Adjudication is a temporarily binding and relatively cost-effective method for resolving dispute, in which a third party “Adjudicator” hears the arguments given by conflicting parties and issues a Decision that binds the parties unless and until the whole dispute is heard before a Court or an Arbitrator (in the event of a binding arbitration agreement). If the outcome is found unsatisfactory by a party there are only limited circumstances in which the Decision won’t be capable of being summarily enforced before the Courts, otherwise the parties shall be bound by the Decision until the dispute is referred to litigation or arbitration, as the case may be.
Under section 108 of the Housing Grants, Construction and Regeneration Act 1996 as amended by the Local Democracy, Economic Development and Construction Act 2009, the majority of construction contracts will allow for adjudication as a statutory right. It is a more informal and simple process than escalating a grievance to court. A party cannot ‘back out’ of adjudication if it is actioned by the conflicting party.
Disputes are referred to an “Adjudicator” who is required to make a decision within 28 days of the dispute being referred to him (this period can be extended unilaterally by the Referring Party by a further 14 days and thereafter further with the agreement of both parties).
If the Decision is found unsatisfactory by a party, the Decision may only be challenged on very limited grounds otherwise in the event of non-compliance the Decision may be summarily enforced in court by either party since the Decision is binding upon the parties until resolved by litigation, or in the event of an arbitration agreement, arbitration.
Construction adjudication can respect confidentiality and the process can take place privately – unless the matter is subsequently brought to court. This has the benefit of enabling disputing parties to participate in the process without compromising their public reputations unlike litigation which is public.
If you believe you have a dispute arising from your construction contract, you may begin the process of adjudication. This entails
the submission of a written notice of adjudication to the conflicting party, expressing your intent to bring an Adjudicator
into the dispute. This notice should contain:
Appointment of an Adjudicator should be made within seven days of the submission of a notice being made to the opposing party.
Next, you should send a referral notice to the chosen Adjudicator, with a copy sent to the disputing party. On receipt of the referral
notice by the Adjudicator, a 28-day period begins in which a decision must be made by the Adjudicator (this period can be extended
unilaterally by the Referring Party by a further 14 days and thereafter further with the agreement of both parties).
The referral notice should comprehensively contain all the information included in the notice of adjudication, with details of
the dispute and any documentary evidence that you may have, to support your case. It should not include evidence that the opposing
party has not seen since this could possibly negatively influence the decision.
If you are the party receiving the notice of adjudication, it is important to act quickly to gather your own case and supporting
evidence. Ignoring a notice of adjudication or refusing to take it seriously, could influence the final decision.
The Adjudicator should remain entirely impartial and work quickly to avoid either parties incurring unnecessary expense. An Adjudicator
is granted a wide scope within the procedure that he or she follows to come to a “Decision”, as well as within the Decision
An Adjudicator’s Decision will be made within 28 days (this period can be extended unilaterally by the Referring Party by a further
14 days and thereafter further with the agreement of both parties) and should be complied with by all parties. Grievances may
be raised again in court if either party is unsatisfied with the outcome, however in the vast majority of cases, the Adjudicator’s
Decision is enforced by the Court.
Davies and Davies offers trusted expertise and experience in the area of construction adjudication arising from contract disputes.
We can skilfully represent clients throughout the adjudication process. For a party pursuing adjudication, we can advise or oversee
the preparation of a case, the delivery of the notice, and referral. For defending parties, we offer services including the
preparation of responses to a notice of adjudication.
Adjudicators are under obligation to act quickly and avoid incurring undue expenses. Consequently, when used properly adjudication
represents a cheaper and faster alternative than litigation and arbitration.
Each party is normally expected to pay their own costs regardless of the final outcome, although the adjudicator may allocate total
fees between the parties as is deemed suitable.