What Is Adjudication In Construction?

When a dispute arises between two parties, there are a number of ways in which the parties involved can find a resolution, including arbitration, mediation, negotiation and litigation. In adjudication, a third party will review the case presented by either side and make an enforceable decision.   

Adjudication tends to be a more favourable approach in construction projects due to its relative speed and the financial savings that can be made in comparison to other forms of resolution. Additionally, as Adjudicators tend to be persons with direct experience in construction matters, they bring some degree of authority to the proceedings. Adjudicators are often quantity surveyors, architects, or solicitors with specific construction knowledge and experience. In this article, what is adjudication in construction, we take a look at the process and mechanism involved.

Free Initial Telephone Discussion

For a free initial discussion on how we can advise you on what is the purpose of adjudication and what are the potential problems with adjudication in construction, get in touch with us today. We are experienced in dealing with all aspects of conflict resolution in construction. We will review your situation and discuss the options open to you in a clear and approachable manner. Early expert legal assistance can help ensure you avoid the stress of dealing with these issues on your own. Simply call us on 0345 901 0445 or click here to make a free enquiry and a member of the team will get back to you.

Who can be an adjudicator?

The adjudicator can be anybody the parties agree it to be. He or she is normally a construction professional of some sort and is often a surveyor, architect, or solicitor. The parties can agree a named individual at the start of either the contract or the adjudication proceedings, but usually, the contract will just state an adjudicator nominating body such as RICS, Royal Institute for Chartered Surveyors, RIBA, Royal Institute of British Architects or the Chartered Institute of Arbitrators.

You should be aware that the adjudicator nominating bodies usually charge a fee of several hundred pounds for checking the availability and appropriateness of the adjudicator before nominating him.

What is the process of Adjudication?

Adjudication can be started by either of the parties involved. This is done by issuing a Notice of Adjudication that sets out the basic details of the dispute and the remedies requested by the referring party.  The referring party then must arrange for the appointment of an Adjudicator. The person selected as the adjudicator can either be named in the contract, can be chosen by agreement, or by independent nomination.

The responding party will usually provide their response within a few weeks of the referral and there will often be further submissions in the form of a reply. At this stage, there may be a meeting between the parties and the Adjudicator and there may also be a site visit either as part of that meeting or otherwise.

The idea behind adjudication is that it is ideally supposed to be a relatively quick process taking 28 days from the start to the point when a decision is made. The referring party may unilaterally extend this period by 14 days to 42 days and the parties may also agree extensions of any length.

The decision of an Adjudicator is considered to be partially binding, meaning that it is binding until the matter is finally decided by a court or, where applicable, by arbitration. The effect of this is that an Adjudicator’s decision can and will be enforced by the courts. It can often take around 8 weeks from issuing a claim form to getting a court order.

If either party wishes to challenge an Adjudicator’s decision, in the form of litigation or arbitration, they will be expected to comply with it first before they may challenge it. The principal of Adjudication, and the law generally, in relation to construction disputes is often summarised as “Pay now, argue later”.

It is important to note that Adjudication is a cost-neutral form of dispute resolution. This means that each party must pay their own legal costs and it is extremely rare for these to be payable by the other side. The Adjudicator’s costs are however usually apportioned on the normal basis, which is that the losing party will pay them although this doesn’t always happen.

How much does adjudication typically cost?

Adjudication is usually considerably cheaper than formal litigation. A lot depends upon the level of detail involved. A single contentious point will cost less than a full-blown final account adjudication. It will depend upon how much evidence has to be addressed and whether the involvement of experts or Counsel is required. A lot will also depend upon how much of the work the parties are willing to do themselves. A short, single issue adjudication could cost a few thousand pounds whereas a far more complex case could cost tens of thousands.

What is the process after adjudication has taken place?

As soon as the adjudicator has made his decision, it is important that both sides abide by it. If the decision is not complied with, there is an abbreviated High Court procedure for enforcing an adjudicator’s decision. The London Technology and Construction Court have created a short enforcement application procedure. In the absence of very few technical grounds, the adjudicator’s decision will be enforced against the paying party. The loser will also have to pay the winning party’s legal costs of the enforcement proceedings. It is absolutely crucial that the rules of adjudication are followed otherwise the parties may end up with an unenforceable decision which would probably just result in duplicated costs as the parties repeat the process.

How we can help

We have a proven track record of helping clients deal with dispute resolution in construction. We will guide you through the process and ensure all checks are carried out swiftly and efficiently and we firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting.

How to Contact Our Construction Solicitors

It is important for you to be well informed about the issues and possible implications of adjudication and other forms of dispute resolution and litigation. However, expert legal support is crucial in terms of ensuring a positive outcome to your case.

To speak to our Construction solicitors today, simply call us on 0345 901 0445, or click here to make a free enquiry. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.

Authored by Ben Posted in Construction, News Tagged as