Adjudication is a process to resolve construction related disputes. It is a quicker, simpler and less expensive alternative to traditional litigation. Adjudication is designed to resolve disputes on an interim basis and allows parties to continue and complete a project without getting bogged down in costly and lengthy court proceedings. A party to a construction contract can adjudicate at any time (and not just while the project is live), for example it can be used to resolve disputes relating to final accounts.
- Speed. The parties will get a quick decision, usually within 28 days.
- Cost. The costs of an adjudication are much less compared to if the same dispute was the subject of court proceedings.
- A final decision is not yet needed. An adjudicator’s decision is effectively an interim one. It is binding unless and until it is resolved by agreement, arbitration or court proceedings. As such adjudication can be an effective tool to help with short term cash flow disputes during the life of a project.
The key to a successful adjudication is preparation. The party commencing an adjudication (known as the Referring Party) has the strategic advantage of time to properly prepare its claim before firing the starting gun. If a Referring Party does not fully prepare it is a missed opportunity and will hand the advantage to the other side (the Responding Party). Once commenced, an adjudication requires a lot of work over a very short period of time for both parties.
Before a dispute/adjudication
Parties to construction contracts should follow these practical tips at all times and especially if a dispute occurs and/or an adjudication looks likely:
- Know your contract and familiarise yourself with its terms and each party’s obligations, in particular any notice or service provisions
- Keep good records – labour sheets, invoices, delivery notes – and keep them in a readily accessible order.
- What are the adjudication provisions? Have the parties agreed a particular adjudicator? Are there any specific adjudication rules or does the statutory Scheme apply?
After a dispute/once an adjudication has begun
- Act promptly and appoint someone with knowledge of the project and the issues in dispute to co-ordinate and organise your response.
- Identify who in your organisation may need to give a witness statement and ensure they are available to answer questions throughout the process.
- Begin pulling together your supporting documentation as soon as possible.
- What external support might your need? Typically, expert evidence might be required from a quantity surveyor or delay analyst.