CONSTRUCTION ADJUDICATION

The law governing the resolution of construction disputes in England and Wales changed in May 1998 when the Housing Grants, Construction and Regeneration Act 1996 came into force. The 1996 Act introduced the concept of mandatory resolution of construction disputes by way of Adjudication. In layman’s terms this gives parties involved the right to refer a dispute to Adjudication at any point in time. Our barristers have decades of experience dealing with construction and engineering contract disputes through the adjudicative process. Selected members of the team are also trained adjudicators by the Chartered Institute of Arbitrators.

SPECIALISTS IN CONSTRUCTION ADJUDICATION

At Mercantile Barristers, our barristers are specialists in conducting construction and engineering contract disputes in adjudication. Given the real and practical issues of delay and disruption of the construction programme, assessment of the quality, quantity and valuation of the completed works; together with the associated losses and expenses that arise in adjudications, our barristers with combined experience in Quantity Surveying, Construction Project Management and as Counsel, have an unparalleled ability to speedily and comprehensively master the issues.

 

Our Barristers can represent you by firstly evaluating your dispute in a consultation, provide an opinion on the construction dispute, which may include commencing or responding to adjudication; and in many cases, attempting a negotiated settlement with the other side. As a result, we have created a systematised approach in our adjudication practice which employs methods designed to win cases or deploy effective defences for clients at first instance.

THE CONSTRUCTION ADJUDICATION PROCEDURE

The fast track Adjudication procedure comes to a decision pro-tem, usually within 28 days, which invariably must be obeyed unless extended with the consent of the adjudicator, or successfully challenged in arbitration or litigation. The adjudication process usually goes as follows:

Is there a dispute?
There must be a dispute between the parties to the construction contract/agreement, where one party is seeking a remedy.

 

Crystallisation of the claim
The claim should have crystallised. In other words, the potential Claimant should have explicitly notified the potential Respondent of their intention to begin the adjudication process and their basis of doing so, giving an opportunity for the Respondent to remedy the matter.

 

Therefore, both parties should be clear in their minds what the dispute is and the remedy sought. Our barristers are experienced in advising clients on this very important point and how the court may refuse to enforce an adjudicator’s decision was not based on a crystallised claim.

 

The Notice of Adjudication
The Notice of Adjudication is the first formal step in the adjudication procedure, particularising the dispute and notifying the Respondent that the dispute is to be referred to adjudication. The Notice of Adjudication should be prepared by the Claimant and served on the Respondent.

 

Appointing an Adjudicator
Once the Notice of Adjudication is served, the next step is to appoint an adjudicator. If an adjudicator is not identified in the construction contract, our barristers can advise clients on the procedure to mutually nominate and appoint a construction adjudicator.

 

The appointment of an adjudicator must usually be done within seven days of the service of the notice of adjudication. In the event this is not done, the Claimant must restart the adjudication process.

The Referral Notice
The Claimant, who initiates the adjudication, is also known as the Referring Party. Given the time constraints of the adjudication procedure, the Referral Notice is the Claimant’s opportunity to make as detailed submissions as possible to support the Claimant’s claim to the adjudicator. Our barristers have considerable experience in this form of written advocacy and are available to advise on the drafting and service of a Referral Notice; provision of expert reports; and drafting of witness statements, all of which should be done within seven days of serving the notice of adjudication.

 

The Response
This is the Respondent’s defence to the Referring Party’s claim. Although the 1996 Act does not specifically require a Response from the Respondent, the need for this can be agreed with and set by the adjudicator. Our barristers have experience in advising Respondents on a Response and the drafting of accompanying witness evidence.

 

The Adjudicator’s Decision
As mentioned above, the adjudicator must reach their decision within 28 days of service of the referral notice. This period can be extended by a further 14 days if the Referring Party agrees, or can be further extended if both parties agree.

 

The adjudicator’s decision is temporarily binding until the underlying dispute is finally determined by court proceedings, arbitration or by agreement of the parties via negotiation or mediation. Our barristers are experienced in advising clients on how to enforce decisions, usually by way of summary judgement.

ISSUES WITH THE ADJUDICATION PROCESS

The obstacles in raising a successful challenge to the Adjudicator’s Decision are significant. This can come as a shock to the unprepared party who may have been ambushed by their opponent and must immediately pay a significant amount of money; we strategise clients’ cases to avoid sky-rocketing Adjudication costs.

 

Although Adjudication brings practical benefits to dispute resolution in the construction industry, the implication of the short 28-day time table is that the parties involved in the dispute must be highly organised and skilled in order to succeed.

 

The Referring Party (i.e. the Claimant) who might initially be in control of the timetable when issuing the Referral Notice will have to be ready to deal with a substantial Defence within a short time. The Responding Party (i.e. the Defendant) on the other hand is regularly exposed to dealing with and preparing a Defence to a substantial Claim, which has taken much longer to prepare, within the short period of a few days.

CONSTRUCTION

Adjudication is a statutory dispute resolution procedure recognised in the construction industry and introduced by the Housing Grants, Construction and Regeneration Act 1996 (as amended) (“the 1996 Act.”). The purpose of the 1996 Act was to provide an efficient and quick cash-flow friendly solution during the process of a construction project.

 

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