Adjudication and Resolving Disputes
Adjudication is a fast mechanism for settling disputes relating to construction contracts on a provisional interim basis. Adjudication provides for a tight timetable and requires the impartiality of an adjudicator. There is a right to refer a dispute to the Technology and Construction Court at 'any time'.
The right to adjudicate can be provided for expressly in the parties’ contract. In addition, parties to construction contracts have a statutory right to adjudicate disputes under the Housing Grants, Construction and Regeneration Act 1996.
How is an Adjudicator appointed?
An Adjudicator must be appointed within seven days following the serving of the Notice of Adjudication. Provisions can be made in the construction contract to appoint an Adjudicator who has been agreed to by the parties to the contract.
If an Adjudicator has not been named under the construction contract and the parties cannot agree who to appoint, the party who referred the dispute to adjudication may make an application to an Adjudicator Nominating Body.
What is contained in the Notice of Adjudication?
The purpose of the Notice is threefold:
- inform the other party what the dispute is
- ensure that the appointing body has enough information to appoint an adjudicator, and;
- define the dispute so the adjudicator knows the ambit of their jurisdiction
The Notice may provide:
- a last opportunity to the other party to resolve the dispute without adjudication
- an opportunity to the other party to raise any technical objections to the adjudication before the costs of appointing an adjudicator have been incurred
- an opportunity for both parties to try to agree the identity of the adjudicator
Notice of Adjudication can be served at any stage of the dispute. However, for notice to be served, the dispute must have ‘crystallised’. Crystallisation of a disputes has been defined by the Courts as:
See Fastrack Contractors v Morrison Construction (2000) 75 ConLR 33
How long does an Adjudication take?
The main advantage of Adjudication is that it is fast and cheap. The entire process should be concluded within 28 days; however, this can be extended with the consent of both parties and the Adjudicator.
Is the Adjudicator’s decision binding?
The decision is final and binding, although it can be subsequently challenged in arbitration or litigation. Until a further decision is given by an Arbitrator or Judge, the Adjudicators decision must be complied with.
Who pays the Adjudicator’s fees?
Both parties to the Adjudication are responsible for paying the Adjudicator’s fees and expenses. If there is a dispute over the amount an Adjudicator charges for their service, the parties can apply to the court for clarification.
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