By Vijay Bange and Tanya Chadha
In the UK, adjudication remains one of the quickest and most cost effective methods of resolving construction disputes. As most people adjust to the “new normal” of working from home, an away from the usual office environment, adjudication may not be at the top of everyone’s agenda. That is somewhat ironic given that the current COVID-19 situation is fast becoming a potential breeding ground for construction disputes. Projects are in delay, labour and materials supply may be an issue and cashflow may become and inevitable effect of the lockdown.
The courts have shown a resolve to carry on with court business where there are live proceedings. There was however some uncertainty as to what approach the TCC would take in relation to adjudications during the period of lockdown, particularly given the fast and furious nature of the process. Would breach of natural justice arguments hold strong in adjudications pursued during this restrictive period of lockdown? What would be the position where some relevant participants are self-isolating? Can the adjudication process be conducted fairly, and with proper regard to the rules of natural justice?
The TCC has recently addressed this issue and confirmed that when it comes to adjudication, it’s business as usual.
Are the rules of natural justice breached?
MillChris Developments Ltd v Waters [2020] 4 WLUK 45 concerned an application for an injunction prohibiting Waters from proceeding with an adjudication during the lockdown period. The adjudication timetable required evidence to be submitted by 3 April 2020 and a site visit to take place on 14 April 2020. MillChris argued that, notwithstanding a two week extension, the adjudication should not be allowed to continue. MillChris submitted there would be a breach of the rules of natural justice because:
- it was not currently trading and had insufficient time to prepare as a result of the health crisis;
- its solicitor was self-isolating so it would be difficult to obtain the relevant evidence; and
- its representatives were not able to attend the site visit and that was unfair.
The application for the prohibitory injunction was refused. Adjudication, by its nature, requires matters to be dealt with in tight time-frames and there was no reason why the lockdown exacerbated that. Papers could have been sent electronically or transported by other means. The two week extension proposed by the adjudicator could have adequately dealt with any concerns over availability of witnesses and preparing evidence. There was no reason, let alone any entitlement, for the parties to be present during the site visit. The adjudication was therefore allowed to proceed and the court held that there was no breach of the rules of natural justice.
How might adjudications proceed in practice?
Parties, and indeed adjudicators, that find themselves in adjudication proceedings during lockdown will now have to think practically and be more resourceful when it comes to preparing for, and dealing with, adjudications.
In Singapore, where a similar system of adjudication exists for construction disputes, new rules for electronic adjudication have recently been enacted (our Singapore office recently blogged on this here). In short:
- documents should be lodged and served electronically;
- telegraphic transfer of fees; and
- Adjudication Conferences by electronic means.
In the UK, there has been no legislative response as to how adjudications should be handled during the COVID-19 pandemic. The reality is that for most parties and adjudicators, the adjudication process is largely electronic in any event. In our view, parties could however think about the following points to help adjudications in the current climate run more smoothly:
- parties to be more co-operative on timetabling issues and consensually agree a more realistic timetable if 28 days is insufficient; now is not the time for point-scoring;
- think carefully about what documents are provided in the adjudication; a kitchen sink approach is not conducive to remote working, especially in tight timescales;
- ensure electronic bundles are well-organised and prepared so that they are easy to navigate; a single pdf comprises hundreds of pages is unlikely to be user friendly;
- using a video-conferencing platform for adjudication hearings;
- virtual site visits might be possible.
