When faced with an imminent adjudication we tend to pick up the contract terms and often wish we had put more thought into clauses which are pivotal in the adjudication process. There are some key clauses to include in your contract which will determine both the type of adjudication and tactical advantages.
The first clause to consider is the payment clause. If you are a subcontractor or contractor and you want to bring an adjudication based on the simple principle that because no withholding notice was issued, the employer must pay the amount certified, there are some key amendments which must be made to the standard forms to achieve this. For example the JCT must be amended to deal with the situation where no certificate of payment or payment notice is issued, otherwise the employer will be in a better position than if they issues no payment notice at all! If you are an employer and you want to avoid being caught by the technical oversight of failing to issue a withholding notice, then you need to amend the contract so that it says that even if no withholding notice is issued, what is due under the contract is not evidenced by the payment notice but is established under the normal mechanisms of the contract. This will avoid the contractor being able to claim the sum certified without having to prove that the actual value of works being claimed was properly carried out.
The choice of nominating body is also an interesting issue. There is a practice which can occur where the referring party writes to the nominating body asking for a particular adjudicator to be appointed. The responding party will not receive a copy of the application to the nominating body and so will not get an opportunity to object until it may be too late and the adjudicator is appointed. The different nominating bodies have different polices on this practice but the law is clear: unilateral representations to a nominating body regarding the identity of the adjudicator and subsequent nominations are acceptable. Some nominating bodies will not appoint the requested adjudicator if the responding party objects to his/ her appointment. Other nominating bodies have no problem with appointing a particular adjudicator at the request of the referring party and if the responding party objects, it will only be successful in preventing the appointment if it can provide valid reasons for the objection, which will be limited to cases such as a conflict of interest or incompetence. It is worth considering these issues because the identity of an adjudicator is arguably one of the most important factors in any adjudication.
There are many other considerations to take in to account when laying the foundations for adjudication in your contract such as making sure that the timetable suits you. When drafting any provisions one always needs to check that the adjudication clause does not offend Section 108 of the Housing Grants Construction and Regeneration Act 1996 because if it does, your entire adjudication clause will be replaced by the Scheme for Construction Contracts (England and Wales) Regulations 1998. We would therefore advise that before entering into a contract, you take time to lay the foundations for any adjudication. Hopefully you never have to rely on the amended clauses, but if you do, you will be very pleased that you took the time to pave the way for a successful adjudication procedure which puts you in the best position possible to make or defend a claim.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.