Construction Adjudication is a fast and effective way to resolve disputes without ending up in prolonged commercial litigation.
At IMD we are experts in Construction Adjudication under a range of standard and bespoke construction contracts. If you have are seeking help with commencing or defending adjudication.
Construction adjudication is a fast-track dispute resolution process designed specifically for the construction industry. It allows parties to resolve disputes quickly and cost-effectively without the need for lengthy court proceedings. Typically used to address issues such as unpaid invoices, delays, defects, or breaches of contract, adjudication is a statutory right under the Housing Grants, Construction and Regeneration Act 1996 in the UK and is also often an express contractual right.
The process involves appointing an independent adjudicator who reviews the evidence, makes a binding decision, and delivers it within 28 days, unless the parties agree to extend the timeframe. This approach ensures that cash flow and project continuity are maintained, making it a preferred option for many in the construction sector.
A construction contract will usually identify a nominating body from whom the Adjudicator will be selected. The most nominating body is the Royal Institute of Chartered Surveyors (RICS). If RICS is identified as the nominating body then the Adjudicator will be a RICS member who would be ideally placed to deal with valuing works and understanding the real-world operation of construction contracts and the industry. However, there are other nominating bodies such as TECSA (the Technology and Construction Solicitors Association). TECSA members may be more suited to adjudications concerning contractual interpretation or points of law.
Before an adjudication can commence, there needs to be a dispute. This means that a claim has been made by one party and rejected by the other party or ignored for a sufficient period. This is called crystallisation. If adjudication is commenced prior to crystallisation, any Decision obtained in the Adjudication may be void.
Once you have a crystallised dispute, party commencing the adjudication (called the Referring Party) must serve a notice of adjudication on the other party (called the Responding Party). The Adjudication Notice is a summary of the Dispute. There are some strict requirements for the content of the Notice of Adjudication. If it contains errors, it may mean any later Decision in the Adjudication cannot be enforced.
Once the Adjudication Notice has been served, a copy is sent to the appropriate nominating body who will appoint the Adjudicator. The Adjudicator will usually then set out the timetable for the Adjudication. Each party will normally have 1 or 2 rounds of submitting arguments and supporting documents.
Within 7 days of service of the Adjudication Notice, the Referral Notice must be served by the Referring Party. This is the detailed statement of the claim being made along with the supporting evidence. If the Referral Notice is served late it is void and the Adjudication will need to be started again.
Once the Referral Notice has been served, the Responding Party will be required to serve their Response Notice (their arguments and supporting documents) within 7-14 days.
The Adjudicator may give permission and deadlines for additional submissions called Reply (from the Referring Party), Rejoinder (from the Responding Party) and Surrejoinder (from the Referring Party). If multiple submissions are needed then the parties may agree an extension up to a further 28 days.
Once the submissions have been completed, the Adjudicator will review all the documents and then give their Decision. The Decision will record the outcome of the Adjudication (ie which party needs to be the other and the amount), give a deadline for compliance (usually 7 days from the date of the Decision) and make a determination who has to pay the Adjudicator’s fees (usually the losing party).
Adjudications are intending to provide a binding interim result until the matter is finally resolved at court (or arbitration if applicable). This means that even if the Adjudicator makes mistakes of fact or law, the Decision will be enforceable. This means that if a losing party does not comply with a Decision, the successful party can apply to court to get a judgment enforcing the Decision. A party is not allowed to commence proceedings to get a final determination of the dispute until the interim Decision has been paid. It is only in very rare circumstances (where there has been a breach of natural justice or the Adjudicator has exceeded their jurisdiction) that a court wont enforce an Adjudication Decision.
The cost of adjudication will vary depending on the issues involved however adjudication will almost always be cheaper than litigation (often significantly since the typical cost of taking a claim to court is usually in the region of £100,000 plus VAT). Typically for a ‘smash and grab’ adjudication fees may be between £6,000-£10,000 plus VAT and disbursements. For a complicated final account dispute, legal fees would likely be at least £20,000 plus VAT. However, unlike court proceedings (where the losing party usually pays the victor’s legal costs) in adjudication each party is responsible for their own costs. The loser is usually required to pay the Adjudicator’s fees.
Adjudication offers the advantage of speed in comparison to other methods of ADR or commercial litigation. This can be a huge advantage as it is likely beneficial for you to achieve a quick resolution to the dispute. It is also usually cheaper than court proceedings.
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Adjudication is not as common as other methods of ADR, so if adjudication is the named method of ADR in your contract or agreement, or you are interested in a speedy and binding resolution, IMD will advise you on:
When it comes to any type of commercial dispute, the key to reaching an acceptable resolution is to understand the nature of the dispute to develop tactics and a strategy that works best for your business.
Adjudication of a dispute could be the best strategic option for your commercial dispute because:
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No company, whether a start-up, SME or multi-national, can avoid all business disputes. That is where our dispute resolution solicitors step in to react quickly at the first sign of a claim or jurisdictional dispute. With our legal expertise, combined with a pragmatic commercial focus, we can work with you to find the best solution to your problems
Settling and resolving disputes out of court to save your business time and money is the goal of our alternative dispute resolution solicitors. Our team are specialists in commercial dispute resolution, and reaching a settlement best suited to your needs is our focus. Through alternative dispute resolution (ADR), we focus on achieving fast and commercially pragmatic solutions that work for your business.
Adjudication is a fast and effective way to resolve disputes without ending up in prolonged commercial litigation.
Many commercial contracts and agreements include adjudication as the preferred means of alternative dispute resolution (ADR). However, even if adjudication is not referred to in a contract or deal, the parties to a commercial dispute can agree to use adjudication.
Our adjudication solicitors will explain the adjudication process and discuss whether adjudication is the best method for your business to resolve its dispute with a third party.
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