Adjudication – a refresher course

Many of you who are involved in the construction industry and property development will have heard the word ‘adjudication’, some of you may even have been unlucky enough to have actually been involved in an adjudication. In this article we seek to outline the basic principles and process of adjudication and explain what to expect.

Overview of adjudication

Adjudication has often been referred to as a ‘quick and dirty’ way of resolving disputes. This is in part due to the fact that the adjudication should only last 28 days between the Notice of Referral and the decision, or if agreed upon by the parties, a slightly longer period. In most cases adjudications last between 4 and 6 weeks from the receipt of the Notice of Referral. The decision of the adjudicator, who will normally be nominated by a professional body, is only interim and the parties can take the same dispute to final determination through an arbitration or the courts. For this reason decisions of adjudicators can be thought of as being less thought through albeit in reality this is not normally the case.

There are a number of key steps in an adjudication, these are as follows:

  • The first is the Notice of Adjudication which is a short submission setting out the nature of the dispute, identifying the contract and identifying the parties. This is supposed to give the responding party sufficient information to identify the dispute that is being referred and to ensure that a properly qualified adjudicator is appointed.
  • The Referral Notice which must be served within 7 days of the Notice of Adjudication and this will be the more detailed submission containing a full particularisation of the claim and attaching all the relevant documentation.
  • The Response setting out the defence to the claim;
  • A Reply to the Response, usually served within a week, often less.

It is very unusual for there to be a meeting of the parties. This is another reason why it is often considered to be a quick and dirty form of dispute resolution.

The benefits and disadvantages of adjudication

Adjudication has proved incredibly successful with many thousands of adjudications having taken place in England and Wales.  Adjudication almost certainly has saved a number of construction companies from insolvency as otherwise they would not be able to chase debts in the way that they are with adjudication. In the writer’s experience adjudication has in fact finally resolved a significant number of disputes which have neve returned for a final determination by arbitration or courts as decisions are very close to what you might expect to obtain from a court or arbitration and the costs will be significantly lower.

The disadvantage that you may have is, and it is an increasingly rare occurrence, an adjudicator who, for want of a better word, goes a little rogue. It is sometimes disadvantageous, especially if you are the responding party that you cannot pursue a claim against the referring party in the same adjudication, however, many adjudicators will at least give an indication of their views on any counter claim which can be very helpful for the parties.

Conclusion

We would strongly advise you if you are considering entering into a construction contract to obtain advice on adjudication and if you are to consider adjudication, the construction team at Goodman Derrick is highly experienced in adjudication and available to advise.

This guide is for general information and interest only and should not be relied upon as providing specific legal advice.  If you require any further information about the issues raised in this article please contact the author or call 0207 404 0606 and ask to speak to your usual Goodman Derrick contact.