Adjudication and who carries the can
If you don't know who carried the can for the adjudicator's wrong decision on the pile test I asked you to imagine last week, don't worry; we are now many months further on, and that particular case is going to the House of Lords.
This week I want to give further consideration to the less exotic part of my example: extensions of time. This will be fertile soil for the nightmare adjudication that may soon be heading your way.
You are on the same job - a£6 million contract to run over 90 weeks. Early on, you remember, the adjudicator declared the dodgy pile test satisfactory and granted an additional 11-week extension of time, beyond the seven weeks already granted by you as architect.
You refused several further notices of delay during the ensuing months, showing from progress records, labour returns, and the record of monthly valuations, that the contractor was simply failing to manage his resources properly. To your great relief there were no further adjudications and eventually practical completion was signed, albeit, sadly, with a 35-week overrun beyond the 18 weeks already confirmed through the earlier adjudication.
Your review of extensions of time added nothing more and the furious contractor informed you that if 35 weeks were not granted, then they would 'most certainly' be secured by adjudication! Within the hour comes the adjudication notice citing almost every architect's instruction and every drawing issue as a cause of delay and disruption, with every notice to be opened up and reviewed, and claiming an incredible £4.6 million in addition to the original contract sum. Another adjudicator is appointed and, seven days after the notice, five immensely heavy volumes arrive, the proud product of the industrious site surveyors.
Now, although this is between builder and employer, make no mistake: it's about to become a serious problem for you. The surveyors took months preparing the claim and there are only seven days in which to reply, and believe me, without a well-prepared employer's defence,the contractor may well get away with it.
And an additional worry emerges: your employer has been advised to adjudicate against you to hedge the likely result of the building adjudication. The same adjudicator is appointed, and now you know with near certainty that the contractor's carefully prepared claim (no matter how shamefully inflated) will likely stick in part, and that part on you. For your employer has carefully deployed the argument that 'if anything has gone wrong it surely cannot be my fault'.
This is deeply worrying for your insurer and puts your excess at great risk. Another bad decision will of course be put right in a year's time by arbitration, but don't think it's all over. Four months later, when it' s time to renew your pi policy, your broker telephones to advise that your insurer (aware of the adjudication outcome) is declining to renew your policy. The only option you have to stay in practice (remember those arb Regulations?) is to pay a hugely inflated premium to another pi company.
Meanwhile, cracks begin to open in the blockwork due to the faulty pile, condemned by you on the engineer's advice, 'authorised' by the adjudicator. Responsibility for the losses arising out of that mistake will be a key test case.