Adjudication and COVID-19: Keep calm and carry on

Adjudication and COVID-19: Keep calm and carry on

The COVID-19 pandemic has forced an unprecedented transformation of the justice system. Applications and trials are having to be heard remotely, using telephone and video conferencing software, with much of the UK adapting to working from home.

The Ministry of Justice has been consistent in its message that, where possible, hearings and trials should continue remotely where it is safe and viable to do so.

Adjudication proceedings - the show must go on

We are seeing judgments from the Technology and Construction Court (TCC) refusing to halt hearings and trials due to COVID-19 alone. In relation to adjudications, the TCC’s approach is that it will only be in genuinely valid and / or exceptional circumstances that the TCC will prevent an adjudication from going ahead.  Recent case law suggests that the Courts are unwilling to set a precedent on granting injunctions to stay adjudications in light of COVID-19 where parties have made little attempts to manage the difficulties presented by social distancing and self-isolation requirements. Such difficulties included:

• One party being unable to comply with the adjudicator’s timetable;
• Parties experiencing difficulties obtaining evidence; and/or
• Parties not being able to organise site visits due to lockdown/social distancing measures.

Parties to adjudication are being encouraged to come up with options/solutions for dealing with such difficulties. Where difficulties are not capable of being overcome or will lead to the collation and presentation of evidence taking longer, partiers are equally being encouraged to communicate those difficulties to the opposing party and the adjudicator as early as possible to allow for consideration of whether the timetable should be extended. If one party does not co-operate, the adjudicator can of course usually break the deadlock.

CIC launch low value disputes model adjudication procedure

On 1 May 2020, the Construction Industry Council (CIC) launched its low value disputes model adjudication procedure (model adjudication procedure). The aim of the model adjudication procedure is to allow parties (particularly SMEs), who would usually rule out adjudication due to prohibitive costs, to engage in a simpler, streamlined and cost effective procedure for uncomplicated disputes of £50,000 and under.

The model adjudication procedure provides a timetable for the procedural stages to the key elements of the adjudication,  as well as a cap on the adjudicator’s fees and expenses (split equally between the parties) of £6,000, and additional caps of £1,000 if a site visit is required, or if a meeting/hearing is needed.

All in all, each party should incur a maximum cost of £4,000 in relation to the adjudicator’s fees, making adjudications much more accessible and flexible for parties to engage in – particularly if they use lawyers willing to offer a fixed fee adjudication service. The model adjudication procedure has received support from various adjudicator nominating bodies.

Whilst the referrals using the model adjudication procedure are likely to be slow (initially at least), it is anticipated that this procedure will be used by SMEs in due course - particularly those looking to collect in monies in these potentially cash-strapped times resulting from the impact of COVID-19 on large swathes of the construction industry.

Parties looking to use the model adjudication procedure must refer to their contracts to see if this procedure can be used and/or seek mutual agreement with the relevant parties.

Contact us

To find out more, contact our construction disputes team.

Shakespeare Martineau has launched a free legal helpline offering bespoke guidance on a range of subjects from employment and general business matters, through to director’s responsibilities, insolvency, restructuring, funding and disputes. We also have a team of experts on hand for any queries on family and private matters too. Available from 9am-5pm Monday to Friday, call 0800 689 4064.

General advice in relation to COVID-19 can be found on our dedicated coronavirus resource hub.