65% increase in number of adjudications in SA construction industry

9 May 2018

According to findings from MDA Attorneys' recently released third annual Adjudication Survey, 2017 saw a 65% increase in the number of adjudications in the South Africa construction industry compared to 2016.

Euan Massey, director, MDA Attorneys

The construction and technology law firm believes that this clearly indicates the industry’s preference to embrace adjudication as an efficient way to resolve disputes, with decisions being accepted by a significant majority of the parties as final and binding.

Euan Massey, MDA director, says that the results provide some anecdotal statistical insight regarding the use of adjudication in local industry.

Adjudication an effective, economical form of dispute resolution

“The perception of the efficacy of adjudication in resolving disputes is growing, judging by the fact that in 73% of the adjudications, there was no notice of dissatisfaction issued (this means that that the decisions were accepted as final and binding). Of the remaining 27%, only a few of these disputes were referred to arbitration. Many construction law practitioners criticise adjudication and advise their clients to bypass it and head directly into arbitration, but these percentages indicate that adjudication remains an effective and economical form of dispute resolution,” says Massey.

The MDA Adjudication Survey reveals that there is a growing trend to conduct a hearing as part of the adjudication procedure. “The upward trend in hearings is interesting and could be cause for concern. Typically, the purpose of hearings is for the adjudicator to raise questions and for the parties to make submissions. However, there are instances where hearings are used for the leading of evidence and there is a risk that adjudication hearings could morph into a form of mini-arbitration. If this happens, adjudication loses its attraction as a way to deal with disputes swiftly and at lower cost,” explains Massey.

Adjudicator performance is improving. “This year, we found that 92% of decisions were issued on time – a significant increase from 78% the previous year. Contractors are proving more successful than employers in disputes with 55% of decisions in favour of contractors,” he says.