Sharp rise in SA construction adjudications

by Madelein
Sharp rise in SA construction adjudications

There has been an increase of 65% in the number of adjudications in the South African construction industry in 2017 compared to 2016, which indicates the sector’s preference to embrace adjudication as an efficient way to resolve disputes. This is the finding of the third annual Adjudication Survey by construction and technology law firm, MDA Attorneys.

Euan Massey, MDA Director, says that the results provide some anecdotal statistical insight regarding the use of adjudication in the local market.

“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 criticise 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 Euan.

The survey results also revealed that adjudicator performance is improving and that there is a growing trend towards conducting a hearing as part of the adjudication process.

“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,” says Euan.

“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 will lose its attraction as a way to deal with disputes swiftly and at lower cost,” concludes Euan.

For more information, contact MDA Construction & Technology Attorneys on +27 (31) 764 0811 or via www.mdalaw.co.za.

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