Articles from the Silver Shemmings Ash Team on contractual matters, recent case law changes and items of interest in the construction and property world

Dispute Resolution Via Adjudication by Henry Hathaway

September 3, 2018 | Silver Shemmings

The key to taking a strong position in dispute resolution is to show compliance with all terms of a contract from the start.

Disputes are a fact of life in the construction industry and will in most cases centre on the amounts due under an agreement. Of course, parties enter into agreements with the best of intentions. But when a dispute or difference may arise concerning the amounts owed, or for works carried out that are alleged not to be in accordance with the contract, parties need to be protected.

In the UK, the courts adopt a position of “pay now and litigate later” when concerning adjudication. While the adjudication process does not adopt the same method or employ the same degree of witness evidence as courts, it is quick and ultimately cheaper than litigation or arbitration. This is particularly helpful where cashflow is a concern to businesses. What is important in this process is how the parties present their positions, as any decision will usually be based on paper evidence. This means that the adjudicator will make their decision based on the information available in front of them, and evidence that is more persuasive and that, on the balance of probabilities, is in the right, will lead to a favourable outcome for that party. Therefore, as with other forms of dispute resolution, one of the critical aspects is the quality of paper evidence, so keep a record of emails, letters, texts and other sources.

There are two common elements to all claims. Firstly, it must be established that there is an entitlement to claim under contract or common law; is there liability? Secondly, there must be evidence to determine damages. Whether bringing about a claim or defending one, these are the core points that need to be established. When parties attend a meeting to attempt to resolve their differences, there will be a requirement for a structure or overall strategy on how to approach the dispute. The adjudication process will require answers to three basic questions – what did parties agree to, on what terms, and for what value. Adjudicators will not be inclined to make a bad bargain a good one; rather they will seek to understand the common intention of the parties at the time the contract was formed, and what has changed.

Most disputes occur from issues that are created when the agreement is formed. Disputes may not manifest themselves for some time after, but they will have always been there, unnoticed.

The key to understanding how to prevent disputes, or how to achieve the best position when facing one, will depend on strategy and evidence gathering. The ability to establish a solid and robust position will be achieved if the party can provide evidence that corroborates their position, or demonstrates that on the balance of probabilities, their version of events was more likely. This is a continuous process that requires the necessary intensity and application throughout. If a party adopts this position and maintains the establishment and ascertainment principle throughout, then it will be in a far stronger position than simply addressing it when the issue occurs. This includes the need to comply with the actual terms of the contract, including any onerous points. Non-compliance with any terms can be fatal to the success of such a process.

Author Henry Hathaway is a Partner with Silver Shemmings Ash and is a graduate of Trinity College Dublin (Civil Engineering). He is a qualified Civil & Structural Engineer and has previously spent twelve years in the Construction Industry representing both Contractors and Clients in Engineering and Project Management, he specialises in Pre-Contract Negotiation, Contract Formation, Project Lifecycle, Tender Development, Identification of Delay & Disruption, Establishment of Claims, Ascertainment of Costs

AAt Silver Shemmings Ash, we provide seminars and training alongside our core activities in contentious and non-contentious matters. The purpose of these is to facilitate a greater knowledge and understanding of construction and property law. There remains a considerable lack of training in such areas for companies and this is an issue which we are looking to address

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