In the previous article published as part of this series, we set out the governing processes and common pitfalls which can befall parties during the commencement of an adjudication.
In this article we turn our attention to the responding party’s Response, and the further written submissions which are frequently made before the adjudicator reaches their decision.
The Response is a very important document, in that it may well be the first opportunity for the responding party to set out its position in full. It is certainly essential in terms of the adjudication – up until now the adjudicator has only been hearing the referring party’s case, and the Response is the responding party’s opportunity to set out their side of the story. Upon receipt of the Referral, the responding party may only have seven days to prepare and issue their Response, although it may be possible to persuade the adjudicator to extend that time period if there are extenuating circumstances.
Nevertheless, time will be very short. Unless an extension of time is agreed, an adjudication must be completed within 28 days of the date of the Referral. The responding party is at a disadvantage because the referring party can take as long as it likes getting ready for the adjudication and preparing its submissions, whereas the responding party has to work to a very tight timetable, and indeed may not have been expecting an adjudication to take place at all. However, if the responding party thinks an adjudication is likely and has some idea of the sorts of arguments that may be raised, it might be able to do some preparation before the adjudication is commenced, potentially even preparing a ‘shadow response’ which can then be adapted and finalised once the responding party sees the Referral.
The Response is the main document in which the responding party sets out its defence to the claims made against it, and also details any counterclaims it wants to make. It is therefore important that it sets out in detail the basis for refuting the claims, together with as much substantiation as possible. However, it should also be persuasive, and tell the story of what has happened from the responding party’s perspective. Ideally, therefore, the Response should:
- Fully respond to the factual and legal basis for the referring party’s case;
- Refer to relevant contractual provisions;
- Explain the basis on which the claim is being refuted;
- Contain a detailed response to the redress sought by the referring party; and
- Provide details of any counterclaims being made, together with supporting arguments and evidence and substantiation for these.
In terms of content, the responding party is entitled to raise any points in its defence which – in law or fact – act as a defence to the claim made by the referring party, regardless whether or not those points have been raised in previous correspondence or discussions prior to the adjudication.
As noted above, it is also important to deal with the redress the referring party is seeking. For example, if the referring party is a contractor who is seeking loss and expense, the responding party may well set out in the Response why the contractor is not entitled to loss and expense, but may also include a section which explains why, even if there was an entitlement, the sum claimed is excessive.
When making crossclaims or counterclaims in the Response, the responding party should make sure that they fall within the scope of the dispute referred to the adjudicator (rather than being a completely separate, unconnected dispute). Similarly, any such claims must allow the referring party sufficient opportunity to consider and make representations on those claims, and so an adjudicator is unlikely to have jurisdiction if the counterclaims are only raised for the first time in the adjudication.
The Reply and Further Submissions
- Most formal contractual adjudication rules (including those in the Scheme for Construction Contracts) do not specify that further submissions shall be made beyond the Response, and therefore it is up to the adjudicator to decide how they want the adjudication to proceed and what further submissions they will permit.
- However, the rules of natural justice require that each party is given the opportunity to answer the case put against it, and as such the adjudicator will normally allow the referring party the chance to make a further submission, called the Reply. They may then grant permission to the responding party to issue a Rejoinder to that Reply. Indeed, further submissions may follow those. However, each new submission will inevitably have shorter and shorter periods allowed for them, and there can be diminishing returns, as parties start to repeat points they have made previously.
- Case law  indicates that where a party has not sought permission to make further submissions, they cannot subsequently (in enforcement proceedings) argue that the adjudicator’s failure to provide such an opportunity amounted to a breach of natural justice.
- The Scheme for Construction Contracts requires the adjudicator to consider any relevant information submitted to them, and so they will be reluctant to refuse to allow parties to make further submissions if they wish to do so. However, they are likely to strictly limit the scope for further submissions, and there will inevitably come a point when everyone runs out of time, or new things to say, and the submissions stop so that the adjudicator can make a decision within the time allowed by the adjudication rules.
Next time on Adjudication 101
The next instalment of our Adjudication 101 series and the second part of this article will consider the role of the Adjudicator, including their duties and powers, directions, meetings, hearings and evidence.