Responding to the Adjudication Claim

A respondent and any owner who is a party to the adjudication proceedings may serve on the adjudicator a written response to the adjudication claim within five working days after receiving the claim or the adjudicator’s notice of acceptance (whichever is the later), or within any further time that the parties to the adjudication agree, or within any further time that the adjudicator allows if the adjudicator considers that, in the circumstances, the additional time is reasonably required to allow the respondent to complete the written response (s37).

A respondent or owner must serve any response on the claimant and every other party to the adjudication either before, or immediately after serving the response on the adjudicator.

Time limits for actions by the parties and the adjudicator under the Act are short and strict. Compliance with the time limit for serving a response is absolutely critical because, under section 46(1)(b) of the Act, in making a determination an adjudicator is prohibited from taking into account any response unless it was served in time.

The presumption is against an extension of time being granted by an adjudicator. The time limit of five working days for serving a response to an adjudication claim is deliberately short (this on the basis that the respondent should know why it has refused to pay or grant whatever is being sought by the claimant and simply needs to submit its case) and a respondent would need to advance a compelling argument in support of any application for an extension of time.

If a respondent or owner wishes to seek an extension of time to the period within which to serve a response to the adjudication claim, the application for an extension of time must be made before the expiry of the default five working day period within which a respondent or owner is entitled to serve a response to the claim. Out of an abundance of caution, an application to extend time should be made to the adjudicator, with a copy to every other party, at the earliest possible time after receipt of the claim.

The courts have made it clear that it is open to a respondent to raise any ground in its response which would amount in law or in fact to an arguable defence of the claim whether propounded before the adjudication or not.

As with the adjudication claim, the written response may be accompanied by any other documents, evidence, authorities and other material that the respondent wishes to rely upon in support of its response to the claim.

The adjudication response is not an opportunity for the respondent to make a counterclaim. A respondent may claim set-off or abatement in the written response to the extent of extinguishing the adjudication claim, but if the respondent believes it is entitled to be paid any money by the claimant, then the respondent must file its own adjudication claim to recover those monies.

Set-off is an independent cross claim that the respondent is entitled to bring which cancels out the claimant’s claim in whole or in part. A set-off may arise as a result of an express contractual entitlement (ie liquidated damages for delay) or as a result of the common law right to equitable set-off where the subject cross claim is so closely connected with the claimant’s claim that it would be manifestly unjust to allow the claimant’s claim for payment without taking into account the cross-claim.

Abatement on the other hand is a reduction from the amount claimed resulting from breach of contract which reduces the value of the work carried out for defective or incomplete work.

BDT will always endeavour to appoint the same adjudicator to deal with claims between the same parties under the same contract.

If two or more adjudication proceedings are pending, an adjudicator may, with the written consent of all of the parties to those adjudication proceedings, consolidate the proceedings and determine the adjudication claims at the same time.

Inevitably what happens in practice is that the parties agree that claim and counterclaim should be determined concurrently and that the submissions and evidence in respect of each adjudication may be read together for the purposes of both. It should be stressed however, that even in those circumstances where some procedural creativity is often required, strict compliance with the time limits in sections 36 and 37 of the Act is essential.
 

An Authorised Nominating Authority
under section 65 of the Construction Contracts Act 2002