Len Bunton, Owner of Bunton Consulting Partnership and the President of Conflict Avoidance Coalition, shared with us a day in his life when supporting an FIS member through proper adjudication preparation, leading to a successful resolution.

Len explained that he received a telephone call from an FIS member asking him to arrange a meeting, as they wanted to commence adjudication proceedings against a client regarding issues with their Final Account. They said they wanted to start this in short order to ambush the other side. He arranged a face-to-face meeting, and the discussion went as follows:

Member: “Can you get the Notice of Adjudication submitted within the next couple of days?”

Len: “That is not the way to do it. The first thing you need to do is get your Referral documents in order, essentially to have them more or less completed before we do anything. I need to meet with the Commercial Managers on the project and the Contract Managers to discuss the issues and understand the background.”

Member: “That is a problem because the Contracts Manager is on holiday, and the Commercial Manager who was involved in the project left two weeks ago.”

Len: “Is there anybody else who can step into the Commercial Manager’s shoes?”

Member: “No, he did the work on his own.”

Len: “Is it possible for us to contact him and recover his electronic records?”

Member: “I doubt it, because the Quantity Surveyor left under a bit of a cloud when we had to make him redundant and he was not best pleased, and it appears all the electronic records have been deleted from his laptop.”

Len: “Have you checked if they can be found on the server?”

Member: “Not yet.”

Len: “Where are all the contract documents, drawings, site minutes, record photographs, programs, and all other records required for the project?”

Member: “I don’t know, so we will just have to manage as best we can.”

Len explained that, at this time, he decided to provide the member with a brief overview of some of the issues arising in adjudication based on his experience. He emphasised a phrase he often uses in his workshops: “Fail to prepare, then prepare to fail.”

Len: “There is no point in going into adjudication with a half-baked plan. You will have to rely on my experience to determine when we are ready to proceed, and then we will have to appoint and adjudicator.  It will probably take the adjudicator about a week to decide whether the challenge has any merit, and they are unlikely to require the response to be submitted until that issue is resolved.  Then, no doubt the other side will will adopt whatever delay tactics they can.

“It is very common nowadays for the other party in an adjudication to begin with a jurisdictional challenge in order to delay the process.. Lastly, if we do not prepare this properly and we lose, you will have my costs to pay, and the adjudicator is likely to apportion the fees. If we are completely unsuccessful, you will be responsible for the full amount, which could be up to £15,000.”

Member: “I don’t care about all of that, Len. I just want you to get on with it.”

Len: “I have something else to tell you: even if we are successful, the other side is likely to disagree with the Adjudicator’s decision, and their lawyers will probably advise them that it is a load of rubbish and that they should not pay the amount of money you are claiming is due.”

Member: “Why would they do that”

Len: “Because this is what happens in the current market.”

Member: “What do we do then?”

Len: “We need to commence enforcement action in the courts, which means engaging a lawyer and Counsel. In my opinion, it could take a couple of months before the case is heard, and then another few weeks to obtain a judgment. Again, if you are unsuccessful, you will be fully liable for both your own costs and the other side’s costs.”

Len explained that, at this moment, the member threw his coffee across the room.

Member: “This sounds like a complete waste of time. I thought adjudication was meant to help with payment and cash flow issues, but this could potentially put us right out of business. It is causing all sorts of mental stress for me and others in the business, and is also impacting our family life.”

Len: “Okay, here’s what I’m going to do. I will spend a day in the office with whoever has been involved in this project to get up to speed on the issues. I will then contact the Managing Director of the client’s organisation to request a without-prejudice meeting and suggest that we work together to try to reach a resolution on all of the above, as this is in no one’s interest. I will highlight the long-standing relationship you have had with the employer and your desire to continue working with them in the future. I will also point out that both sides can learn a lot from what happened on this project, and we can hold some workshops before another project goes on site to ensure that similar issues do not occur again.

“If they are not agreeable to that, then I will suggest using the Conflict Avoidance Process, where we bring in a completely independent person to provide non-binding recommendations on all of the issues. We can then see if a resolution can be reached, and this process has worked very well in the past.

“I did speak to you some time ago about signing the Conflict Avoidance Pledge, and you have not done so. I want you to undertake to sign it today. Moving forward, for future contracts, we will encourage the client body to have conflict avoidance provisions embedded into the contract, we will encourage clients to sign the Pledge, and we will also hold a workshop for all of your subcontractors to get them to do the same.”

Member: “I am already feeling better now that we have a plan in place. Do you think you can deliver?”

Len: “I am not a miracle worker, nor am I Harry Houdini. Rest assured, I will give 100% of my experience to try to resolve this matter as quickly and as painlessly as possible.

“So, I am going to come tomorrow with one of my colleagues, and I want you to make available anyone and everyone who has been involved in this project. By the end of 12 hours, we will be further along than we are at the present moment, and we can then discuss engaging with the client side.

“However, this should serve as a salutary lesson to ensure that you maintain excellent records on projects, archive them in a safe place, protect all electronic communications, and, when people leave the organisation, even if the parting has been amicable, see if they might be willing to assist you in the future.

“You can’t afford to get into this position again, because it only takes two or three financial hiccups at the end of the month to put the business under water. What I intend to do, once we get through this, is to hold an internal workshop and take your colleagues through the Best Practice Guide, which provides simple recommendations to improve the way you manage the commercial aspects of your projects.”

I am delighted to say that, by taking the above course of action together, we were able to resolve the matter. A key takeaway is: “Fail to prepare, then prepare to fail.”

If you are experiencing similar challenges, require support and guidance, or want to find out more about the Conflict Avoidance Coalition and the Pledge, please contact Len via email len@buntonconsulting.co.uk or call 07769 670089

 

Legacy: How to react if you are contacted about a legacy claim

Where completed work has been identified as being potentially non-compliant by a client, contractor or by a third-party inspector, there are steps that you should take. Starting to gather evidence in a structured way can help bring speedy resolution and put you in the strongest position to defend yourself if required.

With the support of Len, FIS has developed guidance to understand if and how you should respond. Download your copy here.