What is Construction Adjudication and How Does it Work?
What is Adjudication?
Adjudication is the name given to a process of private dispute resolution which is very common in the UK construction industry.
Starting an adjudication against someone is similar to suing them in court, but there are some significant differences between adjudication and litigation.
You can voluntarily agree to adjudicate a construction dispute with someone. You might agree to this because you think it would be quicker and cheaper to do so than to resolve the dispute through the courts.
However, there are circumstances in which you may be forced to adjudicate, when you might prefer to go through the courts. Those circumstances are when ‘statutory adjudication’ applies.
What is Statutory Adjudication?
Statutory adjudication was introduced by the The Housing Grants, Construction and Regeneration Act 1996 (often referred to as the Construction Act 1996). The idea was to provide a solution quickly, so that disputes do not drag on and cause long-term cash-flow problems for the parties to the dispute.
There are some specific circumstances in which statutory adjudication does not apply. For example:
if the relevant contract does not fit the definition of ‘construction contract’ under the Construction Act 1996; or
if one of the parties to the contract fits the description of a ‘residential occupier’ under the Construction Act 1996.
How Long Does Adjudication Take?
Where it does apply, it has a standard timetable of 28 days from start to finish, meaning that you will normally have a decision on the dispute within a month of beginning the adjudication. That timetable can be extended in certain circumstances, but many adjudications follow the 28-day timetable.
The advantage of that is that – unlike with court proceedings – you don’t have to wait long to get an answer and you can then move forward with the job.
The disadvantage is that you get a lot less time to prepare your case (particularly when you are not the party that decides to start the adjudication process), and the adjudicator has a lot less time (and, as a consequence, information) for making his or her decision. This can sometimes mean that the decisions reached are wrong.
The rationale is that any decision – even one that is wrong – is better than no decision at all: a ‘quick and dirty’ resolution beats the parties’ getting bogged down in the dispute and losing focus on the job.
Can You Appeal an Adjudicator’s Decision?
Fortunately, an adjudicator’s decision is not final. If you are not happy with the decision, you cannot appeal it, but you can go to court and resolve the dispute through litigation in exactly the same way that you would have done if the adjudication had not taken place. However, generally, speaking, the court will expect you to honour the decision (which might include paying a sum of money to the other side) before it will allow you to litigate the dispute.
The Hamshaw team is experienced in construction adjudication, including statutory adjudication. If you wish to commence an adjudication, or if you have received a notice that a third party is commencing an adjudication against you and you need urgent help, click here to contact Hamshaw. We offer a fixed-fee for working on adjudications, where appropriate and subject to terms and conditions.