Thursday, 10 May 2018 13:14

MDA Adjudication Survey indicates a surge in construction adjudications

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Construction and technology law firm and construction adjudication experts MDA Attorneys has reported an increase of 65% in the number of adjudications in the South Africa construction industry in 2017 compared to the previous year.

Euan_Massey_director_at_MDA_Consulting

This clearly indicates the industry’s preference to embrace adjudication as an efficient way to resolve disputes, with decisions being accepted by a significant majority of the parties as final and binding.

MDA released the findings of its third annual Adjudication Survey last month– the only survey of its kind in SA. Euan Massey, MDA Director, says that the results provide some anecdotal statistical insight regarding the use of adjudication in local industry.

“The perception of the efficacy of adjudication in resolving disputes is growing, judging by the fact that in 73% of the adjudications, there was no notice of dissatisfaction issued (this means that that the decisions were accepted as final and binding). Of the remaining 27% only a few of these disputes were referred to arbitration. Many construction law practitioners criticize adjudication and advise their clients to bypass it and head directly into arbitration, but these percentages indicate that adjudication remains an effective and economical form of dispute resolution,” says Massey.

The MDA Adjudication Survey reveals that there is a growing trend to conduct a hearing as part of the adjudication procedure.  “The upward trend in hearings is interesting and could be cause for concern. Typically the purpose of hearings is for the adjudicator to raise questions and for the parties to make submissions. However, there are instances where  hearings are  used for the leading of evidence and there is a risk that adjudication hearings could morph into a form of mini-arbitration. If this happens, adjudication loses its attraction as a way to deal with disputes swiftly and at lower cost,” explains Massey.

Adjudicator performance is improving. “This year, we found that 92% of decisions were issued on time – a significant increase from 78% the previous year. Contractors are proving more successful than employers in disputes with 55% of decisions in favour of contractors,” he says.

The Adjudication Survey canvasses MDA clients and surveys various trends in adjudications each year. Hourly rates of adjudicators range from R1350 to R4000, with legally qualified adjudicators at the top end of the scale. “We find that in situations where the parties agree to the identity of the adjudicator, they tend to prefer a legally or dual qualified adjudicator,” says Massey.
Last modified on Thursday, 10 May 2018 13:25

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