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Stabroek News

Adjudication vs litigation in contracts
published: Friday | April 7, 2006

Robert F. Evans P.E., Contributor


EVANS

THE CHART shows the lengthy, tortuous and discouraging pathway that a litigant must endure when he/she petitions the legal system for justice.

The unfortunate truth is that all parties who enter this maze are in for a long haul and it becomes a battle of who has the resources to endure - not who is right or who has the best case. When the judgement is finally handed down, from the Privy Council perhaps, a party may have suffered too much - emotionally and physically - to be adequately compensated and justice is effectively denied.

Just imagine. After waiting two years for a first instance trial, perhaps another year for the written judgement, then a year for appeal court, one can be sent back for the matter to be re-tried and start all over again! It could take one four or more years to get nowhere!

Look at it this way. Society takes it for granted that a physician is morally committed and professionally obligated to saving lives and equally assumes, that the judiciary has a similar dedication to dispensing justice. In Jamaica, if medicine operated like the judiciary, all patients seeking medical attention would die from the treatment.

Litigation empowers the party in the wrong. Typically, faced with substantial damages by arbitration or litigation, a disputant reflexively appeals and has the right to demand a hearing in court. The matter can easily span 10 years without payment of one red cent while the party in the right must continue to find funding for the action. Also, no matter how good the case, because of the indeterminate time, few attorneys are willing to accept appointment on the basis of payment out of winnings.

A contract in Jamaica today can therefore be regarded as hardly worth the paper on which it is written. It has to be a very serious matter in terms of money (or egos) to stimulate a complainant to initiate legal action knowing that the wait can be ten years. But all this changes if a properly crafted Adjudication Clause is in the contract and if the contract is to extend over a period of time.

The contract of choice in Jamaica for construction work (called FIDIC), allows fifty-six days after complaint for an Adjudicator, an expert in the field of dispute, to hand down a decision. Thus when a contract is 25% complete or 50% complete or whatever, a quick decision can be sought through Adjudication. The decision, by contract, is binding and must be complied with or the non-compliant party is in fatal breach of the contract. The parties, of course, have the right to appeal through Arbitration or Litigation but only after compliance. It is not usually in the interest of either party to be in fatal breach in the middle of a contract because, either the contractor will have no entitlement to further payment, or the client will have an incomplete job and this is the incentive that makes Adjudication work. This effectively overcomes the empowerment of the wrongdoer because that party must now comply with the ruling and cannot use the Court as a weapon of delay. Effectively, the boot is on the other foot and, this time, the wrongdoer is not the one holding the money!


Mr. Evans, an Engineer, practices Adjudication in the Construction Industry

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