MDA Law
South Africa won’t meet the demand for adjudicators in the construction sector
23 February 2016
Statutory adjudication will be introduced shortly to South Africa but there are insufficient adjudicators to meet the anticipated demand. The cidb Prompt Payment Regulations and Adjudication Standard is a framework within which parties to a construction contract are given the right to refer disputes to adjudication. Expected to be implemented within the first quarter of this year, the regulations will introduce a mandatory statutory form of adjudication as a fair, rapid and inexpensive mechanism for resolving disputes in both the public and private sectors to increase cash flow in the construction industry.
The regulations are presently being reviewed by the Department of Public Works and Treasury for conflict with existing legislation.
Euan Massey, director at MDA Attorneys believes South Africa is extremely short on adjudicators. “We expect a dramatic increase in the number of adjudications, which will require an increased number of adjudicators, practitioners and adjudicator nominating bodies. We anticipate that at least 100 competent adjudicators will be required in the short term. The South African Institution of Civil Engineers (SAICE) panel of adjudicators comprises only 21 and the ICE-SA (a joint division of the Institution of Civil Engineers and the South African Institution of Civil Engineering) panel lists 11 adjudicators. They have a broad range of qualifications and experience from senior counsel to members with no experience in dispute resolution. As a number of the adjudicators are also practitioners it is also common to find that most of the adjudicators are either too busy or conflicted.”
Massey says that the effectiveness of adjudication will be hampered by a shortage of adjudicators. “Our concern is that if disputing parties are subjected to a poorly administered adjudication, the process may lose appeal and parties will amend contracts to exclude it.”
Enforcement of the adjudicator’s decision is also critical to the success of the prompt payment regulations. “For several years, South African courts have supported the adjudication procedure by implementing a robust approach in enforcing adjudicators’ decisions repeatedly; by determining that adjudicators’ decisions are enforceable as a matter of contractual obligation and by acknowledging that furnishing notice of dissatisfaction does not prevent enforcement. Parties are required to comply with and promptly implement the adjudicator’s decision,” he says.
The shortage underscores the need for adjudicator training. A one-year certificate programme which trains prospective adjudicators was introduced by the University of Pretoria in partnership with MDA Consulting and is now in its fourth year. To date, it has produced approximately 70 qualified adjudicators for the construction industry.
Although there are other introductory programmes available, this is the only comprehensive programme that aims to train adjudicators and practitioners.
To further develop adjudication skills, the Construction Adjudication Association of South Africa (CAASA) provides a platform for discussing adjudication issues within the SA construction industry.
Says Massey, “These two initiatives will go some way to growing the number of qualified adjudicators and bringing this community together. MDA Consulting believes that statutory adjudication will promote the regular training and development of adjudicators and practitioners. The end result will be an efficient system of adjudication which should improve contractor and subcontractor cash flows – which in turn enables the growth and development of the South African construction industry.”
A video of Euan Massey discussing this topic is available here.
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