Alternative dispute resolution relates to the use of different methods like arbitration, mediation and the like, for solving the disputes, without having to go for litigation. Amongst the leading methods of alternative dispute resolution is adjudication, whereby the adjudicator reviews the arguments, and evidence put before it, in order to come to the decisions; and in this way, the matter is resolved. The adjudicator basically adjudicates or judges the entire matter, as is done by a court judge, but with less formality and hassle (Uff, 2013). As is the case with anything, there are certain limits and limitations to the alternative dispute resolution, particularly to adjudication. This clarity was brought through London & Amsterdam Properties Ltd. v. Waterman Partnership Ltd [2003] EWHC 3059 (TCC). This discussion highlights the manner in which clarity is brought to the matter by the use of quoted case.
The case of London & Amsterdam Properties Ltd. v. Waterman Partnership Ltd was related to the party referring the case, making delayed submission, regarding a major part of its quantum evidence till the reply, as a result of which, the responding party did not get a lot of time to deal with it. It was thus held by the court that the evidence had to be provided along with the referral notice, especially due to the fact that it went on to be one of the most important issues of the dispute; and there was a refusal of granting summary judgement due to these reasons (Pickavance, 2015). But before getting into the details of this case, the role of adjudication in context of construction contracts need to be highlighted.
Adjudication is the method which applies to nearly all the parties under the construction industry; which is not only implemented through the Housing Grants, Construction and Regeneration Act, 1996, but also through the current JCT 2016 contracts edition (Chappell, 2013; JCT Ltd, 2018). Adjudication was initially brought to the standard form of construction contract back in 1976 where it was incorporated as a type of domestic subcontract, which was intended for being used with the JCT 63. The construction industry has been offered with an option of faster and cheaper mode of settling the disputes through the independent body being the adjudicator. This has allowed for quick determination of cash flow. The courts too have lent their support to the process of adjudication where they have recognized that it was the determination of the Parliament that a simpler process be adopted for temporary decision, which could be enforced by the courts (Mann and Wong, 2016). This was due to the fact that this allows for the cases to be dealt in a faster manner. Since the inception of the Housing Grants, Construction and Regeneration Act, 1996, out of the 1500 adjudications, merely just 300 were subjected to an action for enforcing the decision (Dancaster, 2005).
There have been critical reviews and reports which make attempts to identify the key concerns and problems in adjudication and highlight that there is a need for improvement in adjudication. The quoted case is an evidence of this fact, where it was claimed by the judge that adjudication could not deal with complex issues. Even though adjudication is a success when it comes to the matters of disputes involving payment issues, it proves to be unsuccessful in complex issues. This case also gave the lessons on the hourly rate being the reasonable and sensible yardstick for the purpose of determining the fees of the adjudicator. Where the dispute gets crystallized on any liability, where the details of quantum are not available, then it can be stated that the dispute covering both liability and quantum has taken place. Where there is an ambush through submitting the evidence in a delayed manner, it could result in the natural justice being contravened, where the other party is not provided with the opportunity of commenting on it. The adjudicators are not to go forward with referring at all costs where the sense of natural justice cannot be attained, and at such instances, the adjudicators have to abandon the referral (McKenna, 2003).
This case was particularly important from the prospects of admission of evidence and issues. The adjudicators are required to consider all the relevant information, which is provided to him by the disputing parties. In such adjudications, the principle of natural justice also requires the same result (Fenwick Elliott LLP, 2003). Though, when the admission of evidence gets delayed, the adjudicators have to, at times, be pro-active in excluding it, based on the fact that it would be opposite to the principles of natural justice for allowing its admission. The quoted case saw the claimant seeking to rely upon the material, which was brought forward very late, and that too after the defendant had given their response. Even though the respondent had been given a week for replying to the new proof, the situations were such that there was an insufficient amount of time, and this proof was regarded by the court as an evidential ambush, which was against the natural justice principles (Jinadu, 2006). This is not the only case where this principle was applied with regards to the new issues being introduced. The case of McAlpine v Transco [2004] EWHC 2030 (TCC) is an example of this. In this matter, McAlpine was given the permission of introducing new issues, but such matters in adjudication which had earlier not been included in the Referral Notice or Notice of Adjudication. This was again based on principles of natural justice (McKenna, 2004).
The handling of the new evidence by the adjudicator of the quoted case was rightly held by Judge Wilcox as being lame, instead of stating that he would be keeping the complaint of Waterman in mind, while the evidence was being considered. The adjudicator should have considered if there were any grounds based on which London & Amsterdam Properties Ltd should have been allowed with the submission of this later information. No consideration had been made by the adjudicator regarding the sufficiency of time, with Waterman, for answering the late evidence. Judge Wilcox did acknowledge that a mere ambush would not result in procedural unfairness. Though, he did clarify that the submission of late information had to be taken as the adjudicator making the decision, based on the evidence which was complained of. Further, there was absence of the expert evidence which led to Waterman not having a fair opportunity of adducing it. Due to these reasons, there had been a major and relevant contravention of natural justice, rightly upheld by the judge of this case. The scheme did not need the adjudicator in dealing with the adjudication at every cost, as there would be such instances where the referral could not be dealt in an impartial and fair manner (Bailii, 2003).
Conclusion
To bring the discussion to its conclusion, it becomes clear that adjudication plays a crucial role in the construction contracts. When the disputes are presented, the alternative dispute redressal methods are made use of, particularly adjudication. In making use of it, the principles of natural justice are upheld, and this is done in a righteous manner, as was seen through the quoted case. The judge was right in holding that natural justice had to be applied while accepting any new evidence. This view is further strengthened by other cases where a similar view was applied.
References
Bailii. (2003) London & Amsterdam Properties Ltd v Waterman Partnership Ltd [2003] EWHC 3059 (TCC) (18 December 2003). [Online] Bailii. Available from: https://www.bailii.org/ew/cases/EWHC/TCC/2003/3059.html [Accessed 23/02/18]
Chappell, D. (2013) Understanding JCT Standard Building Contracts. 9th ed. Oxon: Routledge.
Dancaster, C. (2005) Avoiding disputes and what to do if things go wrong. ADR. Glamorgan: University of Glamorgan.
Fenwick Elliott LLP. (2003) London & Amsterdam Properties Limited v Waterman Partnership Limited. [Online] Fenwick Elliott LLP. Available from: https://www.fenwickelliott.com/research-insight/adjudication-case-notes/london-amsterdam-properties-limited-v-waterman-partnership-limited [Accessed 23/02/18]
JCT Ltd. (2018) Adjudication Agreement (Adj). [Online] JCT Ltd. Available from: httphttps://www.jctltd.co.uk/product/adjudication-agreement [Accessed 23/02/18]
Jinadu, A. (2006) UK: Adjudication Round-up: Key Decisions and Developments 2004-2006. [Online] Mondaq. Available from: https://www.mondaq.com/uk/x/39678/Adjudication+Roundup+Key+Decisions+and+Developments+20042006 [Accessed 23/02/18]
Mann, P., and Wong, D.T.W. (2016) Construction Adjudication: The Way Forward, The Construction, Building and Real Estate Research Conference of the Royal Institution of Chartered Surveyors, Toronto Canada, September 2016 (ISBN: 978-1-78321-160-9) [Online] RICS. Available from: https://www.rics.org/Global/Construction%20Adjudication%20The%20Way%20Forward.pdf [Accessed 23/02/18]
McKenna, C. (2003) London & Amsterdam Properties Ltd v Waterman [2003] EWHC 3059. [Online] Adjudication. Available from: https://www.adjudication.co.uk/archive/view/case/808/london_&_amsterdam_properties_ltd_v_waterman_%5B2003%5D_ewhc_3059 [Accessed 23/02/18]
McKenna, C. (2004) McAlpine PPS Pipeline Systems Joint Venture v Transco Plc [2004] EWHC 2030 (TCC). [Online] Adjudication. Available from: https://www.adjudication.co.uk/archive/view/case/73/term/search+our+site/mcalpine_pps_pipeline_systems_joint_venture_v_transco_plc_%5B2004%5D_ewhc_2030_(tcc) [Accessed 23/02/18]
Pickavance, J. (2015) A Practical Guide to Construction Adjudication. West Sussex: John Wiley & Sons.
Uff, J. (2013) Construction law: law and practice relating to the construction industry (11th ed.). London: Sweet & Maxwell / Thomson Reuters.
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