Adjudication: heaven for some, but hell for homeowners
Is adjudication a good thing? This question calls to mind a sketch from the popular '80s television programme Not the Nine O'clock News. Mel Smith, in the unlikely guise of a free-thinking clergyman, was interviewed while lolling, irreverently, on the steps of a place of worship. 'Is the devil bad?' the interviewer asked. 'Well', mused the modern minister, 'that is one of those theological grey areas. '
So is adjudication a good thing? The answer you get depends upon whom you ask. Those advising contractors and subcontractors in particular, can be almost evangelical in their praise for the 28-day procedure. It invariably takes the reprobate paymasters by surprise and leaves them with no time to think up the usual blasphemous excuses for not paying. The fact that the courts have since held that even the tried-and-tested defences to claims for payment, such as counterclaiming the cost of remedying defective work, will not defeat an adjudicator's decision, unless the necessary, but rare, withholding notices have been served, is something of a hidden blessing.
Employers are less keen on adjudication, seeing it as yet another cross to bear in their long and arduous pilgrimage to that sacred goal of a defect-free building, completed on time and within budget.
The professionals seem, generally, to be entranced by the process. Some seem to talk about nothing else, spreading the word wherever they go. They gather together regularly to learn more of the message. Their devotion is all the greater if they also act as adjudicators.
The commentators vary in their views, but one voice from the wilderness has spoken out spitting fire and brimstone. 'The HGCRA [Housing Grants Construction and Regeneration Act], ' this voice said recently in Construction Law Journal (2000, Vol l6 No 2), 'represents a careful and deliberately targeted tactical attack against deductions by owners, even with the support of the certifier, and is so obviously against responsible consumer interests. Moreover, ' the voice went on, 'the detail of the Act, reinforced by the scheme and by the ministry's lamentable decision to abandon any attempt at accreditation of adjudicators, as well as wholly unrealistic time limits leading to the unavailability of well qualified and reputable persons at short notice, can be confidently expected to create a market of profit-orientated adjudication. ' Yes, it is clear that Ian Duncan Wallace QC thinks that adjudication is a bad thing.
He does flag up what he describes as 'one small mercy', which is that the Act denies the benefits of adjudication to (or keeps safe from its diabolical workings, depending upon your point of view) owners who build houses for their own occupation. It is true that the Act expressly excludes construction contracts with a residential occupier. Now why should that be? Wallace suggests that it indicates suspicions in high places about the reliability of Sir Michael Latham's message. Professional and personal experience support the view that having building works in your own home is stressful enough without exposing you to the additional burden, worry and expense generated by the prompt and relentless machinery of adjudication. But, and here is the rub, most welladvised individuals enter into a standard form of contract when commissioning work to their home. The current versions of all the JCT contracts include provisions for adjudication. There is nothing to alert homeowners, nor their professional advisers, that they do not have to agree to adjudication if they don't want to and there are no alternative contracts for use by homeowners who would rather be spared it. Furthermore, the JCT's new prize-winning contract specifically drafted for homeowners, expressly includes adjudication as a dispute resolution option. If the legislature believed that ordinary people should not be required to bow to the altar of adjudication, why has the JCT not respected this and kept homeowners and adjudication apart? Once you have signed up to a contract that provides for adjudication, there is no going back.
So, if you want to stay on the side of the angels, make sure that homeowner clients are given the opportunity to decide whether they think adjudication is a good thing.