One of the many benefits of adjudication, specifically in the construction industry, is the speed at which a resolution can be reached. The process of adjudication can begin and end within 28 days, making it a more cost-efficient alternative to litigation in many cases. Under the Housing Grants, Construction and Regeneration Act 1996 (HGCRA), an adjudicator must usually give a decision within 28 days of the referral notice, though this can be extended with agreement.
In comparison, litigation is a more formal and lengthy process that can take months or even years for a resolution to be reached. This results in costly court fees and legal expenses, as well as a delay to any projects that need to be put on hold during this time.
Therefore it often seems like a smart choice when disputes arise during construction projects to use adjudication. However, while speed and cost efficiency are significant advantages, they can quickly become disadvantages without the correct preparation. In some cases, an adjudication can even be derailed at an early stage if the notice of adjudication or referral is invalid, which can deprive the adjudicator of jurisdiction. When this happens, the process must begin all over again, adding to the delay that the parties were originally trying to avoid.
Even so, in cases of construction disputes, adjudication remains a highly popular method. Let us break down the specifics of adjudication vs litigation to provide a rounded understanding of each path.
Adjudication vs Litigation
Adjudication involves an independent third party, known as an adjudicator, who makes a temporarily binding decision on the dispute.
Timescale: A decision will usually be made within 28 days.
Cost: Costs vary, but adjudication is typically less expensive than litigation because of its speed and limited procedure. Parties normally bear their own legal costs, while the adjudicator’s fees are apportioned between them.
What you may not be aware of: Because of the compressed timetable, decisions can sometimes appear rushed or one-sided, even though adjudicators must remain impartial. This is why it is vital to be fully informed of the process before entering adjudication. Emotions can run high during disputes, and one party may feel they have been treated unfairly if the decision goes against them.
Litigation is a formal process that involves taking the matter to court and following a structured series of steps, with the ultimate goal of enforcing legal rights or settling a dispute.
Timescale: Resolution can take many months or even several years, depending on complexity.
Cost: Litigation is usually more expensive, with court fees, expert evidence, and detailed cost assessments.
What you may not be aware of: Popular culture sometimes gives the impression that litigation means handing everything over to a lawyer and stepping back. In reality, litigation requires significant input from clients and is time-consuming for all involved; professionals and clients alike.
How can a barrister help guide your decision?
It is a common misconception that barristers only deal in litigation. In fact, Mercantile Barristers are also experts in adjudication law. We are regularly asked for advice in construction contract cases and have sound knowledge of adjudicator nominating bodies, adjudicators, and the specialist courts that enforce their decisions.
Adjudication can feel front-loaded, as strict requirements apply to notices and referrals, small procedural errors can derail a claim. Then, as outlined above, there is always the concern that the adjudicator’s decision may feel rushed because of the timetable.
Despite these concerns, adjudication is often the preferred dispute resolution process in construction projects, offering speed and relative cost-efficiency. The best way to overcome any risks is to seek the advice and support of a barrister from the outset. We can help safeguard jurisdiction, shape a winning strategy, and prepare submissions that maximise your chances of success.
On Tuesday 21 October, I will be hosting a webinar exploring in more detail when adjudication applies, its advantages, and the support available to you from barristers such as Mercantile Barristers. Join me on this date to prevent dispute headaches, delays, and costly consequences.
