Practical Law

I know I’m not alone in thinking that the last few weeks have been a challenge, both personally and professionally. In a little over three months the whole world has been turned upside down and all because of the 2019 novel coronavirus disease (COVID-19).

Here in the UK, we are just starting week two of the coronavirus lockdown and most of us are still getting used to working from home every day. However, some folks don’t have that option and are still heading out to work each day, whether because they are key workers or because they can’t do their job anywhere else (like supermarket and construction workers), whereas others are stuck at home with nothing to do as they are part of the economy that is closed. Whatever our plans for 2020, they’ve all gone out of the window, at least for now.

I don’t know about you, but I never realised just how much working at home occasionally, the odd day here and there, differs from being here every day. Being away from co-workers is strange, not having the travel and routine of leaving the house is odd. It’s a tough time for everyone but, as the saying goes, the show must go on. In my case, that is working out how to keep adjudicating (and arbitrating) remotely. I haven’t been asked to mediate remotely yet, although that may only be a matter of time.

Adjusting to adjudicating remotely

Clearly I’ve done all the practical things, like bringing home a decent computer monitor and printer (and paper), and made sure my home office set up is comfortable and away from the children. You probably all saw the footage from a couple of years ago when two toddlers crashed their dad’s BBC interview. Thankfully, my kids are a bit bigger and less likely to do that, but it is still best to be away from them, just in case. We’ve also got ourselves set up with a Zoom account for teleconferencing.

Adjudicating (or arbitrating) remotely

So, what do I think parties need to know and do?

First and foremost, everyone needs to behave reasonably and be flexible.

This applies regardless of whether you are (or are acting for) the referring party or the responding party, starting an adjudication or part way through one. We are all in this together, we are all facing the same challenges and we all need to cut one another a bit of slack.

I have been appointed as an adjudicator since the lockdown started and I have already had parties playing hard ball on timetabling issues. I haven’t seen an ambush adjudication yet, but it wouldn’t surprise me if there are parties out there who think they can use the current situation to their advantage.

My advice is don’t. Adjudicators have to act reasonably and treat the parties equally. We have limited scope in what we can do, there are no penalties to impose in adjudication, no “unless orders” to ensure compliance with directions. Being belligerent and difficult, fighting too hard for the sake of it will inevitably irritate the adjudicator, but what does it gain you? Ultimately, it could lead to an adjudicator resigning, but that can’t be in either party’s interest in the long run.

Surely it is better to be reasonable and flexible, to agree a timetable that both parties are likely to be able to comply with and to be willing to agree extensions of time, when they are requested.

While it is easy to say you have a statutory right to the dispute being resolved quickly (because the Construction Act 1996 and the Scheme for Construction Contracts 1998 refer to disputes being resolved within 28/42 days), we must all recognise that that legislation was not drafted with the situation we are facing in mind. Cash flow may be even more important now, but arguing over points “because you can” only increases costs at the end of the day. Also, it may not make the cash flow faster.

I think we have to recognise that all parties and their advisors are under increased pressure at the moment. There are more external demands on people than usual, we are all adapting to new working methods, being at home surrounded by family, apart from elderly loved ones who may be vulnerable, and coping with the fact that we don’t know who might fall ill next. These are common problems for everyone. Adjudication is stressful enough, without adding all these additional pressures into the mix.

So, back to my plea about being reasonable and flexible.

It is also worth remembering that if you are preparing for an adjudication, you will face other issues. Things that spring to mind are access to documents (paper and electronic), access to witnesses (factual and expert) and access to legal advisors. And what about bundles. How do you prepare a bundle when you are working remotely? Is it going to be an electronic bundle or in paper form? Do you know what the adjudicator will want? How are you going to get it to the adjudicator? While electronic communication sounds simple enough, emailing large files is never easy, particularly over domestic internet connections. In my view, parties will need to think carefully about the documents that an adjudicator actually needs to see, rather than just dropping file after file on us, hoping we’ll find our way through the forest of paper.

And that brings me to meetings. Normally, I’m an advocate of meeting the parties. It can be more time and cost effective to have a meeting and it enables me to better understand what the dispute is about, to see the wood for the trees. Obviously, meetings can still take place via video conferencing, although it will not be the same, and they are likely to be shorter (for a number of reasons). This will increase the time an adjudicator spends on the documents.

I think we can all agree that site visits are unlikely for the foreseeable future too, regardless of whether a particular site remains open. That is one journey that none of us needs to make!

Looking forward

It wouldn’t surprise me if we see a rise in the number of disputes referred to adjudication. After all, we all know that in times of recession, parties start looking backwards to see if there are opportunities to claim money. I see no reason why that will not apply now, when parties cannot work on new or existing projects, their attention may turn to old projects. The rules around insolvent parties may have changed because of Bresco v Michael J Lonsdale, but that will only limit insolvency practitioners from starting adjudications in certain circumstances.

Natural justice breaches

Undoubtedly parties will resist enforcement, arguing natural justice breaches on the part of the adjudicator. It is inevitable, just as night follows day. I don’t have a crystal ball, so I can’t tell you what the courts will do but, knowing how some of the TCC judges react to these allegations, it is unlikely to be easy. If parties behave reasonably and are flexible, it may be unnecessary too.