Adjudication in Construction Law: Fast-Tracking Construction Contract Disputes & Cash Flow
What is Adjudication in Construction Law?
Adjudication is a statutory dispute resolution process introduced to the construction industry to provide swift, interim decisions on issues that arise during a project. As Lord Denning famously said “Cash flow is the lifeblood of the building industry” and therefore the core principle is to “Pay now, argue later” which means that the paying party must comply with the adjudicators decision while reserving the right to challenge it later through further proceedings.
The adjudication process is usually conducted on paper without the need for a hearing and provides for a decision within 28 days!
Common types of Disputes Handled By Adjudication
Adjudication is not limited to disputed payment applications and non-payment, it can also be used for matters such as
- Delays and extensions of time
- Defective work and quality issues
- Valuation of variations and changes
- Interpretation of contract term
- Contract termination
Why Choose Adjudication?
- Speed: Adjudication is rapid by design. Disputes can be resolved in as little as 28 days, a fraction of the time required for traditional litigation or even arbitration.
- Expertise: Adjudicators are often specialists with deep knowledge of construction law, contracts, and technical matters. Their expertise ensures decisions are informed and relevant.
- Cost-Effectiveness: By avoiding protracted legal battles, parties save substantial resources—both financial and emotional.
- Continued Progress: Adjudication aims to keep projects moving and ensures that contractors are paid!
- Our Fixed Fee Adjudication Service (FFAS).
Why Choose Palmers?
Our specialist Construction Law Team provides the experience and skills to help you through the adjudication process whether you are bringing the adjudication or defending it. We also work closely where needed with specialist Construction and Engineering Barristers, Crown Office Chambers and Gatehouse Chambers, who also have a fixed fee adjudication scheme for more complex adjudications suitable for the fixed fee scheme.
Our fixed fee service in respect of payment disputes (excluding final account and true value adjudications) allows you to plan ahead and resolve payment disputes in the absence of the correct and proper notices, without unexpected costs. Our Fixed Fee Adjudication Scheme is as follows:
- All Adjudications up to a value of £25,000 plus VAT the total cost will be £2,500 plus VAT and excluding disbursements.
- All Adjudications of a value above £25,000 plus VAT, the total cost will be 10% of the value of debt plus VAT and excluding disbursements.
- If Counsel is required due to the complexity of the matter then we will seek to obtain a fixed price from Counsel to undertake such work.
For details as to the work included and excluded in our Fixed Fee Adjudication Scheme please see here.
The costs of Adjudication are usually not recoverable from the other side even if successful, however, whilst enforcement of an Adjudicator’s award is excluded from this fixed fee scheme, the costs associated with enforcement of an Adjudicator’s award are usually recoverable.
The cost of nomination fees of the Adjudicator are excluded and these are typically between £300-£400 plus VAT. Costs of any rejoinder and/or surrejoinder and/or any further submissions are excluded. Costs of Counsel’s advice on any matter are excluded
We also fixed fees for adjudications relating to other construction disputes such as, final account disputes, true value adjudications, delays/extension of time claims and loss and expense for delay claims – to discuss these types of disputes please speak to one of our team for further information.
| Matter value | Adjudication cost under FFAS |
|---|---|
| Up to £25,000 | £3,500 |
| £25,000 - £35,000 | £4,250 |
| £35,001 - £50,000 | £5,000 |
| £50,001 - £75,000 | £6,000 |
| £75,001 - £100,000 | £7,500 |
| £100,001 - £200,000 | £9,500 |
| £200,001+ | £11,500 |
The above costs do not include VAT or disbursements. Disbursements would typically include the referral fee to the nominating body, any expert fees that maybe required and counsel’s fees if a barrister is required.
If you receive a Notice of Adjudication it is important to contact us urgently as adjudication relies on an unforgiving timetable to ensure that the adjudicators decision is made within 28 days.
Want to know more? Contact us to get started
