Construction AdjudicationAn Effective Means to Resolve Construction Disputes

Dr. Simon CheeDr. Simon CCheeHKCAC Founder and

eed PresidentHKCAC F

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or, Mediator, Adjudicator, Expert Witness, Dispute Resolution AdvisorArbitrattoArbitrattooror rrorMediator, Adjud rooroResolution Advisodicator, Expert Witness,s, Dispute RMediator AdjudidicatoAd or Expert Wor, MMMob : 8101 0111 Email : simonchee@simonchee.com simonchee@hkcac.net

March 17, 2015

Content

1. Purpose of ADR and Construction ADR

2. Adjudication Origin of Adjudication – the UK Housing

Grant, Construction and Regeneration Act, 1996; the

Scheme 1998, 2011

3. Latest Development of Construction ADR in UK,

Internationally, and Hong Kong

The Speaker and HKCAC

Dr. CHEE SimonPresident, HKCACChair, HKCAC Board of PracticeMember of DevB’s Working Group on Security of Payment LegislationMember of CIC Working Group on Construction Dispute ResolutionChairman, HKIA Contract Dispute Resolution Committee (2013-14)Programme Leader of HKCAC Construction Adjudication Qualifying Courses

Publications:HKCAC Construction Adjudication Rules 2013HKCAC Construction Adjudication Rules 2015 (Draft)

The Speaker and HKCAC

HKCAC• Unique Professional Organisation and Service Centre on

Construction Dispute Prevention & Resolution• Co-organisor with Centre of Chinese Law, Faculty of Law of

HKCAC HKU Conference on Construction Dispute Resolution in Hong Kong 2015 with SOJ as Guest of Honour

• Member of CIC Working Group on Construction Dispute Resolution

• Train, Accredit, List and Appoint Construction Arbitrators, Mediators, Adjudicators and Expert Witnesses

• Supported by Industry’s Renowned Individuals and Stakeholders including HKIA, HKIS and HKIE as Honorary Advisors, etc.

• Promote Expedient use of Specialised Dispute Prevention and Resolution Process at ALL levels

The Speaker and HKCAC

HKIS Members now entitles:-• Free 1st year HKCAC Membership • After being HKCAC Member …

• Eligible to enter HKCAC List of Arbitrators, Mediators and Expert Witness

• Free Visit to HKCAC Reference Library• 20% minimum discount on fees to HKCAC Events and Courses, and

others.

• Download Application Form at url belowwww.hkcac.net/HKCAC/caseFiles/Form MA-01HA Membership Application 2014 -Honorary Advisors.pdf

• Or call 2545 1500 for assistance

For Surveyors (10 + 10 = 20 hours)

4 Lectures [CAC 1601] + 4 Workshops [CAC 1602]

HKCAC Construction Adjudication Qualifying Course Outline

Lectures1. Course Outline, Purpose of ADR,

Origin and Development of Adjudication.

2. Adjudication Schemes and Practicing Rules

3. HKCAC Adjudication Framework

4. Construction Adjudication in Action

Workshops1. Commencement of Adjudication

2. Taking of Evidence

3. Procedural Matters

4. Decision Writing

CONSTRUCTION ADJUDICATION QUALIFYING PROGRAMME

The Programme is designed based on the principles and concepts set up by the originator of Adjudication under the UK Housing Grant, Construction and Regeneration Act 1996 and the subsequent Scheme for Construction Contracts (England and Wales) Regulations 1998 / 2011 Amendment (“the Scheme”). PARALLEL STUDIES WILL BE MADE WITH:- 1. the HKSAR Government Construction Adjudication

Rules 2004, 2. the Adjudication Rules proposed in the CIC Refer-

ence Materials for Application of Dispute Resolution in Construction Contract 2013, and

3. the HKCAC Construction Adjudication Rules 2013. OTHER INTERESTED QUALIFIED BUILDING AND LEGAL PROFESSIONALS will be required to take the FULL COURSE, which is comprised of the Bridging Course and the Workshops to gain more practical experience in the dispute resolution process through Workshops. WHY THIS PROGRAMME? 1. To Meet the Imminence of legal adoption of Con-

struction Adjudication (CA) for Construction Dis-putes

2. To Promote Professional Practice of Construction Adjudication based on Party’s Best Benefits for In-terim Settlement of Construction Disputes

3. To Enhance Effective and Efficient Practice of Con-struction Adjudication by Construction Professionals to Resolve Construction Disputes

THE PROGRAMME IS DESIGNED IN DUAL MODE - "FULL COURSE" and "BRIDGING COURSE" for Architects, Engineers, Surveyors and Lawyers. QUALIFIED CONSTRUCTION ARBITRATORS OR EXPERT WITNESSES of HKCAC and its recognised or-ganisations may take the BRIDGING COURSE to get the same qualification. WHO SHOULD APPLY? Bridging Course (CAC 1601):-

- HKCAC Arbitrators / Expert Witnesses - HKIA / HKIS / HKIE Listed Arbitrators - HKIA / HKIS Experts / Expert Witnesses

Full Course (CAC 1602 = 1601 + Additional Workshops): - - Qualified Construction / Legal Professionals

SEE HKCAC LIST OF CONSTRUCTION ADJUDICATORS

Seats to be reserved on a first -come-first-served basis.

Enrollment Form : * please circle Course : CAC 1601/1602* Mem No. / Non-Member

Name (Eng) (Chin) Mobile Fax

I am an Employer / Arbitrator / Mediator / Expert Witness / Dispute Resolution Advisor / Project Manager / Architect / Surveyor / Engineer / Construction Manager / Contracts Manager / Auditor / Solicitor / Barrister / Counsel / Educator / Property Manager / Others (please specify)# [Please attach CV and Relevant Certificates]

Company Position Years of Experience Email

After completion, please fax all documents including bank payment receipt to +852 2545 2500 or email to sec@hkcac.net, and post the payment cheque addressed to “Hong Kong Construction Arbitration Centre, Limited” to HKCAC at 15/F.,

Winner Commercial Centre, 401 Lockhart Road, Causeway Bay, HK. Enquiry or Enrollment, call : +852 25451501 for Kit.

TOPICS COVERED (SEE MORE) (Full Course = Bridging Course CAC 1601 + Workshop)

CAC 1601 : Bridging Course (Theory) – 10 hours 1. Purpose of ADR and Construction ADR, Origin of Adjudication, Latest Development of Construction

ADR in UK, Internationally and Hong Kong 2 Salient Considerations on Security Of Payment Legislation, Construction Industry Council’s Pro-

posed Adjudication Rules 3 Adjudication under the UK 1996 Act and the Scheme 1998/2011 4 The HKCAC Construction Adjudication Rules Workshops – 10 hours 1 Commencement of Adjudication - Contractual, statutory initiation, Preliminary Issues 2 Taking of Evidence - Parties Submissions, Expert Evidence, Site Visit, Inquisitorial Measures, Oral

Hearing 3 Procedural Matters - InterlocutorIES, Defaults and Preemptory Measures, Orders & Directions 4 Decision Writing - Employer / Main Contract; Main Contract / Sub-Contract; Sub-Contract / Sub-

sub-Contract; End-User Contract; Consultancy Contract

COURSE AND ENROLLMENT DETAILS

Code : Bridging Course [CAC1601] Full Course [CAC1602]

Course Length / CPD : 10 hrs / points 20 hrs / points

Dates : 8, 15, 22, 29 May (Fri) CAC 1601 + 5, 12, 19, 26 Jun (Fri)

Course Fee : $7,200 $14,400

Enrollment Deadline : 14 days before course starts

Time: Weekdays - 6:30 - 9:00pm, Weekends - 9:30am - 5:00pm

Language: English with Chinese Supplement

Early Bird Discount: Enroll 28 days before the first day of the course

JOIN as Member

And Start to Enjoy

Member’s Course Fee

Discounts and

Other Benefits

DISCOUNT

HKCAC Member - 20% Group of 3 - 5% Early Bird - 5%

#Diligence - 5%

*Member of HKCAC Honorary Advisors - 20%

#An extra 5% for each achieved

HKCAC course.

PROGRAMME LEADER

Dr. Simon Chee

MAArbDR LLM(Dist) JSD BA(AS) BArch Architect

Authorised Person Arbitrator, Mediator Adjudicator,

Expert Witness Dispute Resolution Advisor

VENUE

HKCAC at 15/F.,

Winner Commercial

Building, 401 Lockhart

Road, Causeway Bay

*HKCAC HONORARY ADVISORS

Hong Kong Institute of Architects Hong Kong Institute of Engineers Hong Kong Institute of Surveyors

HK General Building Contractors’ Ass. HK Construction Sub-Contractors’ Ass. Construction Authorised Signatory Ass.

New World Development, and Chun Wo Construction

Members and Staff Members of the above organisations enjoy 1 year free HKCAC Or-

dinary Membership.

JOIN NOW

And Start to Enjoy HKCAC Member’s Course Fee Discount and Other Benefits

METHOD OF PAYMENT Bank In / Online Bank: DBS A/C no.: 016-494-471209988. Fax the bank payment receipt (counter or internet transfer) to 2545 2500 or email to sec@hkcac.net when register. Cheque: Crossed cheque should be made payable to the “Hong Kong Construction Arbitration Centre, Limited” and mail to : HKCAC, 15/F., Winner Commercial Building, 401 Lockhart Road, Wanchai, Hong Kong. Write down the following information on the back of the cheque : (1) Name of registrant (2) Course Code to be enrolled (3) Contact number and email address

AAlternative to Court Proceeding :Procedurally : Natural Justice, Legal Justice, Heard in Full AGAINST Expedition for Efficacy, Quick Enforcement,

Substantively : Rightfulness and Entitlement Defined AGAINST General Justice, Rough Justice, Fairness than Just

Purpose of ADR and Const. ADR

Wolaver, Earl S. “The Historical Background of Commercial Arbitration” University of Pennsylvania Law Review Vol 83. No. 2 Dec. 1934 p. 132.

Theory and purpose of modern arbitration are “aimed for the provision of trade adjudication based on practical expediency and the ethical or economic norms of some particular groups on disputes particularised to them in pursuance for free decisions … of persons and practicesand not in accord with prescribed rules and doctrines”

PPurpose of ADR and Const. ADR

HK Civil Justice Reform – Interim Report 21 Nov 2001 Section K21.6 “Choosing among and implementing the alternatives” Para. 632

“The interest in making ADR a part of the civiljustice system rests on the potential benefits seen to flow from its use in appropriate cases. It is often said that ADR can be simpler, cheaper and quicker. It can be more flexible and custom-designed for the dispute in question. It can be less antagonistic and less stressful than a court case and so less damaging to a possible on-going relationship between the parties. “

PPurpose of ADR and Const. ADR

HK Civil Justice Reform – Interim Report 21 Nov 2001 Section K21.6 “Choosing among and implementing the alternatives” Para. 675

“… Unless a body of appropriately trained and reliably neutral … ADR practitioners exists, there would be little point in the court contemplating a reference to ADR. The cost of … ADR processes must also be such as to make them a practical option. It must be borne in mind that if the parties attempt ADR unsuccessfully, the cost of that attempt is likely to become a cost additional to their other litigation costs.“

PPurpose of ADR and Const. ADR

Categories of Construction Dispute Resolution• Settlement in the Currency of Contract• Settlement at the End of Contract

QQuestions:-• Finality, Justice, Fairness, Contract Efficacy• What Do the Contractual Parties in dispute WANT?• What should and should NOT be included under the Jurisdiction of

various ADR Processes - Arbitration, Adjudication, Mediation, Expert Determination

• How Staged ADR be better Arranged. FIDIC, HK, UK• To What Extent Should the Statute Comes into Contract.

Purpose of ADR and Const. ADR

• Quick and Fast Determination to Dispute• Rough Justice

QQuestions:-• Reviewability• Adjudicability• Natural Justice• Process Design• Qualification of Construction Adjudicators• Performance Control• Enforcement : Statutory Protection over Party Autonomy

Purpose of Adjudication

Essential Features of Adjudication• A Process only available Under Contract• Statutory by legislation• The Right to Adjudicate• Party autonomy in choice of Adjudicator, Adjudication Procedure,

presentation, procedure and power of the tribunal (through adopting Adjudicating Rules), limited by Statutory Defaults

• Definite Period leading to Adjudication Results• Possible Court Support on Enforcement

PPurpose of Adjudication

Essential Features of Adjudication• Summary process for evidence taking vs consensually agreed

lessened Opportunity to be Fully Heard• Default Arrangement in Appointment and Submissions• Jurisdiction – by Contract and Law : wide or narrow, specific and

controlled• Statutory Intervention• Appeal / Review only after the End of Contract• Adjudicators are required to be Technical Competent toward the

case

PPurpose of Adjudication

� Party Autonomy by Contract : Appointment, Process� Fixed, Short Period to Decision� Flexibility – Time, Place, Summary Process for Taking of

Evidence, No Need for Legal Representation� Adversarial / Inquisitorial� Inexpensive� Interim Binding – Enforceable by Law - Facilitate Cash Flow� Technical Adjudicators� Reviewable, Reviewability

AAdvantages

• Defaults – Legal Protection against Party Autonomy• Too Short – Lack of Response Time of Respondent• Justice Too Rough, Fair Decision (?)• Untried Practice : Time to Ripe• Uninstitutionalised Process• Unprofessionalised and Inexperienced Technical Adjudicators• Unreviewable Decision before End of Contract• Retrial after End of Contract in Full : Double Cost on

Resources vs Interim Determination • Other Limitations

DDis-advantages

11994 Latham Report “Constructing the Team”• Introduces Adjudication as additional ADR

Housing Grants, Construction and Regneration Act 1996 coming into Force on 1 May 1998

• Adjudication becomes statutorily available for parties to resolve “any dispute” arising under the contract at any time with a decision being given within 28 days of appointment.

• Decision is binding until subsequently disputed and resolved by litigation, arbitration or parties’ agreement

Origin

The Act 1996 Part II Construction Contracts “Adjudication” Section 108 “Right to refer disputes to Adjudication”

(1) A party to a construction contract has the right to refer a dispute arising under the contract for adjudication under a procedure complying with this section.For this purpose “dispute” includes any difference.

(2) The contract shall—(a) enable a party to give notice at any time of his intention to

refer a dispute to adjudication;(b) provide a timetable with the object of securing the

appointment of the adjudicator and referral of the dispute to him within 7 days of such notice;

Origin

�The Act 1996 Part II Construction Contracts “Adjudication” Section 108 “Right to refer disputes to Adjudication”

2 (c) require the adjudicator to reach a decision within 28 days of referral or such longer period as is agreed by the parties after the dispute has been referred;

(d) allow the adjudicator to extend the period of 28 days by up to 14 days, with the consent of the party by whom the dispute was referred;

(e) impose a duty on the adjudicator to act impartially; and(f) enable the adjudicator to take the initiative in ascertaining

the facts and the law.

Origin

�The Act 1996 Part II Construction Contracts “Adjudication” Section 108 “Right to refer disputes to Adjudication”

(3) The contract shall provide that the decision of the adjudicator is binding until the dispute is finally determined by legal proceedings, by arbitration (if the contract provides for arbitration or the parties otherwise agree to arbitration) or by agreement.

The parties may agree to accept the decision of the adjudicator as finally determining the dispute.

Origin

�The Act 1996 Part II Construction Contracts “Adjudication” Section 108 “Right to refer disputes to Adjudication”

(4) The contract shall also provide that the adjudicator is not liable for anything done or omitted in the discharge or purported discharge of his functions as adjudicator unless the act or omission is in bad faith, and that any employee or agent of the adjudicator is similarly protected from liability.

(5) If the contract does not comply with the requirements of subsections (1) to (4), the adjudication provisions of the Schemefor Construction Contracts apply.

Origin

By the Act, a Statute, what Adjudication is NOT DESCRIBED except

Jurisdiction – dispute include difference, catch allHow to commence, Notice of RequirementTime Span, ExtensionEffect of the Decision, Review, FinalityAdjudicator’s duty to timely decideAdjudicator’s liability consensually relieved by parties’ agreement Default – the Scheme applies

TThe Rest is for the Market to Self-Develop and Regulate

Origin

In UK – The Act 2009Oral Contract includedAdjudication Provision in Writing, otherwise, tthe SchemeAllocation of Cost – no single party paying all adjudication costs but to

be decided by the AdjudicatorSlip Rule – Adjudication to correct minor mistakes

� UK Court enforces Adjudicator’s decision despite of apparent injustice following the “pay now argue later” philosophy

� UK Court refuses to enforces such decision if there are jurisdictional flaw. However, parties much challenge such flaw at the outset and maintain objection throughout.

LATEST DEVELOPMENT

Internationally, in FIDIC Fédération Internationale Des Ingénieurs-Conseils (International Federation of Consulting Engineers)

Red Book (1999) Permanent DABSilver and Yellow Book (1999) Ad Hoc DABGold Book (2008) Standing DAB (similar to Permanent)Permanent / Standard DAB supports Dispute Avoidance, more

for Design and Build ContractSingle or 3 Adjudicator BoardDecision : 84 days after referralStage ADR Process : DAB -> Mandatory Mediation ->

Arbitration

LATEST DEVELOPMENT

Hong KongHKSAR Govt. Construction Adjudication Rules 2004HKIAC Adjudication Rules 2007 (Non-construction)CIC Reference Materials on for Application of DR in Construction

Contract 2013CIC Working Group on Review of Implementation of DR

Mechanism 2013 in the Reference Materials

DevB Security of Payment Legislation 2013-2016HKCAC Establishment of Construction Adjudication Rules,

Training and Qualifying Course, and List of Construction Adjudicators 2013, Revised 2015

HKIA / HKIS / HKICM Standard Form of Contract updates

LATEST DEVELOPMENT

Hong KongCIC Reference Materials : Task Force on Dispute Resolution

Documentation Chaired by Ms Teresa Cheng in association with DOJ and HKIAC

CIC Working Group on Review of Implementation of DR Mechanism : Chaired by Mr. Cheung Tat Tong with HKCAC, HKIA, HKIS, HKIE, HKCA, HKCSA, HKGBCA, HKFEMC, HKU, HKPU, HKIAC, HA, DevB, HKBA, Hogan Lovells

DevB SOP Legislation : Chaired by DevB with CIC, HA, MTRC, HKIA, AAP, HKIS, HKIE, HKCA, ICES, REDA, HKFEMC, ACE, HKCSA, Pinsent Masons, HKIAC

LATEST DEVELOPMENT

We hope you find the Seminar on Construction Adjudication

Q&A

Thank You

H K C A C H o n g K o n g C o n s t r u c t i o n A r b i t r a t i o n C e n t r e , L i m i t e dA d d r e s s : 1 5 / F . , W i n n e r C o m m e r c i a l B u i l d i n g , 4 0 1 L o c k h a r t R o a d , C a u s e w a y B a y , H K .

T e l e p h o n e : ( 8 5 2 ) 2 5 4 5 1 5 0 1 F a x : ( 8 5 2 ) 2 5 4 5 2 5 0 0 W e b s i t e : w w w . h k c a c . n e t

W e b m a i l : s e c @ h k c a c . n e t M e m b e r s h i p a n d E n q u i r y : s e c @ h k c a c . n e t

本中心為一非牟利機構,致力改善及推動以優良糾紛預防及解決方式改善建築業操作的和諧和成就。HKCAC is a non-profit taking organisation aimed to improve the harmony and achievement for the construction industry, by adopting and promoting quality dispute prevention and r esolution.

Version 3.2 - 1 - Released on 1 May 2014

Address 地址 : 15/F., Winner Commercial Centre, 401 Lockhart Road, Causeway Bay, Hong Kong 香港銅鑼灣駱克道 401-403 號榮華商業大廈 15 樓

Tel 電話: 2545 1501 Fax 傳真: 2545 2500 Website 網址 Main : www.hkcac.net HKCACInstitute : www.hkcac.net/moodle Email 電郵: cs@hkcac.net

Membership Application Form – For Members of Honorary Advisors

Part 1 : Personal Particulars

Title ( Mr / Ms / Dr / Ir / Prof )*: Family Name : Given Name:

Sex ( M / F ) Nationality : Occupation:

Address:

Telephone: Fax: Mobile : Email : Part 2: Profession and/or Occupation I am a Member of HKIA / HKIS / HKGBCA / HKCSA / CASA* Membership No : ________ (attach certificate copy)

I am a or Staff Member of New World / Chun Wo* Staff No : _______________ (attach staff card copy or affix company stamp here) I also serve as an Employer / Arbitrator / Mediator / Expert Witness / Dispute Resolution Advisor / Adjudicator / Project Manager /

Architect / Surveyor / Engineer / Construction Manager / Contracts Manager / Auditor / Solicitor / Barrister / Counsel / Educator /

Property Manager (please circle) / Others (please specify) For Fellow Membership Only

I have ( #please call HKCAC to consult on the latest list)

Bachelor degree or above in

construction or legal subjects

AND

Fellow membership of

approved organisation#

AND

Submitted a 3,000 words article on

construction disputes

Signature of applicant : Date:

After completion, please send to HKCAC by email at cs@hkcac.net or by fax : +852 2545 2500 to complete the application process.

Important Information 1. Members of HKCAC Honorary Advisors are entitled to free HKCAC membership entrance fee and one year free annual subscription fee.

2. After joining HKCAC as full members (ordinary or fellow), all HKCAC membership benefits including 20% on all course and seminar fees applies.

3. HKCAC Honorary Advisors :-

New World New World Development Co., Ltd. HKGBCA Hong Kong General Building Contractors Association

Chun Wo Chun Wong Construction & Engineering Co., Ltd. HKCSA Hong Kong Construction Subcontractors Association

HKIA Hong Kong Institute of Architects CASA Contractors’ Authorised Signatory Association

HKIS Hong Kong Institute of Surveyors

By completing and signing the Form overleaf, the applicant declares that 1. I have read and agreed to the Personal Data (Privacy) Ordinance Notice. 2. I manifest interests in construction dispute and resolution, and am happy to look into more of these matters through HKCAC. 3. I authorise HKCAC, its staff, employees and/or authorized members of HKCAC to deal with utilize and/or assess the data submitted by me as may be required in connection with

my application for membership. 4. I understand my data will become a part of HKCAC’s files and may be used for all purposes deemed necessary or useful by HKCAC. 5. I declare the information given in support of this application is accurate and complete. I understand that any misrepresentation will disqualify my application and may lead to

revocation of my membership. 6. I confirm I am familiar with and will adhere to HKCAC Constitution, relevant Rules and Codes of Professional Conduct and confirm of having a committing and active interest in

construction disputes and related fields. 7. Any information on this form may be made available by HKCAC to third parties for the purpose of Panel Listing and selection.

Personal Data (Privacy) Ordinance Notice Persons who supply data in their application to HKCAC are advised to note the following points pursuant to the Personal Data (Privacy) Ordinance. 1. Personal data provided in this application form will be used solely for the purpose of HKCAC activities in relation to members. In this connection the data herein will be dealt

with by HKCAC staff and/or by HKCAC Council. 2. After an application has been duly processed, the relevant papers of the applicant will be retained in a file established by HKCAC for each applicant. Such information will be

retained by HKCAC for as long as it deems necessary or useful. 3. Under the provisions of the Personal Data (Privacy) Ordinance, an applicant has the right to request access to, and the correction of, his/her personal data as retained by HKCAC.

Applicants wishing to access or make corrections to their data should submit written requests to the Secretary of HKCAC.

Notes 1. Completed form together with a photocopy of the certificates and an article (for Fellow membership) shall be returned by mail or delivery to : Hong Kong Construction

Arbitration Centre, 28/F., Park Avenue Tower, 5 Moreton Terrace, Causeway Bay, Hong Kong 2. Please include with your application a cheque payable to “Hong Kong Construction Arbitration Centre” in the following amount:

Entrance Fee HK $800 (waived) (Fellow and Ordinary) Annual Subscription HK $1,000 (1st year waived) (Fellow) HK $700 (1st year waived) (Ordinary)

3. HKCAC reserves the final decision and discretion on acceptance of membership applications and any other related matters. 4. HKCAC Constitution and Rules and Codes of Professional Conduct can be obtained at www.hkcac.net.

Form – MA-01HA

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