REUTERS | John Kolesidis

“Adj-Med”: a new and improved form of ADR?

What is “Adj-Med”?

In their blog posted on 29 October, PLC Construction referred to the new adjudication rules launched by CEDR Solve. These provide that, once the adjudicator reaches a decision, he may invite the parties to take part in a mediation. He does not reveal his decision to the parties, unless the mediation is unsuccessful at resolving the dispute.

Below, we look at reasons someone might consider using “Adj-Med”, and some reasons why you might be better off avoiding it, for now at least.

Why “Adj-Med”?

The idea is a good one in theory. Adjudicators occasionally express the view that if they had been invited to act as a mediator, they might have been able to resolve the dispute on a less adversarial basis. Adjudicators may be able to persuade the parties to participate in mediation on this basis.

A mediation at this stage may also be cheaper than traditional mediation because the adjudicator/mediator will be up to speed with the issues in dispute, and will not require detailed position statements from the parties.

Any drawbacks?

Our main question is, why would anyone agree to take an adjudicator up on the offer to mediate?

If you consider that the adjudication process has gone well for you, you will be content to wait for the adjudicator’s decision. If you consider that the process has gone badly for you, you will be unlikely to ask the adjudicator, who has probably already made up his mind about the merits of your case, to act as a mediator.

In our view there is also a real danger of a conflict between the two roles of adjudicator and mediator. Generally in an adjudication, an adjudicator acts in a quasi-judicial role, and comments on the parties’ cases, prior to reaching his decision. A mediator, on the other hand, is party to confidential information which must not be made available to the opposing party. It is likely that an adjudicator will have to refrain from commenting on either party’s case if he subsequently intends to act as a mediator. Equally, it is likely that the parties will avoid exchanging frank views with the mediator if it is possible that he will be appointed to act as an adjudicator in subsequent disputes.

Despite its low costs, relative to a traditional mediation, the fact remains that this is still an extra layer of costs to be added to those costs already incurred by the parties to the adjudication. Perhaps a more appropriate time to mediate is following the issue of an adjudicator’s decision, in circumstances where the unsuccessful party is seeking to challenge that decision.

There are also potential procedural difficulties. The parties must remember to extend the time for the adjudicator to make his decision, since if they forget to do so, and the mediation does not lead to settlement, his decision may be made outside the time limits imposed by the Housing Grants, Construction and Regeneration Act 1996, in which case it will be invalid.

Conclusion

Avoid for now. Time will tell whether the potential problems with this procedure are ironed out, but, in the meantime our advice to clients would be to give “Adj-Med” a miss. It would be interesting to get adjudicators’ views on this point.

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