Adjudication is a way of resolving disputes in construction contracts. It was introduced by the Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996) and later amended by the Local Democracy, Economic Development and Construction Act 2009 (LDEDC 2009) to provide a fast and economical means of resolving disputes that can arise during the course of a construction project.
Adjudication can be used at any time during a contract and is a fast way to resolve a dispute, usually within 28 days of referral. It can be a simple procedure, so in many cases there is no need to involve lawyers and is usually much cheaper than either arbitration or litigation.
An adjudicators decision is temporarily binding on the parties unless and until the dispute is finally decided by litigation or arbitration or agreement between the parties. The majority of adjudication decisions are in fact accepted by the parties as the final resolution of the dispute.
In the event of one party failing to comply with the decision, proceedings can be started in the Technology and Construction Court (TCC) for ‘summary judgement’ and the TCC endeavours to list an enforcement hearing within 28 days of the issue of the claim form in order to mirror the speed and efficiency of the adjudication process.
Disputes appropriate for referral to adjudication
- contractual disputes with designers before construction begins
- contractual disputes with and between designers, contractors and sub-contractors during construction and after completion
- interim payments
- delay and disruption of the works
- extensions of time for completion of the works
- final account issues
- breach of contract
- termination of a contract
- professional negligence
Benefits of Adjudication
- Adjudication will allow the recovery of money properly due under the contract quickly, strengthening cash-flow.
- Adjudication allows rapid resolution of outstanding issues during a contract so that time and staff resources are released to concentrate on adding value to the core business function.
- Avoidance of long and costly arbitration or litigation to resolve a dispute.
- Client relationships can be more easily maintained if disputes are resolved quickly and communications kept open rather than suffer permanent damage caused by expensive and drawn out litigation.
How to start an adjudication
- Ensure the dispute has been aired between the parties so that it has "crystallised".
- Prepare a written notice of adjudication with the following details:
- nature and brief description of the dispute and the parties involved;
- when and where the dispute arose;
- nature of the redress being sought;
- names and addresses of the parties to the contract.
- Serve the notice on the other parties to the contract
- Use the notice to inform the Adjudicator Nominating Body if named in the contract
What to do if you have received a notice of adjudication
Firstly you must act quickly in deciding what you should do
Initially consideration should be given to the following
- Is the contract a construction contract and covered by the HGCRA 1996 as amended ?
- Is there a dispute or difference?
- Has it crystallised?
- Is the dispute referred to in the notice the same as the dispute that has crystallised?
- Does the dispute arise under the contract?
- Has a single dispute been referred to adjudication?
- Has this dispute been the subject of a previous adjudication?
- Has the adjudicator been validly appointed?
- Should I challenge the adjudicator's appointment or jurisdiction?
How we can help
James Associates work in compliance with the professional standards of recognised bodies like the Royal Institution of Chartered Surveyors and The Chartered Institute of Building. We are committed to ongoing professional development in order to provide our clients with the highest levels of expertise they deserve.
An agreed adjudicator can be named in the contract at the outset so that in the event of any dispute both parties can have certainty over who will resolve it. We are happy to discuss such appointments with parties prior to the formation of a contract.
In addition if you are contemplating the issue of a notice of adjudication, or are in receipt of a notice, you can contact us for a no obligation discussion.
The relevant legislation in the form of Part II of the HCRA 1996 and the Scheme for Construction Contracts may be found on the following websites:
- Housing Grants, Construction and Regeneration Act 1996
- The Scheme for Construction Contracts (England and Wales) Regulations 1998
We have wide experience in dealing with both commercial and industrial properties from steel framed industrial units clad asbestos cement to modern office accommodation.
Often, we are asked to assist or represent both Landlords’ and Tenants’ at the commencement, renewal, assignment and expiry of leases by preparation of various documents including schedules of condition and dilapidations, to assist both parties in reaching an agreed settlement.
We also provide repair and maintenance advice for property, through to project management for building work and can assist with the preparation of section 20 notices of the Landlord and Tenant Act 1985 where necessary.
We can assist home buyers and Landlords by offering a range of pre-purchase services including building surveys, defect investigation of individual elements and non-invasive testing that seek to place the purchaser in the position of being an ‘informed buyer’; we are fully independent and you can be sure that we will represent your interests 100%.
In addition we offer existing home owners contemplating development Party Wall advice and act as Party Wall Surveyors in accordance with the Party Wall etc. Act 1996.