Which Laws Govern Statutory Construction Adjudication?
The statutory framework for construction adjudication is set out in:
Part II of the Housing Grants, Construction and Regeneration Act 1996
Part I of the Scheme for Construction Contracts (England and Wales) Regulations 1998 (SI 1998/649)
Part 8 of the Local Democracy, Economic Development and Construction Act 2009 (LDEDC Act 2009)
Housing Grants, Construction and Regeneration Act 1996
This statute is sometimes referred to by the shorthand phrase “Construction Act”, or shortened to the HGCRA 1996.
Part II of the Housing Grants, Construction and Regeneration Act 1996 containes the following key provisions:
Sections 104, 105, and 106 define a "construction contract" as a contract for carrying out construction operations. Certain types of work and contracts are excluded from construction operations (under section 105(2)), and contracts with “residential occupiers” are excluded from the legislation (under section 106). These are important provisions because statutory adjudication is only available in relation to “construction contract”
Section 108 gives any party to a "construction contract" the right to refer a dispute to adjudication "at any time." This section lists the minimum requirements for an adjudication procedure that must be included in every construction contract, and sets the default adjudication timetable.
These provisions are mandatory, and parties cannot opt out of them in their contract.
Section 107 was repealed in 2011, removing the requirement for construction contracts to be in writing. If the adjudication agreement is not in writing, the Scheme for Construction Contracts 1998 will apply.
Scheme for Construction Contracts 1998
This is sometimes referred to simply as “the Scheme”.
The Scheme for Construction Contracts 1998 support Part II of the Housing Grants, Construction and Regeneration Act 1996. They provide default fallback provisions. If a construction contract does not include all the adjudication provisions required by section 108 of the Housing Grants, Construction and Regeneration Act 1996, the provisions in Part I of the Scheme will be implied into the contract.
Local Democracy, Economic Development and Construction Act 2009
This is sometimes referred to as the LDEDCA, or by adding “as amended” to mention of the Housing Grants, Construction and Regeneration Act 1996
The Housing Grants, Construction and Regeneration Act 1996 was significantly reviewed and amended by Part 8 of the Local Democracy, Economic Development and Construction Act 2009, effective from 1 October 2011 in England and Wales.
Since that date:
a “construction contract” does not have to be in writing - it can be partly or entirely oral. However, unless an adjudication agreement between the parties is in writing, the Scheme for Construction Contracts 1998 will apply to the adjudication
any adjudication agreement between the parties must include a slip rule, allowing the adjudicator to correct any clerical or typographical errors in the decision after it has been given
parties cannot pre-agree who will pay each other's legal costs of the adjudication before the adjudication notice is issued (any such agreement would be invalid, even if both parties wanted it to bind them). The parties can only agree on legal costs in writing after the adjudication notice has been served. Where no such (valid) agreement is reached, it is ordinary for the parties to authorise the adjudicator to allocate his/her fees and expenses to one party (or both, in proportions) in the decision. Such authority must be given in writing either in the construction contract, or separetely after the adjudication notice has been served.