Adjudication exists as an accessible and quick way to settle construction disputes, particularly for smaller contractors engaging with bigger employers. It’s a right granted by the Housing Grants, Construction and Regeneration Act 1996. While it is a right that cannot be refused without fair reason, it is not mandatory for it to be included in construction contracts. This does not mean, however, that it cannot be pursued for dispute resolution regardless.
Thanks to the Scheme for Construction Contracts 1998, adjudication can still be pursued even if a contract does not name it as a method of dispute resolution. Therefore, while it is not mandatory for it to be included in construction contracts, it does become the default due to the Scheme for Construction Contracts 1998.
When should you pursue adjudication?
Adjudication can be pursued at any time by any party involved in a construction contract. Of course, it is wise to wait until the presence of a dispute can be assured. This is because, to begin the process of adjudication, a claim must first be crystallised. For a claim to crystalise, the terms of it must be brought to the attention of the other side and the details fully understood. Failure to do this could result in any decision being invalid.
Adjudication is commonly used to resolve:
- Refusing or withholding payments
- Requests for extensions of time
- Poorly executed or defective work
- Clarification of the terms of a project
- Delays (various reasons)
Adjudication can be used to solve a variety of straightforward disputes. However, the process can only be used for one dispute at a time. If you are dealing with multiple disputes, you will need to follow the adjudication process separately for each one.
Can an adjudicator’s decision be challenged?
Technically, yes, an adjudicator’s decision can be challenged although this is not advised. Remember that the purpose of adjudication is to reach a quick resolution while avoiding the delays and costs that can be incurred during more traditional processes such as litigation. For this reason, there are limited circumstances in which an adjudicator’s decision can be challenged.
An adjudicator’s decision is binding and therefore difficult to challenge. Reasons a decision may be challenged are:
- The adjudicator did not have legal authority to make a decision.
- The natural rules of justice were not followed (bias).
- There was no construction contract in the first place.
- The dispute was not crystallised.
- The correct procedures weren’t followed by appointing an adjudicator.
Whatever reason you believe an adjudicator’s decision needs to be challenged, it is wise to seek legal advice on the matter. Not only will you be able to determine if you have solid ground to the challenge but you will be guided swiftly through the process to do so.
When can adjudication be excluded?
While every party involved in a construction contract has a right to adjudication, there are circumstances in which adjudication can be excluded. Usually, these refer to contracts involving a residential occupier or a development agreement.
Other exclusions include:
- Lack of a dispute
- Contracts that don’t comply with the Housing Grants, Construction and Regeneration Act 1996
An adjudication claim can also be rejected if:
- The dispute has not crystallised
- There are inaccuracies in the claim
- Incorrect documentation has been provided
- The dispute has already been settled
Get adjudication guidance
Even though adjudication is designed to be a straightforward process, it is always best to be informed fully before pursuing the process. I recently held a webinar that explains the adjudication process and how it can be used to even avoid disputes. View it here. For further legal advice, contact the team at Mercantile Barristers.
