EG5113 Contract Law In Construction

Introduction:

Adjudication can be described as a matter of dispute resolution than can apply to all the parties in the construction industry. It is put into practice by the Housing Grants, Construction and Regeneration Act, 1996. In 1976, adjudication was introduced for the first time in a standard form of construction contract in the UK, where it was included into a form of domestic sub-contract with the intention that it can be used with JCT 63. In this way an option was offered to the construction industry regarding a cheat and a fast way to settle disputes through an independent body known as the adjudicator (Edwards and Anderson, 2002). As a result of quick determination, the cash flow was also secured.

Jurisdiction of Adjudicator: Generally the courts have supported the process of adjudication as they also recognize that the Parliament had the intention that the process of adjudication should provide a provisional decision that can be enforced by the courts. The reason behind this was simple. During the six years of the implementation of the HGC and R Act, out of the 15,000 adjudications, only 300 of the adjudications were the subject of a court action to put in force the decision. The verdict of the adjudicator needs to be implemented even if a mistake has been made by the adjudicator while misinterpreting the law affects (Friedman, 2008). The Court of Appeal has stated that the process of adjudication can be explained as a quick procedure in which errors can take place. As a result, it is important that the court ensures that the mistakes in the conclusions are determined. In Project Consultancy Group v Trustees of The Gray Trust (1999), it was mentioned by the court that the decision of the adjudicator can be challenged. The reason behind this verdict is that the jurisdiction of the adjudicator is often challenged by the defeated party in the form of "a last resort of hope". Due to this reason, the notice of adjudication is considered as of utmost significance. It provides the jurisdiction of the adjudicator. An example in this regard can be given of the case titled Carillion Construction Ltd v Devonport Royal Dockland Ltd. (2005) in the same way in Makers UK Ltd v The Mayor and Burgesses of the London Borough of Camden (2008), it was held by the court that it is better if all the parties restated their contact with the adjudicator because it will put an end to the challenges that are made against the jurisdiction of the adjudicator.

In this regard, several experts have been keen to identify the major concerns and the problems faced in case of adjudication. They have also tried to establish that there is a need of improvement in case of settlement. For example in London and Amsterdam v Waterman Partnership (2003) with court had stated that adjudication is not fully equipped to deal with complex disputes. Therefore, it was stated that while the process of a delegation can work smoothly in case of the disputes where the main issue is related with the payment, the process is not likely to be much successful with complicated questions are involved. Another issue that is present in this case is that of speed. Speedy process is considered to be in favor of the claimant (Galbraith and Stockdale, 2005). All instance, while the claimant has the time to prepare its submissions at leisure and then to decline an additional time, which in turn puts immense stress on the respondent who has to organize its defense rapidly and efficiently in a very less time.

Another issue present in this case was that the hearing of the case is debarred as a choice of a party. There are rising numbers of independent organizations like the JCT, CICMAR etc. that have their own adjudication procedures which are creating a vacuum. There the possibility of getting a process of adjudication that does not been tailored to the particular requirements of the project has decreased significantly (Adriaanse, 2016). In this way, it appears that there is a risk present for these small firms that they may be considered ex parte by such organizations or unfair obligations may be imposed on them by large companies. For example, in Bridgeway Construction Ltd v Tolent Construction Ltd (2000) an attempt was made by the dominant party to impose adjudication process on the other party under which the referring party had to pay all the legal expenses regardless of the fact that the party had won or lost the case.

The first case that succeeded in establishing that all decisions of adjudication were not automatically enforceable was that of Project Consultancy Group v The Trustees of the Gray Trust (1999). In this case, an award was made by the adjudicator to a party, but the contract was created between the parties before 1 May, 1998. As a result, the contract was not within the purview of adjudication provisions. A lot of challenges were present towards the enforcement of the adjudication decisions. Therefore, in the present times, the jurisdiction related with natural justice is still under development (Chappell, 2012). A famous case in this regard is Cantillon Ltd v Urvasco Ltd (2008), where the application of the standards of natural justice for enforcing the decision of the adjudicators was developed. However, it is a settled position under the law that a peripheral or trivial breach of natural justice will not result in invalidating the decision of the adjudicators. Therefore it is required that the breach should be significant, material and of the nature that it results in a prejudice to the defendant. As a result of these negative features related with adjudication, the reality is that there are only a small number of construction disputes that are directly going to the court. The meaning of this situation is that most small disputes and even a large number of disputes having high-value arguments are also being determined with the help of effective adjudication. The rising popularity of adjudication can be evaluated from the fact that in a large number of areas, even the contracts that do not fall within the Act now provide for some form of adjudication based on the statutory provisions with certain amendments, like giving a extended time scale.

In Birmingham City Council v Paddison Construction Ltd (2008), for the purpose of extending the time of the process of dispute resolution, second adjudication process was set. It came to light that the strict time scale of adjudication can be increased successfully for the purpose of making good. But the Act is not concerned with the status of the decision of the adjudicator. As a result, it should be included in the contract if they adjudication is going to be binding for the parties. However the key question is still to see if the process of adjudication has the capacity of dealing with complex disputes that are based on oral agreements with no enhanced powers of the adjudicators.

References

Adriaanse, J (2016) Construction Contract Law, 4^th Edition, Palgrave Macmillan

Chappell, D. (2012) Understanding JCT Standard Building Contracts, 9th Edition, Routledge

Edwards, L., and Anderson, R. N. (2002) Practical Adjudication . London: Thomas Telford

Friedman, D. (2008). Black hole cases, Contstruction Law Journal 10 - 21.

Galbraith, A., & Stockdale, M. e. (2005) Building and Land Management Law For Students. Oxford: Elsevier.

Birmingham City Council v Paddison Construction Ltd [2008] EWHC 2254 (TCC)

Bridgeway Construction Limited v Tolent Construction Limtied [2000] CILL 1662

Cantillon Ltd v Urvasco Ltd [2008] EWHC 282

Carillion Construction Ltd v Devonport Royal Dockyard Ltd [2005] EWCA Civ 1358

London & Amsterdam Properties Ltd. v. Waterman Partnership Ltd. [2003] EWHC 3059

Makers UK Ltd v The Mayor and Burgesses of the London Borough of Camden [2008] EWHC 1836

Project Consultancy Group v Trustees of The Gray Trust [1999] HT/99/29

Housing Grants, Construction and Regeneration Act, 1996