This is my second article reviewing the basics of adjudication. You will recall from my previous article that my aim is to put the alleged complexities of adjudication in perspective and as far as possible empower those of us that actually work in construction, and are only occasional users of adjudication, to understand and be capable of entering into and completing the adjudication process themselves without specialist advice.
Some commentators have welcomed the Court of Appeal decision in PCH v Systech and suggest that its effect will be to improve the quality of adjudication decisions. Others despair that it ignores the practicalities of this swift, rough and ready procedure. Whilst it is perhaps difficult to argue with the result on the particular facts of that case, I consider any wider application of the decision to be an unwelcome development in adjudication jurisprudence. The purpose of this article is to highlight some of the potential implications of the decision.
Payment and adjudication in the Australian construction industry is governed by individual State and Territory legislation. Such legislation in Australia commenced on 26th March 2000, in New South Wales. Five States, the Northern Territory and the Australian Capital Territory (“ACT”) followed over the years, each of which has its own disparate security of payment legislation. Of the fourteen or so pieces of security of payment legislation internationally, eight are within Australia.
There is now a new executive committee for the society: Edward Quigg is senior vice-chairman, Tim Willis is junior vice-chairman and Theresa Mohammed has become honorary secretary. Susan Francombe has also kindly agreed to coordinate matters relevant to the annual general meeting whilst Richard Booth has joined the committee and has agreed to take over from Tim Willis in the arduous role of regional coordinator. Hamish Lal continues as treasurer and reports a very stable financial position.
After much debate the Construction Industry Payment and Adjudication Act 2012 of Malaysia received Royal Assent on 18 June 2012 . It came into force on the 22 June 2012, and so Malaysia now has a statutory payment and adjudication regime for construction contracts.
I was pleased to see that we have a new series for this newsletter called ‘Back to Basics’. This is welcome because, after 14 years of adjudication, complacency has grown. Adjudication is often seen as the only route for dealing with the dispute. This has led, in my experience, to the basics being ignored. Often whether there is in fact a contract in writing is ignored.
In the November 2011 edition of this newsletter I wrote an article about a panel debate held on the ‘new’ payment provisions by the London and South East Region. One year on, I thought it was worthwhile reviewing how they are faring.
As many of you are aware from previous newsletters or otherwise, the Construction Contracts Bill was dramatically passed by the Irish Seanad (Upper House) in the dying hours of the last parliament. Since then, the Bill has made a slow progress into the Dáil (Lower House) and is now awaiting Committee Stage there.
With the season of goodwill almost upon us, this double edition of the Adjudication Society’s newsletter provides something of the Past, Present, and Yet to Come reminiscent of Charles Dicken’s A Christmas Carol.
In PC Harrington Contractors Limited v Systech International Limited  EWCA 1371 (Civ) handed down on 23 October 2012, the Court of Appeal confirmed that an Adjudicator is not entitled to be paid his fees where he commits an error of jurisdiction or breach of natural justice, with the result that he fails to decide the parties’ dispute. The Court of Appeal held that the parties had bargained for an enforceable decision. As the Adjudicator had not produced that, he did not carry out the contract. Therefore he was not entitled to any fees.
From time to time complaints arise regarding decisions containing grammatical or factual errors. I am sure most practitioners would prefer that their decisions were error free, but as long as adjudicators are human it should not be surprising that decisions in a time constrained process may contain typographical or arithmetical errors. So, should the fact that a decision contains an error give ground to a legitimate complaint?
A criticism sometimes levelled at us in the Adjudication Society is that we can seem to focus on the problems with adjudication rather than on how to use the process. Adjudication is designed to be a rapid cost effective method of resolving construction disputes during the life of the project, which will allow the parties to continue with their contractual relations and deliver projects more efficiently. It need not be either complex or difficult. If you are a competent project manager then adjudication should be a tool in your tool box to help you manage your work.
The extent to which an adjudicator can use his own knowledge and experience is of course not a new issue. It has been the subject of numerous cases, most recently a flurry of cases in the Scottish courts. A recent debate at an Adjudication Society meeting would suggest however that some confusion nevertheless remains in this area. It may be helpful therefore to re-visit the case law, provide a summary of the current position and consider the practical implications.
Some people believe (incorrectly) that a Black Hole and an Insolvent Company are one and the same thing.
After much debate the Construction Industry Payment and Adjudication Act 2012 of Malaysia received Royal Assent on 18 June 2012. [Rules of Malaysia, Act 746, Construction Industry Payment And Adjudication Act 2012. English Translation.] It came into force on the 22 June 2012, and so Malaysia now has a statutory payment and adjudication regime for construction contracts.