The new look of Construction Adjudication in lockdown

With the UK Government’s unclear approach to ongoing construction operations, the likelihood of construction disputes being referred to adjudication remains.  The recent letter from the Secretary of State for Business, Energy and Industrial Strategy, Alok Sharma, to the UK’s construction sector described these as “challenging times” and he has advised that wherever possible, people should work at home. However, the letter goes on to state that for people working in construction where their job requires them to travel to their place of work, they can continue to do so. This is consistent with the Chief Medical Officer’s advice.

In these unprecedented times of remote working and businesses closing, we look at what challenges parties face in bringing or defending an adjudication.

Valid service of a Notice of Adjudication (Notice) may prove problematic.  If a contract requires a Notice to be delivered by hand to a party’s principal place of business and that business is closed because everyone is working from home, how is valid service to be effected?

If a Notice can be validly served and an adjudicator appointed, problems may also be encountered in the service of submissions in the adjudication.  The Referral, Response, Reply and so on may also need to be served by hand.  They are likely to be voluminous and the party responsible will have to ensure that the relevant documents are actually received by the other party in line with the tight timescales that are common in adjudication.  The most important deadline in this regard is ensuring the Referral is served no later than seven days following the valid service of a Notice.

The collation of documentation for adjudication submissions normally has to be done at short notice.  Even the most sophisticated of parties may not have the necessary resources at home to allow documentation to be printed, copied, signed and scanned. What should parties do if the adjudicator requires hardcopy documentation, how will this be produced and delivered to the adjudicator and the other party, and where will it be delivered? Legal advisors will have to work with adjudicators to negotiate sensible “work-arounds” such as dispensing with a paper bundle in favour of an electronic bundle.

Site visits may not be possible.  The challenges faced by parties do not just extend to physical documents; rather, parties may also face issues if an adjudicator requests a site visit. Parties may want to consider checking whether a building site and/or businesses remain open or accessible.

With regard to witness evidence in the form of witness statements, in order to comply with social distancing rules, parties will have to prepare witness statements reliant on calls or Skype/Zoom video conferencing in place of face-to-face meetings. Individuals may be unavailable due to several reasons included but not limited to: self-isolation, hospitalisation, individuals who have travelled abroad and now unable to return to the UK, or unavailable due to looking after dependants such as elderly relatives or children.

In bringing or defending an adjudication parties should be conscious of adjudicators’ decisions being more susceptible to challenge. More challenges are likely to be brought for breaches of the natural justice rules particularly in the context of there being insufficient time to file submissions in adjudications as a consequence of the forced restrictions, having to work at home and non-access to relevant documentation.

While Coronavirus may be unprecedented, it is critical that parties continue to operate in accordance and comply with their contractual obligations. Adjudicators will no doubt be sensitive to the parties’ new working arrangements; however, ultimately all will be mindful that adjudication by its design is a quick form of construction dispute resolution.

To discuss any of the issues raised in this blog, please contact Nik Haria or Brenna Baye from our Construction team.

For our updates on the legal implications relating to the Coronavirus (Covid-19), please see here.

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