Industry TalkRegular Industry Development Updates, Opinions and Talking Points relating to Manufacturing, the Supply Chain and Logistics.
Are you ready for adjudication
Organisations in the construction sector are being warned to expect a rise in the number of adjudications around contracts as government support comes to an end and cash becomes scarce for many businesses.
Ian Timlin, a dispute resolution specialist at Conexus Law, is urging companies that might have a claim in a construction contract or might be on the receiving end of one to consider whether adjudication might apply to it. If so, they need to be prepared and either understand how they intend to initiate their own claim or ensure that they are not ambushed by an adjudication claim against them. “Given the tight timescales, a referring party often takes a responding party by surprise,” he concludes.
Ian explains: “Adjudication is the very quick (often 28 day) private and cost-effective procedure of resolving disputes in construction contracts. You cannot contract out of it and it applies to a construction contract which is an agreement with a person for any of the following:
- The carrying out of “construction operations”.
- Arranging for construction operations to be carried out, whether under a sub-contract or otherwise.
- Providing labour (either his own labour or others’ labour) for the carrying out of construction operations.
It also includes contracts with construction professionals.
“Traditionally used by contractors, adjudication is also a quick and cost-effective solution for an employer or building owner to obtain payments to resolve defects with a building that the contractor cannot or does not want to rectify or to resolve payments due to a contractor. We generally see adjudication used to resolve disputes in respect of the final account, interim payments, defects, delays and disruptions, as well as with works and extensions of time for the completion of works. All of these have been made more likely as a result of the impact of Covid-19, as many companies have struggled to deliver.”
Finally, Ian comments that a party to a construction contract can refer a dispute to adjudication at any time before or after construction works or operations have been completed, so used mid contract, it may offer resolution to a dispute with limited disruption to an on-going project or relations.