Adjudication: Tiered and Temporary Binding Dispute Resolution in Construction and Engineering

When we proposed this Special Edition of the Journal of Professional Issues in Engineering Education and Practice, we did it against a backdrop of the Housing Grants, Construction and Regeneration Act 1996 (HGCRA) in England and Wales, which introduced adjudication as a first-tier method of dispute resolution in all relevant construction contracts. This was a major step and extraordinary legislative intervention. It was also an opportunity for empirical study and data in an area dominated by anecdote and hearsay. Enforcement, procedural, and jurisdictional issues relating to adjudications or decisions made by adjudicators have produced a large body of case law. In addition, the statutory changes created the role of adjudicator and offered a new career path for many construction professionals.

We knew that adjudication had become a statutorily imposed method of dispute resolution in the United Kingdom and we suspected in different forms in New Zealand, Singapore, several states of Australia, and the United States. We hoped that papers might be forthcoming that would explain the position around the world and add to the debate about construction dispute resolution. The response has been so strong that the special edition has been split into two special issues, and some papers have been carried over to the next special issue.

The papers included in this special edition are mixed: some are research papers in the usual ASCE sense, some are research papers in the legal sense, and we hope that some will aid in answering that old question: What is different or special about construction?

Chris Dancaster, one of the UK’s most eminent adjudicators, sets the scene, providing the history (before HGCRA) and then an adjudicator’s perspective since. Adjudication under the HGCRA is a quick (28 days), enforceable, and a relatively cheap alternative to arbitration or the courts, covering all manner of disputes, and is available unilaterally at any time. Adjudication is “temporarily binding.” The substantive issues in dispute remain to be determined from first principles. The principles of natural justice (due process to an American lawyer) apply, but pragmatism is necessary in applying them. The adjudicator may get the decision wrong, but the courts will still enforce the wrong decision of an adjudicator. A “dispute” must exist for adjudication to be invoked.

Sean Brannigan, a barrister (the legal profession in the United Kingdom separates advocacy, carried out almost exclusively by barristers, from preparation, the province of the solicitor), describes UK legal developments via judicial intervention and its key battleground, natural justice.

Peter Kennedy, an academic and leader of the Adjudication Reporting Centre at Glasgow Caledonian University, provides useful empirical data in the United Kingdom thus far. If the editors are guilty of anything, and that is denied in any event, it is of English empiricism.

Conor Owens reports that dispute resolution in the construction industry in Ireland is about to change radically with the introduction of the new public works forms of contract. Traditionally, Ireland has had an image of being able to resolve disputes by the use of informal channels, and recourse to formal dispute resolution was seen as something to be avoided. The author asks if this will now change; he reviews the forms of dispute resolution that have traditionally been used in Ireland and details the new form of dispute resolution that is to be introduced. The new form of dispute resolution is unique and does not fit easily into any standard dispute resolution category. How will this dispute resolution procedure operate in practice, and how will it affect the ability of parties to resolve disputes?

Paul Teo describes how adjudication was introduced into Singapore under the Building and Construction Industry Security of Payment Act 2004, which most closely resembles the regime in New South Wales under the Building and Construction Industry Security of Payment Act 1999. Based on the statistics currently available, it would appear that the Singapore regime has enjoyed some success thus far in achieving its policy objectives of expediting payment and improving cash flow within the construction industry. The author questions whether apparent early success can be sustained and improved upon. This may have wider implications, including a possible reduction in the use of litigation and arbitration proceedings for resolving construction payment disputes in Singapore.

John Hinchey and Jeffrey Perry describe the United States as under certain dynamics or “tensions” inherent within, and associated with, all construction disputes that continue to resist efforts to speed up dispute resolution processes. These tensions must be reconciled or taken into account before any fast track or adjudication-type process will be generally accepted in the U.S. construction industry.

Thus, for now and in the foreseeable future, there will continue to be a smorgasbord of dispute resolution processes for resolving construction disputes.