Page 15 - DCOM207_LABOUR_LAWS

Labour Laws

Notes The referral notice

The referral notice must be served within seven days of service of the Notice of Adjudication.
This is the document that sets out in detail the case of the party who is referring the dispute to
adjudication and it should be accompanied by documentation in support of the claim together
with expert reports (if any) and witness statements. It is important to ensure that the referring
party is in a position to serve this notice - there have been instances where the ANB has appointed
an adjudicator 24 hours before the seven-day period expires, in which case the adjudicator will
need the notice within a day. A copy should be sent to the other party at the same time.

Timetable involved

The Construction Act sets out a tight timetable of within 28 days of service of the referral notice
for submission of a response and for the adjudicator’s ultimate decision. However this may be
extended with the consent of the adjudicator. The rationale behind the process was to obtain
quick and cost effective results which are of a binding nature unless reviewed by litigation or
arbitration. This relies on timescales being tight.

Responding party’s response

This is essentially the other party’s defence, and is required to be served within seven days of the
Referral Notice. Requests for this to be extended to 14 days are usually agreed. The HGCRA does
not demand a response or further submissions - the need for one is a matter for the adjudicator.
The decision

The adjudicator is required to reach his decision within 28 days of service of the referral notice.
This period can be extended by a further 14 days if the party who referred the dispute in the first
place agrees, or can be further extended if both parties agree.

The decision is final and binding, providing it is not challenged by subsequent arbitration or
litigation. The parties are obliged to comply with the decision of the adjudicator, even if they
intend to pursue court or arbitration proceedings. In the majority of adjudicators’ decisions the
parties accept the decision, however if they choose to pursue subsequent proceedings the dispute
will be heard afresh - not as an ‘appeal’ of the adjudicator’s findings. A party cannot adjudicate
the same issue in further adjudication proceedings.

Costs

The Construction Act makes no mention of how costs should be dealt with. However changes to
the Act which come into force on 1 October 2011 provide that any contractual provision which
attempts to allocate the costs of adjudication between the parties will be invalid unless it is made
after the adjudicator is appointed. This applies to agreements both as to the allocation of the
adjudicator’s fees and expenses and agreements as to who is to bear the parties’ own costs. This
provision seeks to prevent parties agreeing contractual terms which place all the costs risk on
one party.

Adjudicator’s fees and expenses

The parties will be jointly and severally liable to pay the adjudicator a reasonable amount in
respect of fees for work reasonably undertaken and expenses reasonably incurred by him. This
means that both parties can be pursued for these fees, or that either party may be pursued for the
whole amount. The adjudicator may decide himself what sum is reasonable but, if there is any
dispute, an application can be made to the court for determination. This provision applies only

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