Adjudication procedures

In view of the fact that all four of  the CIDB approved standard form contracts include provisions for adjudication, albeit only FIDIC and NEC make it mandatory, and given CIDB’s unqualified support for adjudication, I thought it appropriate in this article to address some of the issues regarding the respective submissions and the adjudicator’s decision.

Since the majority of adjudications will be conducted on a document only basis, the format and content of the submissions becomes a vital ingredient for success. Regrettably the quality of submissions, in the main, do not reach the standards which are appropriate for this form of dispute resolution. The following guidelines may be of assistance to the parties and to adjudicators.

Preparing the claimant’s Submission or the Defendant’s Response to the Adjudicator

Since the majority of adjudications are conducted on the basis of documents only, it is vital that the impression created by the claim or response is one of honesty and integrity and, furthermore, that the actual presentation itself makes the task of the adjudicator as simple as possible.

Bearing in mind that an adjudicator’s most difficult problem with be resolving disputes of fact on the papers, it is essential that corroborative evidence should be given to support key facts wherever possible.  This can be achieved by way of sworn affidavits in respect of those persons involved in the construction and, if necessary, more than one affidavit supporting the same situation will ensure that the adjudicator gives maximum weight to that party’s factual submission.

General

The presentation or the defence should be submitted in a clear and logical format.  We recommend an executive summary which will give the adjudicator an opportunity to understand the key aspects of the submission before the adjudicator gets deeply involved in the supporting factual issues.  This executive summary should distil the substance of the dispute and should be devoid of argument and emotional content.  Irrespective of the relationship between the parties during construction, pejorative statements should not be made which might undermine the overall credibility of the parties’ submission.

The remaining supporting documentation needs to be properly indexed and paginated.  The supporting documentation should be clearly identified and, if it is appropriate to do so, should be separated into different files or, at least, into different sections and care and attention should be paid to the overall presentation, properly demarcating each section with different coloured dividers, and including a single cover page sub-index to each section.

A golden rule is to ensure that everything that the adjudicator requires should be contained within the submission.  Reference to documentation which is not included, even if that documentation has previously been submitted to the adjudicator, should once again be included in the current submission, unless of course a further reply is being submitted which can then be cross-referenced to the initial submission.

Given the relatively short time periods available, a balance must also be struck between providing irrelevant detail and providing detail which is necessary for a determination of the dispute.

It is rare that a dispute will proceed to adjudication which does not have issues of legal interpretation associated with it.  The respective parties’ version of that interpretation must be given and, where necessary, supported by a legal or contractual opinion from an authoritative source.  That source needs to be identified in the same way that an expert witness in an arbitration would need to have his qualifications proven then the qualifications of the individual providing the opinion should be also be substantiated in order that such opinion be given the appropriate weight by the adjudicator.  Similarly, if it is felt necessary to include a technical opinion, perhaps in regard to the way in which a structure is built or relevant aspect of a design, then this should similarly be provided by way of an expert statement and the expert’s qualifications fully justified.

Once the document has been fully compiled it should be comprehensively read, preferably by a member of the team who has not been involved in the project.  Inevitably the document will need to be compiled with people who are familiar with the project and there is the inevitable danger that that which was obvious to them through their involvement may result in an omission of significance.  Having an independent review prior to submitting to the adjudicator will hopefully overcome this situation by allowing omissions to be identified by members of the submitting party’s team.

The Reply

Whilst the principles which have been set out above apply equally to the respondent’s reply, some additional points are emphasised as follows:

  • Each and every allegation, fact or legal opinion or argument needs to be addressed in the reply and, to the extent that the respondent agrees with the claimant’s submissions, those areas of agreement should be identified;
  • Where the claimant’s facts are disputed then the respondent’s version must be properly reported once again preferably by way of supporting affidavits;
  • Factors which have not been addressed in the claimant’s submission but which, in the respondent’s view, are of significance will need to be incorporated.  However, it should be noted that, where new matter is introduced by the respondent, it is almost certain that the claimant will want the opportunity to deal with such new matter by way of a further reply.  This should be anticipated and the question asked as to whether it is in fact necessary to introduce the new matter and only to do so in the event that by its omission the respondent’s reply may be weakened.

We cannot emphasise enough the necessity to ensure that the format is clear, logical and attractive.  The impression created by the submission or the response may well influence the outcome of the adjudication.  To the contrary statements which are clearly incorrect, emotional attacks on the conduct of the other party and such like will undermine the credibility of the submission and may well ultimately affect the outcome.

The Adjudicator

We do not recommend that adjudicators peruse the initial submission until such time as they are in possession of the reply.  The impression created will be a one sided view and, since the reply may be several weeks away, the adjudicator may subconsciously tend to form an opinion which is favourable to the claimant.  Our advice to adjudicators is to set aside a quiet period and to read both submission and reply from cover to cover, preferably at a single sitting.  Thereafter to revisit both submissions and identify the key issues, if these have not been identified by the parties, and thereafter identify a schedule, similar to a Scott Schedule, in which the agreements and disagreements can be tabulated and disputes of fact can be identified.

In all but the simplest of disputes it is inevitable that the adjudicator will require additional information from the parties.  Our recommendation is that this information should be requested in writing and that a schedule of the required information be set out by the adjudication such that the respective party can respond on a point by point basis.  Adjudicators should try and avoid entering into premature debate with the parties or conveying, by way of their questions, a line of thought which might lead the party/ies to a premature conclusion as to the direction in which the adjudicator is moving.

All communications with the parties should be in writing and the adjudicator should avoid making contact with the parties telephonically and having discussions with each party individually.

Preparing the Adjudicator’s Decision

The adjudication process is part of an overall dispute settlement process.  It is of course to be hoped that the adjudicator’s decision will be as correct as circumstances permit and that the parties will accept the decision without the necessity to file a notice of dissatisfaction.  However, even if a notice of dissatisfaction is filed, given the amicable resolution procedure introduced by FIDIC, there is a very strong probability that any remaining disputes between the parties will be resolved by way of discussion during the amicable resolution process.  If this occurs then the overall process will be judged to have been a success and the adjudicator will have made a major contribution in this regard.

In order to facilitate this overall position, namely to place the parties in the best possible position to decide whether the adjudicator has got the probable most correct answer, it is essential that the adjudicator’s logic be clearly set out.  It is also essential that the adjudicator answers the right question, even if he does so in the wrong way, rather than answering the wrong question.

It is also important for the adjudicator’s own decision making process that his logic be set out to enable him to come to the necessary conclusions.

We recommend that the adjudicator repeats the key issues between the parties and their respective positions on these key issues should be summarised.  The extent to which the adjudicator has been persuaded by expert, legal or technical input should be referred to and why he has elected to prefer one expert’s views over another should also be explained.

The question which the adjudicator is required to answer should be clearly answered early on in the adjudicator’s decision.

If the adjudicator is required to calculate a time or monetary value then it would be expected that such calculations will have been based upon the information submitted by the respective party.  Adjudicators would be well advised, to the extent that they differ from the calculations submitted by the parties, to set out their own calculations clearly and prior to submitting their decision submit their calculations to each party for comment.  Obviously a tight time period for comment should be established by the adjudicator given his own obligations to complete the decision making process within the contractually tight time framework.

The decision should include a conclusion, being a summary of the findings of the adjudicator, and, finally, should the adjudicator consider it appropriate to do so, he should thank the parties for their assistance.

If these guidelines are followed then the process stands a very good chance of resolving the dispute without the necessity to proceed to formal dispute resolution.

Chris Binnington

THE CIVIL ENGINEERING CONTRACTOR JANUARY 2008