RICS consultation on surveyors acting as adjudicators

Practical Law UK Legal Update 4-518-3399 (Approx. 6 pages)

RICS consultation on surveyors acting as adjudicators

by PLC Construction

Scope of the draft guidance note

The note is divided into three main sections:

A general introduction (see General introduction).
What happens on appointment (see What happens on appointment).
Procedural matters, including writing the decision (see Procedural matters, including writing the decision).

General introduction

Part 1 of the draft guidance sets out the scope, application and interpretation of the guidance note (paragraphs 1-5, draft guidance). This includes the role of the adjudicator and the principles of adjudication, as well as detail on the statutory framework (that is, the Housing Grants, Construction and Regeneration Act 1996 (Construction Act 1996), the Local Democracy, Economic Development and Construction Act 2009 (LDEDC Act 2009) and the Scheme for Construction Contracts (England and Wales) Regulations 1998 (SI 1998/649) (Scheme for Construction Contracts 1998) (and as amended)). The draft guidance is based upon the law and practice of England and Wales.

The draft guidance explains that, in addition to carrying out the functions of an adjudicator within the statutory timeframe, adjudicators are expected to have an understanding of (for example):

The statutory framework of adjudication and the court's interpretation of that framework.
How the standard form contracts have incorporated the statutory framework and how the courts have interpreted standard form contracts.
An up-to-date knowledge of the practice and procedure of adjudication.

Adjudicators are also required to ascertain the facts and the law in a manner that complies with the rules of natural justice. In doing so, adjudicators may take the initiative to ascertain the facts and the law (section 108(2)(f), Construction Act 1996).

For more information on the:

Statutory framework, see Practice notes, Adjudication: an introduction to adjudication and Adjudication using the Scheme for Construction Contracts 1998 and as amended.
Rules of natural justice, see Practice note, Adjudication: duty of natural justice.

What happens on appointment

Part 2 of the draft guidance deals with the adjudicator's appointment. It looks initially at nomination of an adjudicator by the RICS, and explains the process and timescales of the nomination process (paragraph 6, draft guidance). It also sets out matters that the RICS considers relevant when considering whether an individual is suitable for a particular appointment, including that:

The subject matter of the dispute falls within the "sphere of their normal professional practice".
The adjudicator and his organisation have had no significant involvement with either party to the dispute within the last five years.
The adjudicator is not involved in another case that would cause a conflict with the case that is the subject of nomination.
The adjudicator will have regard to this guidance note.

Potential adjudicators should also familiarise themselves with the RICS' guidance on bias (see Legal update, RICS publishes conflicts of interest guidance for dispute resolvers).

The draft guidance also deals with issues post-nomination, such as:

The fact that it is inappropriate for the adjudicator to spend any time on the dispute preparing for it (the dispute may not be referred even after the notice of adjudication has been issued). Only in exceptional circumstances should the nominee adjudicator charge for time spent considering an appointment or the notice of adjudication before the appointment is made (paragraph 6.7, draft guidance).
It is inappropriate for the adjudicator to claim a lien, but they may submit interim applications for payment of their fees (particularly in situations where the adjudication timetable has been extended by the parties) (paragraph 6.9, draft guidance).

Paragraph 7 of the draft guidance deals with appointment of the adjudicator directly by the parties, via a direct approach or being named in the parties' contract. It cautions against an individual accepting an appointment because the parties have selected him, even though he may not have the relevant technical expertise (paragraph 7.1, draft guidance).

Paragraph 8 of the draft guidance deals with the parties' objections to a nomination or appointment and resignation. Resignation should be considered "as carefully as a decision to proceed" and should only be for a justifiable reason that could not have been anticipated. One example of this is a dispute that falls outside the adjudicator's competence, but that was not easy to identify from the notice of adjudication (paragraph 8.2, draft guidance).

For more information on the:

Timescales in adjudication, see Practice note, Adjudication: section 108 and adjudication procedures.
Appointment process, see Practice note, Adjudication: selecting and appointing an adjudicator.

Procedural matters, including writing the decision

Part 3 of the draft guidance deals with procedural matters (paragraphs 9-15, draft guidance). These include:

The powers and duties of an adjudicator, including the use of assistance during the adjudication, using legal or technical advice, oral contracts and jurisdictional issues (paragraph 9, draft guidance).
The procedure of the adjudication, such as giving directions and extensions of time (paragraph 10, draft guidance).
Establishing the facts and the law, for example dealing with the parties' submissions and issues of natural justice (paragraph 11, draft guidance).
Evidential matters, such as factual and expert evidence, and what happens if the referring party "ambushes" the responding party (paragraph 12, draft guidance).
Other matters such as meetings with the parties, third party evidence and how to deal with intimidatory tactics from the parties (paragraph 13, draft guidance).
The form and content of the adjudicator's decision, including what the RICS considers to be the minimum requirements and suggested contents of the decision (paragraph 14, draft guidance). The draft guidance also refers to:
- Coulson J's "seven golden rules" for adjudicators (see Blog post, Coulson J’s "Seven golden rules of adjudication");
- adjudicators including reasons in the decision;
- awards of interest in the decision;
- dealing with slips and mistakes; and
- dealing with parties' costs.

Interestingly, when referring to costs, the draft guidance identifies the potential issues surrounding Tolent clauses and whether the Construction Act 1996 (as amended) outlaws such clauses. In essence, adjudicators are advised to be cautious when dealing with this issue and should be "reluctant to apply terms that strike at the heart of the principle that there is a right to have a dispute adjudicated" (paragraph 14.6, draft guidance). In addition, so far as an adjudicator has the power to deal with the parties' costs, they should follow the general principle that costs follow the event. Adjudicators should also familiarise themselves with CPR Part 44.5 and its Practice direction.

For more information on the:

Adjudicator's decision, see Practice note, Adjudication: an adjudicator's decision.
The costs debate, see Blog posts:

Comment

While this draft guidance is aimed at those RICS members who act as adjudicators, it will be of interest to parties who are involved in adjudication and their representatives. By setting out what is expected of an adjudicator who is a member of the RICS, parties will be aware of the minimum standards of behaviour that they can expect in their adjudication. On occasion, it may be helpful for the parties to be able to refer to this guidance when making submissions about the costs of an adjudication. Longer term, this should help to improve standards and may help to eliminate some of the challenges to adjudicators' decisions.

Source

RICS iConsult: Consultation on RICS draft guidance note - Surveyors acting as adjudicators in the construction industry (6 March 2012).

End of Document

Also Found In

Adjudication - ADR

Resource ID 4-518-3399

Published on 07-Mar-2012

Resource Type Legal update: archive

Jurisdictions

England
Wales