RICS has recently published the third edition of its guidance note, Surveyors acting as adjudicators in the construction industry. As is usual with RICS guidance concerning dispute resolution, I should declare an interest. I am chairman of the RICS Dispute Resolution Professional Group (DRPG) and the DRPG is responsible for standards concerning dispute resolution, including this guidance note. Apologies if I therefore appear biased!
The need to produce a third edition stemmed from the changes to the Construction Act 1996 introduced last year. However, rather than rush to produce the third edition to coincide with those changes, we decided to undertake a “root and branch” review. This allowed us to incorporate changes to case law, practice and procedure that had arisen since the second edition was published in March 2008. The draft was completed earlier this year, and was then put out for public consultation before finally being reviewed by Ramsey J, who very kindly wrote the foreword.
Practical guidance for all
PLC has already produced an update detailing the contents of the guidance note, and I therefore won’t take up your time doing the same. Rather, I wanted to pick up on a few things mentioned by Ramsey J in his foreword.
In Ramsey J’s view, the guidance note provides “immensely practical assistance”. This is certainly what the authors of the third edition strived for, and we were able to build on the excellent work of the authors of the previous two editions. While there has been plenty written about the law of adjudication, relatively little has been written about how to adjudicate, and the guidance note seeks to address this.
While the guidance note has been prepared to assist surveyors acting as adjudicators, as Ramsey J says, the guidance note “should be essential reading for all adjudicators and not just Chartered Surveyors”. Not only this, all parties and their representatives would benefit from reading the guidance note in order to understand how adjudicators are likely to deal with their disputes.
Adjudication is suitable for all disputes
Ramsey J also touches on the fact that adjudication is being used for increasingly larger disputes, and that some parts of the industry are concerned that:
“…the quick, simple and cheap process for the interim resolution of disputes has now started to lose some of those important qualities.”
While this may be the case, I don’t consider it to be a problem.
Firstly, it is what the customer wants. Many parties and their representatives prefer to use adjudication for larger disputes, disputes that might previously have gone directly to arbitration or the TCC. Why?
- While the parties are likely to have to bear their own costs in the adjudication, at least they know they will not be liable for the other party’s costs, who may have deeper pockets and be able to appoint a City law firm, QCs, and so on.
- Even with the vast improvements in the TCC in recent years, parties are still likely to see their money quicker if they adjudicate. Although disputes decided in adjudication could, in theory, end up being decided again in arbitration or litigation, in reality this rarely happens.
Secondly, I think adjudication remains suitable for smaller disputes. I’ve heard it said that adjudication is now unsuitable for smaller disputes and it won’t be long before we have to come up with a new method of resolving such disputes: “Adjudication Lite” as opposed to “Adjudication Max”.
I have one word for such naysayers: baloney. The beauty of adjudication is that it is adaptable and it remains suitable for smaller disputes where the parties are unrepresented. The key is to pick the right horse for this particular course, that is, the right adjudicator.
The authors of the guidance note have done a great job at giving practical guidance applicable to adjudications conducted under both the original and the amended Construction Act 1996. While future case law on the amended Act may demand a further edition of this guidance note, until then, this edition will prove to be very useful for all.