Dealing with disputes.

Byline: By Simon Lewis

Many years ago, Parliament included in a portfolio piece of legislation some clauses dealing with construction contracts.

This was the Housing Grants, Construction and Regeneration Act 1996 and, among other things, it made adjudication a statutory right.

Adjudication is the method by which disputes arising under construction contracts can be determined.

Adjudication was supposed to be quick and temporary ( a way of getting most of the right cash into the right pocket pending a full-blown dispute later on, be that in the courts or in front of an arbitrator.

At about the same time, the Arbitration Act 1996 arrived. This Act comprehensively revised previous legislation in relation to arbitration.

Most people, however, were more interested in adjudication. Arbitration was often overlooked.

At the same time that all this was happening, the construction industry began to appreciate the benefits of mediation ( a facilitated negotiation process designed to enable the parties to do a deal rather than spend huge amounts of time and money arbitrating or going all the way to trial.

So how did these changes affect dispute resolution in the construction industry?

Given that the principle of evolution applies as equally to disputes as to anything else, how have these processes evolved in the decade since they were introduced?

Analysing the work undertaken by the dispute resolution team in the construction and engineering group at Dickinson Dees LLP, it is clear that the landscape is very different from that which was familiar in the early 1990s.

Then, we were all used to dealing with large pieces of litigation and arbitrations likely to take years to resolve. Nowadays, the bulk of our work is either adjudicating or mediating or, sometimes, one after the other.

We undertake about 80 adjudications a year, and somewhere in the region of 20 mediations.

What happened to arbitration? The problem is that arbitrations have a habit of looking a bit like full-blown litigation ( something to be avoided.

So, the wise men and women of the Chartered Institute of Arbitrators realised that they needed to start reminding people that, in fact, arbitrations could be almost as quick as adjudications, and certainly more flexible. In addition, the judges in the construction courts began to spend their time resolving arguments about the adjudication process.

One of the consequences of this was to incorporate principles about procedural fairness ( giving both sides a chance to present their case and making sure that the adjudicator acted impartially. These principles also apply to litigation and arbitration.

In short, although it wasn't supposed to be this way in the beginning, adjudication began to resemble a sort of mini- arbitration.

This trend is heightened by the fact that adjudications are tending to get bigger and more complex and take longer to complete.

At the same time, arbitrations are becoming, at least, potentially quicker and more streamlined. Will the two meet somewhere in the middle?

So where next? Evolution moves in mysterious ways ( consider the duck-billed platypus. It is quite possible that adjudication will come to resemble arbitration in many respects.

Maybe mediation will become more regulated and, with the possibility that construction court judges will act as mediators on a more regular basis, we may see changes to that process as well.

For the construction industry client faced with this bewildering choice of dispute resolution options, my advice is what you would expect ( consult a lawyer first.

Simon Lewis is partner in the construction and engineering group at Dickinson Dees LLP. Contact Simon at [e-mail].