Adjudication has become the construction industry’s go-to for resolving disputes where mediation or other forms of informal negotiation have failed – but is it compulsory?
The answer is not a straightforward yes or no, but rather it depends entirely on the contracts involved and whether statutory adjudication applies by virtue of the Housing Grants, Construction and Regeneration Act 1996 (often called the Construction Act 1996).
Adjudication in contracts and practice
In a bid to reduce the backlog facing the courts and implement a constructive, discussion-led way of resolving disputes, many construction contracts contain clauses permitting adjudications to be brought “at any time”.
The Construction Act 1996 outlines the right for any party involved in a dispute, but only where that contract is a “Construction Contract” as defined by the Construction Act 1996, to refer it to adjudication.
In practice, adjudication is increasing in popularity. Due to the costs, timescales and safety concerns involved, construction disputes are not uncommon, so the sector has largely embraced the opportunity to achieve a binding result quickly and cost-effectively.
Should I use adjudication?
It offers a number of advantages over both mediation and litigation:
- Speed – Litigation can be incredibly time-consuming, whereas adjudication is generally much faster, it typically lasts 28 days.
- Cost – Adjudication is often far less expensive than litigation, albeit legal costs cannot be recovered.
- Outcome – As opposed to mediation, adjudication can provide a legally binding outcome (a determination) which can be enforced or made binding by the Courts, if the determination is not complied with.
- Privacy – Adjudication proceedings are private and confidential, but you may not receive this level of privacy with litigation.
Ultimately, while adjudication is not (and should not be) the only tool for resolving construction disputes, it is exceptionally useful and should be a consideration for most disputes.
To find out more about our fixed-fee adjudication service, please visit our website.