Disputes are all too common in the construction industry, so much so that a special remedy was created just for construction disputes – adjudication.
Since it was created, other sectors have picked up on adjudication due to its speed and efficiency when resolving a dispute.
While many of you may have experienced it at some point in your career in construction, it never hurts to revisit the basics.
What is adjudication?
Adjudication is a legally mandated process under the Housing Grants, Construction and Regeneration Act 1996 that allows parties within the UK to resolve a dispute quickly and cost-effectively. Although the legal costs of adjudication are not recoverable, they are typically much lower than using the court system.
It is a quick, legally mandated dispute resolution process where an adjudicator is appointed to make a decision on a dispute typically within 28 days, although this can be extended by agreement. The decision is legally binding on the parties until finally determined by the Court.
It is often described as rough justice, because the adjudicator determines the dispute typically on written representations only, meaning there is usually no hearing or oral evidence.
In payment disputes where correct and proper notices have not been submitted it is also often described as a pay now, argue later technique, designed to keep projects moving and protect cash flow.
Common disputes that require adjudication include:
- Non-payment or underpayment
- Delays and extensions of time
- Defective work or materials
- Breaches of contract
- Final account disputes
Adjudication tends to be quicker than any other method of dispute resolution.
What happens in the construction adjudication process?
The adjudication process is designed to be relatively straightforward and, importantly, fast.
- Notice of adjudication: The party wishing to commence adjudication, known as the referring party, serves a Notice of Adjudication on the other party. The notice should clearly identify the dispute and the nature and scope of the decision being sought. Once the notice has been served, the adjudication timetable can move quickly.
- Appointment of the adjudicator: An adjudicator must then be appointed within 7 days of the Notice of adjudication being served. The construction contract may identify an adjudicator-nominating body, or an adjudicator may be appointed through an appropriate adjudication service. The adjudicator’s role is to consider the parties’ respective positions, assess the evidence and reach a decision on the dispute.
- The Referral Notice: The referring party then serves its Referral Notice, setting out its case in more detail.
- The Response: The responding party will then have an opportunity to respond to the allegations and evidence.
- The Reply: The referring party will then typically have the opportunity to reply to new matters raised in the response.
- The adjudicator considers the evidence: Adjudication is generally conducted on the papers, although the adjudicator may request further information, evidence or submissions where necessary. The adjudicator has significant control over the procedure and must act fairly and impartially.
- The adjudicator makes a decision: Under the statutory adjudication regime, the adjudicator will generally have 28 days from the date of the Referral Notice to reach a decision, subject to any permitted and agreed extension. The adjudicator’s decision will determine the issues referred to them and should always give reasons for the decision.
- Enforcement If the unsuccessful party does not comply with the adjudicator’s decision, the successful party may need to take enforcement proceedings. The courts have historically adopted a robust approach to enforcing adjudicators’ decisions, reflecting the purpose of adjudication: to provide a quick decision that keeps money and projects moving while any wider dispute is dealt with separately.
How can we help?
Our team are here to support you with our dedicated adjudication service.
We can assist with the entire adjudication process from start to finish, all for a fixed fee.
Get in touch with our team to learn more about how we can support you.
For support with adjudication, get in touch with our team!