Flashcards in Adjudication and Arbitration Deck (11)
What is ADJUDICATION?
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
What is ARBITRATION?
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 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