of conflict
“Too many contractors just rush into adjudication without having fully developed their arguments and their submissions – that can be fatal”
decided sum and uses the adjudicator’s decision as some sort of negotiating vehicle to end up paying the other side less than the decided sum. I am not being critical, but this is just how it is.
Be prepared So, jurisdiction is a big issue in adjudication, and I support Rudi Klein’s position that the sooner adjudicators are able to decide on their jurisdiction, the better. There are provisions in the TeCSA Rules for this and it should be universally adopted as
soon as possible. I want to touch on preparing your
case for adjudication. This does not happen overnight and there are too many contractors who rush into adjudication without having fully developed their arguments and submissions – that can be fatal. I had a client on the phone this week who had just received a Pay Less Notice which put a big hole in the payment he was expecting. He was screaming down the phone: “I want to start an adjudication tomorrow.” After calming him down, we agreed on a reasonable period to get the show on the road. I can understand the frustrations of people running construction businesses in the UK, where they are owed significant sums of money that they can’t get in the bank to keep the business going, and they want to get the matter in front of an adjudicator ASAP. But they must be fully prepared before starting the process. So, given my lack of enthusiasm for adjudication, what are the options? As I have
hammered out in previous articles, do all you can to mitigate a dispute. Get the dates of your applications for payment agreed in advance, and stick to them; provide fully detailed and backed-up applications for payment to avoid money being stripped off; hound the other side for payment, if not made by the final date for payment; keep on top of cash flow. Suspension remains your most useful tool if you are not paid by the final date.
Positive moves
Regarding the increasing costs of adjudication, another issue that Rudi Klein has been very concerned about, I am attracted to the recent proposals from the RICS and TeCSA to have a low-cost scheme for adjudications relating to payment issues. I think this is a very positive move for the industry. However, that is only one aspect, and
the other aspect is the cost of legal advisers representing parties. It is beyond my comprehension
why parties engage lawyers to become involved in ‘Final Account’ disputes where the issues are purely measurement and valuation. There is no reason why a senior commercial manger and/or a commercial director of a construction organisation cannot run the process. Contractors should consider preparing the submissions then passing them to the advisers (not always lawyers) to ensure compliance with the procedure.
Protect yourself Finally, another anecdote – speaking to another client last week, he was due about £120,000 in respect of an interim application which was not paid by the final date for payment. He did a deal and accepted £105,000 on the basis of cash in the bank to pay the wages. If he had gone to adjudication, it would have cost him at least £20,000 of non-
recoverable costs and he would have been hung out to dry for four months. That, sadly, is the state of the UK industry just now. I close by saying the best defence is don’t get into a mess in the first place. I’ll discuss how you can do this in the next issue of CABLEtalk.
CABLEtalk AUGUST/SEPTEMBER 2019 35
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