The 'must know' guide to construction contract principles
04/06/13 - This 1 DAY COURSE will consider the principles of contract law in practice and their application to construction contracts and administration.Read More
London / Epping OfficeTel: 0845 345 1244
Fax: 0845 345 1039
Cardiff OfficeTel: 02920 474 570
Fax: 02920 474 575
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Adjudication and ADR
Alternative Dispute Resolution or ‘ADR’ provides procedures for the resolution of disputes other than through the Courts. ADR comes in many forms and can be both consensual and mandatory.
At Silver Shemmings we recognise the potential benefit of ADR, where the allocation of an appropriate procedure mitigates wasted time and cost for our clients, whilst also considering privacy and effectiveness of the final outcome.
ADR may take many forms, such as:
Negotiation - Consensual
Mediation - Consensual
Conciliation - Consensual
Adjudication -Consensual and Mandatory (under the Housing Grants Construction and Regeneration Act 1996)
Arbitration - Consensual
Expert Determination - Consensual
Med/Arb and Arb/Med - Consensual
Whereas in the past Parties may choose to ignore the effectiveness of ADR processes to stall the other Party’s claim or give themselves an unfair financial advantage the Courts now give short shift to Parties that ignore an opportunity to settle outside the Court.
Indeed the case of Halsey v Milton Keynes General NHS Trust  has caused Parties to consider very careful the matter of choosing to ignore ADR at their peril. In this case it was found that where an unsuccessful Party proves, on the balance of probability, that ADR was not utilised unreasonably by the other Party the departure from the general rule that costs follow the event may be reversed. That is you may win but have to pay all the costs for not allowing ADR the opportunity to make the action through the Court unnecessary.
Moreover the use of ADR is emphasised in certain areas of litigation by the requirement of Parties to comply with Pre-action Protocols, such as:
The Pre-Action Protocol for:
Personal Injury Claims
Construction and Engineering Disputes
Disease and Illness Claims
Possession claims for rent arrears
Again failure to understand and/or comply with these Protocols may leave a successful litigant liable for costs in any event.
At Silver Shemmings we have individuals who have vast experience in dealing with Pre-Action Protocols and ADR on behalf of clients as well as acting in the capacity of Mediators, Conciliators, Adjudicators, Arbitrators and Experts.
Whilst the above list of ADR techniques are mainly by consensus of the Parties Adjudication may not be. Within the Construction Industry Parties are able to have their disputes and differences settled by Adjudication under the Statutory procedure afforded by the Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996). This procedure has now been adopted to become ‘Act compliant’ in most standard forms of Main, Sub and Consultancy Contracts.
Provided the contract satisfies Section 104 of the HGCRA 1996 the other Party cannot refuse the right to adjudicate. Moreover providing that the Adjudicator acted within his jurisdiction the Decision is usually enforceable through the Courts.
Adjudication is in essence meant to be a cheaper and quicker dispute resolution procedure to Arbitration and Litigation, with a time period of 28 days from Referral (issuing the statement of case) to Decision. This time can only be extended by 14 days initially with the consent of the Claimant (Referring Party) and thereafter with the consent of both Parties.
The advent of proposed changes to the HGCRA 1996 are currently being assessed and advised upon by Silver Shemmings to our clients and in seminars on the effect of the ‘Local Democracy, Economic Development and Construction Act 2009’
Silver Shemmings are at the forefront of understanding, teaching and utilising ADR to their client’s best interests. Should you need advice as to how to take your claim forward outside the traditional route of litigation or if you are having to deal with a pre-action protocol letter of claim, a Notice of Adjudication or any other ADR procedure then contact the following experts in this field of dispute resolution:
For more information and initial advice please contact us on:
Sarah Shemmings or Richard Silver
Tel.: 0845 345 1244
Robert Shawyer – Cardiff
Tel.: 02920 474 570
Don’t forget that you can also make initial contact through our free helpline 08455 1 92 92 1