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Flashcards in Adjudication and Arbitration Deck (11)
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Used extensively within UK construction industry and apply to contracts by law; Housing, Grants, Construction and Regeneration Act 1996

Quick and cost effective method allowing both sides to put forward their outline arguments to adjudicator

Decision must be made in 28 days by the adjudicator

Adjudicator = independent 3rd party chosen by parties / Adjudicator Nominating Body (RICS, Construction Industry Council)

Decision = binding - although either party can seek another, more final, review of the dispute

Typically, adjudicators cannot award legal costs


Under JCT how long does an adjudicator have to make his award?

28 days from issue of referral notice

Can be extended to 42 if both parties agree


What is the process of adjudication?

1. Party referring the dispute serves Notice of Adjudication on other party

2. Adjudicator appointed within 7 days

3. Referring party submits Referral Notice (also within 7 days of serving the notice), setting out their case in detail

4. Responding party issues their response (typically within 7 days of the Referral Notice)

5. 28 days for decision by adjudicator from the Referral Notice being submitted

6. St Anne’s adjudicator - president of the Chartered Institute of Arbitrators


What are the advantages of ADJUDICATION?

Cheap; can be cheaper than suing the professional. Also no risk of having to pay the other side’s costs

Quick; decision can be made as soon as 56 days after arbitrator appointed

You have some control over who will be appointed and can choose an expert in the relevant field

Process can be more flexible than Court proceedings

Can agree with opponent what approach to legal costs should be

Potential strain on your management time = less


What are the disadvantages of ADJUDICATION?

Can be cheaper than suing in the Courts, BUT not a cost-free process

Often decided on paper = element of rough justice

May not be suitable for some claims if they are complex / of very high value / need witness evidence

Decision about whether to adjudicate / litigate = have to be made at very early stage and before you know what the professional’s position will be



More formal, contract-based DR process that mirrors litigation

Popular for resolving disputes

Requires an arbitration clause in the contract OR parties to agree to enter into arbitration agreement

Governed by the Arbitration Act 1996

Both sides agree to let an impartial third party, the arbitrator, decide the case

Legally binding – limited rights to appeal, only on basis of errors in law or improper process

Arbitrators have the power to award legal costs


What is the process of arbitration?

1. Claimant files Request for Arbitration

2. Defendant files Answer to the Request for Arbitration

3. Both parties select arbitrator / an Arbitrator Nominating Body (RICS, Construction Industry Council)

4. Arbitrator and parties decide timetable and schedule any hearings

5. The parties and/or lawyers put forward arguments and challenge each other’s experts/evidence

6. Arbitrator makes their decision


How can you make an arbitration appeal?

It is very difficult to appeal an Arbitration, they can only be appealed if it can be proved that the arbitrator was:
o Corrupt
o Bias
o Arbitrator exceeded their power


What are the advantages of ARBITRATION?

Cheap; usually a lot less expensive where fee paid to arbitrator = a lot less than paying expert witnesses to come and testify at trial

Dispute will normally be resolved much sooner

Parties to dispute usually agree on the arbitrator

Unlike a trial, arbitration is essentially a private procedure


What are the disadvantages of ARBITRATION?

If arbitration = binding, both sides give up their right to appeal / have judge decide

Very limited avenues for appeal, where an erroneous decision cannot be easily overturned

In most arbitration agreements, parties = required to pay for arbitrators, which adds additional layer of legal cost that can be prohibitive, especially in small consumer disputes


What is the difference between ADJUDICATION and ARBITRATION?

Adjudication = less formal than arbitration - arbitration mirrors litigation

Adjudication = more easily appealed and needs to be confirmed by a court judgement for it to be enforced

Adjudication automatically applies to all construction contracts by law, arbitration only when a contract includes for it