Adjudication took over from arbitration as the favoured form of dispute
resolution because it was quicker. But fast-track arbitration could have the
last laugh, writes Daniel Atkinson.
THE IDEA of adjudication is to achieve the quick and efficient resolution
to a dispute. Most of the time it does this pretty effectively: many
adjudicators' decisions are accepted as the last word on a dispute and no
further steps are taken.
However, it is now well established that an adjudicator's decision only
has a provisional effect.
And although the Construction Act states that the parties can agree to
accept an adjudicator's decision as final, this is rarely adopted in
Hence the decision can always be challenged in court.
Before the introduction of adjudication in 1998, the construction
industry's favoured means of dispute resolution was arbitration, a process
which still has many advantages over adjudication. The main benefit of
arbitration is that it produces an award which has a high degree of finality
- there is limited recourse to the courts from an arbitrator's award.
The second important benefit is that the process of arbitration allows
the full case to be developed, analysed and presented. It does not suffer
from the problems of the 28-day timescale imposed upon the adjudication
Another benefit of arbitration is that the winning party is able to
recover its costs from the losing side; in adjudication it is not.
There are, of course, disadvantages to arbitration, the main one being
the cost involved. This is mainly due to the time that the process can take
if, as usually happens, it mimics court proceedings too closely.
But it appears that cost is becoming less of a disadvantage in
arbitration as trends in adjudication seem to show an increase in costs.
In recent adjudication cases with which I have been involved, the parties
were represented by counsel on both sides and one-day hearings were held
with full transcript plus cross-examination of witnesses and experts. The
process was difficult to distinguish from arbitration. Moreover, although
adjudication's 28-day rule is still beyond the reach of the arbitration
process, fast-track arbitration can produce decisions far quicker than the
Since it is up to the parties to agree the rules of arbitration within
the confines of the Arbitration Act 1996, it is quite possible for them to
adopt their own fast-track procedure. They should therefore be able to enjoy
the best of both worlds, achieving the thoroughness and finality of the
arbitration process with many of the advantages that accrue from the rapid
procedure seen in adjudication.
There is a lot that can be learned from the experience of adjudication
that could easily be applied to today's arbitrations. Fast-track
arbitrations have been successful in the past: the JCT Arbitration Rules
1988 successfully provided such a procedure (though not encouraged by
lawyers since they were too far removed from the familiar court
The 1988 JCT rules provided a 'full procedure' in which the arbitrator
would make his decision in about 200 days. Now, with the experience gained
from adjudication this could easily be reduced to 150 days without affecting
the quality of the process.
The success of arbitrations under the JCT Rules was built on two pillars.
The first was a rule which required the parties to submit 'statements of
Such statements are more extensive than the documents normally prepared
for court proceedings and more informative. They set out the propositions of
law with supporting arguments and they clearly set out the contentions of
The statement of case had to include a list of all documents that the
party considered necessary to support any part of the relevant statement and
a copy of the principal documents on which its case would rely. In each
document the relevant passages had to be clearly identified.
In practice this meant that a party was required to state the legal
principles on which it relied, supply copies of the relevant legal
authorities, state the facts to support its contentions and provide all the
documents on which it relied, including witness statements.
The discipline required to prepare a statement of case in the fast-track
timescales ensured that the parties focused on the issues between them and
allowed the arbitrator to do so too at an early stage in the process.
This is precisely what the 28-day period in adjudication aims to achieve.
The second pillar of success of the JCT Rules was the power of the
arbitrator to proceed without submissions if the timetable were not
If a party did not serve a statement of case (which includes a statement
of defence) within the relevant time the arbitrator issued a seven-day
warning. If within seven days of the notification the relevant statement was
not received the arbitrator was entitled to proceed without the statement.
If the relevant statement was subsequently served it was to have no
effect. (The only proviso was if the arbitrator was satisfied that there was
a good and proper reason why an application was not made for an extension of
the time for service as required by the rules and why the statement was not
served within seven days of his notice).
If it was the claimant that had not served its statement of case, the
arbitrator was required to make an award dismissing the claim and ordering
the claimant to pay his fees and the other party's costs.
To my mind it is clearly time for the lessons of adjudication to be
incorporated in the rules normally adopted in arbitration and published by
the various institutions.
But there is no reason why the parties should not agree their own
fast-track procedure at contract formation. The JCT Rules 1988 provide a
useful model which, with modification, could lead to 150-day arbitrations.
Arbitration, unlike adjudication, results in a decision that has a high
degree of finality.
The winning party in arbitration can recover its costs whereas in
adjudication it cannot.
The JCT Rules 1988 introduced procedures for 'fast-track' arbitrations.
These required the submission of 'statements of case' and permitted the
arbitrator to proceed if either party failed to submit its statement.
The lessons learned through adjudication could help in the development of
even faster arbitration procedures.