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Issues to consider before commencing an adjudication—checklist

Issues to consider before commencing an adjudication—checklist This Checklist highlights issues that commonly require consideration prior to a party referring a dispute to adjudication. It includes links through to in-depth guidance on the various issues and notes the relevant provisions of the Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996) where applicable. Legal matters It is necessary to check that there is a legal right to refer a dispute to adjudication, including whether the dispute has crystallised and comes within the scope of permitted disputes. • Entitlement to refer a dispute to adjudication The referring party must have a legal right to refer a dispute to adjudication. This can be either a statutory or a contractual right, or an ad hoc agreement between the parties to adjudicate. Therefore, consider: ◦ is there a statutory right—does the parties’ contract fall within the definition of ‘construction contract’ under HGCRA 1996, s 104 and is not otherwise excluded from its ambit? See Practice Note: What is a construction contract under the HGCRA...

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The Reply and further submissions in an adjudication

The Reply and further submissions in an adjudication This Practice Note considers: • the entitlement to submit further submissions in an adjudication beyond the Response (typically known as the Reply > Rejoinder > Surrejoinder etc) • the contents and form of such submissions, and practical considerations when drafting them For information on other adjudication documents, see Practice Notes: • The Notice of Adjudication • Adjudication—the Referral Notice • Adjudication—the Response Entitlement to make further submissions after the Response There is no automatic right for a party to make submissions after the Response, and it is not a breach of natural justice for the adjudicator not to permit such submissions (Barry M Cosmetics v Merit Holdings, AMEC Group v Thames Water). See News Analysis: Natural justice does not require adjudicator to permit a Rejoinder (Barry M Cosmetics v Merit). Nor it is normally a breach of natural justice for an adjudicator to set a timetable that does not allow for a Rejoinder (Balfour Beatty v Modus...

Introduction to the HGCRA 1996

Introduction to the HGCRA 1996 The need for legislation in the construction industry Throughout the 1980s and the early 1990s, the construction industry was characterised by inefficiencies, disputes and high levels of insolvency, particularly among contractors and sub-contractors. In 1994, Sir Michael Latham was commissioned to undertake a report on the issues affecting the construction industry. In his report, entitled ‘Constructing the Team’, Latham identified two areas which were pivotal to the issues affecting the industry: • disputes • payment Latham found that the industry needed a specific mechanism of dispute resolution which was accessible, quick and inexpensive to reduce the disputes culture within the industry. Latham also thought that ensuring cash flow to all levels of the industry would reduce contractor and sub-contractor insolvency, and create stability of employment. The HGCRA 1996 The legislative response to Latham's report was contained in Part II of the Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996), which was enacted in 1996 and came into force in May 1998....

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Letter challenging jurisdiction of adjudicator

Letter challenging jurisdiction of adjudicator [Address/headed paper of responding party] [Date] [Address of adjudicator] Dear [insert name of adjudicator] In the matter of an adjudication between [referring party] v [responding party] Lack of jurisdiction as an adjudicator We have received: 1 The Notice of Adjudication dated [date] 2 [The Referral Notice dated [date] served on [date] by [referring party]] 3 Your letter of [date] purporting to accept the appointment as adjudicator. We respectfully consider that you do not have jurisdiction to act as an adjudicator in this matter, or to allow an adjudication to begin or to continue. General reservation of rights We reserve our right to raise any objections to

Advice to clients—what is adjudication?

Advice to clients—what is adjudication? What is adjudication? You have asked us to provide you with a brief description of what adjudication is and how the adjudication process typically runs, in light of [[your proposal to enter into a construction contract with] [insert name of the counterparty] OR [in anticipation of adjudication proceedings between] you and [insert name of the counterparty]]. Adjudication is a procedure designed to enable parties to resolve disputes relatively quickly and inexpensively. Under the Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996), parties to construction contracts have the right to commence adjudication at any time. The parties refer their dispute to the adjudicator, who is an impartial decision-maker. The adjudicator is usually a construction industry professional (eg a quantity surveyor or engineer), or a lawyer with construction experience. They will consider arguments from both parties, and may also use their own initiative and experience, before making a decision on how the dispute should be resolved. The party that refers its claim to adjudication is...

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Where a sub-contractor has a number of unpaid invoices, can it commence a single adjudication in respect of all of them or would this constitute multiple disputes?

Where a sub-contractor has a number of unpaid invoices, can it commence a single adjudication in respect of all of them or would this constitute multiple disputes? This Q&A assumes that there is a dispute as to valuation of works carried out under a single unified construction contract between a contractor (C) and its sub-contractor (S) which is subject to the Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996) but does not include bespoke provisions as to referral to adjudication, and thus, Part 1 of the Scheme for Construction Contracts (the Scheme), SI 1998/649 applies. A party to a construction contract has a right to refer ‘a dispute arising under the contract’ to adjudication at any time under HGCRA 1996, s 108(1). It is very important for a party considering referring a matter to adjudication to consider closely whether an adjudicator will have jurisdiction to resolve the relevant factual dispute (or disputes) within a single adjudication, or whether several adjudications are necessary. See Practice Note:...

Is it possible for a referring party to submit arguments and documents in its adjudication reply which were not included in its referral?

Is it possible for a referring party to submit arguments and documents in its adjudication reply which were not included in its referral? Every dispute referred to an adjudicator is defined by reference to the notice of adjudication—a referring party is not entitled to increase the scope of the dispute via arguments and documents in its reply without agreement between the parties and the adjudicator. See, for example, KNS Industrial Services (Birmingham) Ltd v Sindall Ltd and Mecright v. TA Morris Developments Limited 26th June 2001 (not reported by ÀÏ˾»úÎçÒ¹¸£Àû®). However, a referring party can respond in its reply to matters raised in the response and provide documents relevant to this. Therefore, a key distinction to be made is whether the documents and arguments should have been raised at the outset, or whether they are just an understandable response to matters raised in the response. If the responding party is not given sufficient time to respond to the reply, there may also, depending on the...

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A failure to consider cross-claims in adjudication amounts to a breach of natural justice (Morganstone v Birkemp)

Construction analysis: This case concerned an adjudication decision, whereby the adjudicator decided that £207,076.00 was due from Morganstone to Birkemp Ltd upon Birkemp’s interim payment application. Birkemp sought to raise cross-claims in its defence in the adjudication, but the adjudicator held that these fell outside of his jurisdiction. Morganstone subsequently issued a Part 8 claim seeking declarations that the adjudication decision was wrong in law and unenforceable, and Birkemp issued a Part 7 Claim seeking enforcement of the award, which was transferred to be dealt with at the same time as the Part 8 Claim. The Judge declined to grant the declaratory relief sought by Morganstone, but also declined to enforce the adjudication award. It was held that the Adjudicator had breached the rules of natural justice due to the failure to consider Birkemp’s cross-claim. Written by Georgia Whiting, legal counsel at Ardmore.

AI in Construction Disputes

Construction analysis: The significant development in the capabilities of artificial intelligence (AI) in recent years may have a significant impact on construction disputes. Paddy Mockler of Philip Lee consider various potential uses of AI, its benefits in construction disputes as well as the risk it may pose.