dispute is when one party has a disagreement with the other, usually about the contract’s terms or definitions. Effects of disputes can be stunted business growth, prohibited expansion and success delay. Early dispute resolution will ensure costs are managed and contained as far as possible.
2. Crystallisation of the Claim
Once the dispute has been determined, the claim should have crystallised – the potential claimant should have explicitly notified the potential respondent of their intention to begin the adjudication process. This way, both parties are clear in their minds what the dispute is and the remedy being sought. It is also an opportunity for the respondent to remedy the matter.
3. The Notice of Adjudication
If a remedy is not reached, the next step is for the respondent to receive a Notice of Adjudication. This will be prepared by the claimant outlining the particulars of the dispute and that it is being referred to adjudication. Notices of Adjudication cannot be amended at a later stage. Therefore much care should be taken when drafting a notice as the content will limit what remedies are entitled.
4. Appointing an Adjudicator
Appointing an adjudicator must usually be done within seven days of the service of the Notice of Adjudication. If one is not chosen within this time frame then the claimant will need to restart the adjudication process.
5. The Referral Notice
The Referral Notice is the claimant’s opportunity to make detailed submissions to support their claim to the adjudicator. It is a document that sets out the claimant’s case and should include documentation in support of the claim together with expert reports and, if any, witness statements.
6. The Response
The 1996 Housing Grants, Construction and Regeneration Act does not specifically require the respondent to respond with a defence to the referring party’s claim. However, the need for this can be agreed upon and set by the adjudicator. The response should include all the relevant evidence, highlighting the importance of accurate record/document management before, during and after any construction contract.
7. The Adjudicator’s Decision
The adjudicator must reach their decision within twenty-eight days of service of the Referral Notice. This period can be extended by a further fourteen days if the claimant agrees, or if both parties agree. The adjudicator’s decision is temporarily binding until the underlying dispute is finally determined by the court proceedings, arbitration or agreement of the parties via negotiation or mediation.
How should you prepare for adjudication?
While disputes need to be managed swiftly, you can see that there are countless stages where adjudication can be delayed. Whether by adjudication, arbitration, or litigation, members at Mercantile Barristers will adopt a timely, efficient and affordable approach to achieve the best possible results for clients within the shortest possible time.