When the chips are down, can 100-day arbitration cook on gas?
Not so long ago there was a television commercial that captured my imagination. A child asks her younger sibling: 'What do you like best, daddy or chips?' The younger child finds this difficult and spends the rest of the day pondering the respective merits of her male parent and the deep-fried potato product. The matter is decided, however, when her father strides into the kitchen that evening and pinches some of her chips.
Construction professionals may encounter similar difficulties when asked to choose between the dispute resolution procedures of arbitration and adjudication. Few start from a dispassionate perspective. Those steeped in the cut and thrust of on-site negotiation tend to favour what they see as the speedy, no-nonsense resolution, by one of their own, offered by adjudication. Others, with more experience of formal dispute procedures, believe that the problems of preparing and hearing a case fairly within 28 days are such that anything has got to be better. This, coupled with the new flexibility to be found with the advent of the 1996 Act, puts arbitration clearly in the lead.
Of course, there is nothing to say that one procedure should fit all disputes. The useful analogy of the toolbox of dispute resolution demonstrates that some conflicts call out for a quick fix, puncture repair-style adjudication, whereas others can only be resolved by the comprehensive arbitration service. The skill is in matching the dispute to the procedure. There is then the added tactical spin of deliberately choosing the wrong procedure and forcing it upon the dispute, however inappropriate, merely to make life difficult for the other side.
Nowhere is this more evident than in using adjudication for complex negligence claims against construction professionals. The unfortunate professionals (and their insurers) have no choice but to take part in the statutory process desperately trying to master the case against them and assimilate their defence in the ludicrously short time available, safe in the knowledge that, whatever the outcome, it will not do justice to either party's case. They can only hope for a better result when the whole story is fully aired in subsequent litigation or arbitration.
So the experience of half a decade of adjudication and post-1996 Act arbitration does not make it any easier to decide between the two.
Adjudication is too peremptory; arbitration too cumbersome. As a statutory process, little can be done to improve adjudication, in the absence of party agreement, without legislative intervention. Arbitration, on the other hand, is the creature of contract and the arbitration lobby has come up with proposals for a 100-day arbitration procedure, which seeks to combine the best features of arbitration with a short, but realistic time limit.
The abiding principle of the 100-day arbitration procedure is, much as it says on the tin, to ensure that all referred matters are decided by the arbitrator within 100 days. The proposed timetable allows for the recognised procedures of exchanging statements of case within workable time limits. These are to be supported by all evidence - including witness statements and experts' reports - relied upon.
Further documentation is limited to that specifically requested by the other party. A hearing of no more than five days can be held no later than 28 days after the exchange of evidence. The arbitrator is allowed just over a fortnight in which to produce a decision.
The job of producing statements of case, together with all supporting evidence within a month or so, is not to be underestimated. The subsequent periods for production of documents and hearing preparation do, however, allow for something that is quite impossible in adjudication - time for reflection. Rushed preparation guarantees a hearing as the parties simply have no time to consider the merits of their respective cases or to negotiate on the strength of them.
These proposals, which could either be incorporated into the contract or used to amend the existing Construction Industry Model Arbitration Rules (CIMAR), should go some way to facilitating a decision in favour of arbitration.
Nevertheless, the answer to the question, 'which do you like best arbitration or adjudication?'
may still be, 'chips'.