With the implementation of the Prompt Payment Regulation and Adjudication Standard for construction contracts imminent, multidisciplinary consulting firm MDA Consulting laments the lack of adjudicators in the industry to deal with disputes.
“The proposed regulations require that all disputes arising from a construction contract be referred to an adjudicator to decide such disputes. Currently, there are not enough adjudicators and the only course that offers training for adjudicators is being presented at the University of Pretoria (UP), in collaboration with MDA Consulting,” says MDA Consulting director Euan Massey.
MDA Consulting and UP started offering the one-year Certificate Programme in Construction Adjudication in 2012. Two modules are offered when the course
starts – a law module for nonlawyers, and an engineering and basic construction methodology module for lawyers.
“We divide the class into two groups, with each group having to work through its respective module that aligns them with either the engineering or legal side of adjudication. “The modules prepare them for the overall course and once the groups have completed their first module, they combine as a class again to do the balance of the modules that deal with topics like construction contract law and dispute resolution. We also focus on construction adjudication and the applicable procedures,” he explains.
Massey mentions that the pass rate for the course exceeds 80% and that MDA Consulting is not currently planning on expanding the course to other universities across South Africa.
“We have been training adjudicators for the past four years using this course, with between 20 and 35 people a year enrolled for the course,” he points out.
Meanwhile, Massey says adjudication is a specialised dispute resolution process designed to resolve disputes in the construction industry between employers, contractors and subcontractors. The majority of disputes in the construction industry fall within a range of R100 000 to R5-million and require a quick, inexpensive process to deal with them. “Adjudication is a good fit for these disputes.”
“The prompt payment regulations will introduce a mandatory requirement that all disputes be referred to adjudication, which is a private process during which the parties approach the adjudicator, who facilitates the settling of the dispute,” he elaborates.
Whereas current construction contracts provide for the adjudication process to be completed within about three months, the new regulations will require that a dispute be resolved in between four to six weeks, Massey adds.
He points out that adjudication is a quick way of resolving disputes. The traditional method of resolving disputes in the construction industry is by way of litigation or arbitration. For complicated disputes, Massey states that these methods only become viable when the quantum of the dispute exceeds R30-million.