Construction Adjudication

Construction adjudication is a method of resolving construction disputes created by Part 2 of the Housing Grants, Construction & Regeneration Act 1996. It applies only to construction contracts, a term defined in that Act. Certain types of construction works are excluded from the meaning of that term, e.g. drilling for, or the extraction of, oil or natural gas. Contracts which principally relate to operations on a dwelling which one of the parties to the contract occupies, or intends to occupy, as his/her residence, are also excluded from the definition.

The right to adjudicate is said to arise at any time. The primary curb on that freedom though is the need to show that a dispute has crystallised, i.e. it has arisen and the responding party has had an opportunity to admit or dispute it, but has not done so.

A third-party Adjudicator oversees a 28-day period in which the claiming party (the Referring Party) puts forward a claim in writing together with evidence (the Referral), the other party then responds to it in kind (the Response), and the Responding Party replies (the Reply). Other steps are sometimes added to those 3 core steps. The Adjudicator then publishes a Decision which must be complied with promptly by the parties. If it is not, the winning party may elect to start enforcement proceedings at court. The Court will be likely to order enforcement unless the other party can fall within some narrow exceptions.

Adjudication is rapid and unsophisticated and hence far cheaper than litigation and arbitration. However, that means that the outcome is more unpredictable and the quality of the Adjudicator often disappointing. Parties almost always bear their own costs of the adjudication whether they win or lose.

It is common for a Responding Party to raise jurisdictional and other challenges about the scope of the Adjudicator’s authority and the fairness of the processes he/she is overseeing. These challenges encourage the Adjudicator to resign or adjust the procedures, under the threat that if he/she does not, these will be grounds for challenge in any enforcement proceedings.

Adjudication is a central feature of construction dispute resolution and we have a great deal of experience of it.