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I’ve Got a Construction Dispute; Well I Think I Have!

The Construction Act states that a party to a construction contract may refer a dispute arising under the contract to Adjudication. Ok, we all know that Adjudicators can only look at disputes, but exactly what constitutes a dispute that you can slap in front of them?

In simple terms, a dispute arises once the claim or issue has been brought to the attention of the other party and he has had a chance to admit, modify or reject the claim – then you have a dispute that you can take off to Adjudication.

Clearly, it’s important to get this right, as if you push the button too early and start adjudication, then the other party will almost inevitably argue lack of jurisdiction to either prevent the adjudication commencing or to resist enforcement of the decision, and you will get nowhere.

To be blunt, no dispute = no chance of success within adjudication. Ok, maybe I am not telling you anything new, but exactly what does constitute a dispute?

Here’s a few practical tips / things to look out for:

• First off, you must make a claim; this does not mean that formal claim documents need to be submitted by a claims consultant (ideally us!) for example, but it does mean that you have had to make an assertion of a position and have communicated this to the other side – its not good enough to say, “We knew he would have rejected it, so we went straight to adjudication.”

• Your claim ideally needs to be in the written form, clearly setting out the factual and contractual basis of your position and the relief sought. The claim at this stage does not have to be detailed fully, but does have to provide enough information and evidence to the defendant to understand the nature of the allegations against him and the relief sought by you, whether that be time and/or money.

• If your claim is so useless that he can’t understand it, this may not be a claim capable of being crystallized into a dispute. So to be safe, write it down, detail it and communicate it to the other side.

Let’s not get carried away though. Just because you have a claim this does not mean that you have a dispute! This depends on what happens next and the nature of the response to your claim that you receive.

If he writes back and rejects your claim in its entirety then, it is likely you have a dispute. If he is silent and does not respond then after a period, it is likely that this silence will be taken as an inference that your claim is rejected. If the other side requests further and better particulars from you, then once you have provided this information a dispute may well crystallize in much the same way as mentioned previously.

Each case will turn on the facts, but it must be clear that a claim has been made and communicated to the other side and the process of discussion and negation has ended without agreement. The key point at which to assess the existence of a dispute or not is when you are about to start adjudication. If the above is satisfied, then you have a dispute and you can call on an adjudicator.

Oh, one final point, please make sure that your Notice of Adjudication refers to the same dispute that is crystallized! But that’s one for another day.

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