SETTING THE TABLE:

Sir Michael Latham’s report (“the Latham report”) is considered to be a watershed moment. It persuaded the UK Government that primary legislation was required to give all parties to construction contracts a statutory right to have disputes resolved in the first instance by adjudication. This process was to be rapid and relatively inexpensive. The UK now has legislation (The Housing Grants, Construction and Regeneration Act 1996) along with similar legislation being passed in parts of Australia, New Zealand, Hong Kong and even World Bank funded projects. The post-apartheid South African government has also been fixated with procurement reform in terms of introducing appropriate methods for effective dispute resolution into the construction industry. Acknowledging the success in alternative dispute resolution (ADR) procedures in resolving labour disputes in terms of the Labour Relations Act No. 66 of 1995, the White Paper on Creating an Environment for Reconstruction Growth and Development in the Construction Industry obliges the public sector to promote the application of ADR methods, in particular adjudication, in our construction industry. CIDB took the lead in 2003, by officially introducing adjudication in South African construction contracts. CIDB Best Practice Guideline , observes that conventional mechanisms and procedures for final dispute resolution currently in use, normally arbitration or litigation, are both costly and time consuming. It further argues that small and emerging contractors are disadvantaged – and even imperiled – in the event of a major dispute arising.

 

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