The Adjudicator under NEC 2nd Edition: a new approach to disputes

Abstract

Disputes under the New Engineering Contract (NEC) 2nd Edition involve a new approach to the role of Adjudicator. Clauses 90–93 have been radically revised. They reflect the recommendations of Latham's Report Constructing the Team, and growing international practice (e.g. the Channel Tunnel Disputes Panel). Also clarified are some questions over the 1 st Edition. The independent Adjudicator provides a mandatory third‐party neutral settlement process. The decision is final and binding, unless and until revised by the eventual tribunal (court or arbitration) after completion of the works, or termination. Legal drafting is achieved in the NEC style of plain English and present tense. Latham's objectives are reminiscent of traditional decisions of an independent Engineer, or of modern short form arbitration; but the new substantive approach is distinguished from both. The Adjudicator's decision determines the parties' rights and obligations. It does not depend on the Project Manager's implementation, but the latter is free to choose in accordance with the decision, e.g. by changing the Works Information as a compensation event. Distinctive of the NEC is the openness of procedure for the Adjudicator, and even‐handedness between the parties as to the continuing works while the Adjudicator is acting. The parties, by contract, given the independent Adjudicator jurisdiction to settle by its decision all disputes arising under or in connection with the contract. This is neither expert determination nor arbitration. The Adjudicator is to act fairly, not judicially. Some jurisdictional issues may remain, and are explored. There must be a proper substantive characterization of the new role, according to its true context and the parties' expressed intentions. NEC 2nd edition has clarified and enhanced the definition of the first third‐party stage fully to meet Latham's objectives, and to encourage by rapid but effective early resolution of disputes, within the overall NEC philosophy, a substantial reduction in the incidence of disputes.