A Helpful and Informative Guide to Construction Adjudication
Adjudication in the construction industry is not uncommon and for those who may need help with it such as project managers, property personnel and contract managers, the process can be difficult to navigate.
Here we have created a helpful guide which delivers practical, easy to understand and straight forward information about construction adjudication.
- What is Construction Adjudication?
Adjudication in construction contracts is an effective method of dispute resolution within the industry that tends to be faster, less formal and cheaper than court proceedings. The speed of adjudication means that in most circumstances construction work can continue which helps to support cash flow. The results of these disputes are determined by an independent adjudicator.
- What is a Construction Contract?
Under the Housing Grants, Contruction and Regeneration Act 1996, the ‘Construction Act’, any party to a construction contract has the statutory right to refer a dispute for adjudication at any time, as long as the construction contract is as defined in the construction Act.
Under the Construction Act, a construction contract is defined as an agreement to do any of the following;
- Carry out construction operations
- Arrange for construction operations to be carried out by others, for example via a sub-contractor
- Provide labour for construction operations
- What is Construction Adjudication Suitable For?
Adjudication in construction is typically used to help resolve cases relating to:
- Interim payments
- Defects in building work
- Disruption or delay in the construction process
- Extensions of time for completing the work
- Final accounts
- Breaches of construction contract
- The issue of a certificate of practical completion
- The issue of a certificate of making good of defects
Although the framework for construction adjudication lends itself to straight forward disputes such as those above, it is becoming increasingly relied upon for more complex cases such as professional negligence and termination of contract, due to its expediency at settling claims quicker and at a lower cost than going to court.
- Is Contruction Adjudication Legally Binding?
Adjudication is a method of dispute resolution that settles matters on an interim or temporary basis. This means that decisions are binding unless the dispute is revised by agreement, arbitration or legal proceedings further down the line and enforced quickly through the courts by an expedited process.
Often contracts will also make an adjudication decision binding if any formal proceedings to challenge it are not issued within a specific time period.
- What Might a Typical Construction Adjudication Timeline Look Like?
Here are some key steps of a typical adjudication process timeline, what it might include and how long it might take.
- Before you start – check that there is a construction contract in place and that there is a right to adjudication, the details of the claim have been bought to the attention of the other side and that it has been ignored or rejected.
- Start the process – the party bringing the claim ‘the referrer’ will serve a notice of adjudication followed by a referral notice containing full details of the claim.
- Within 7 days – both sides agree on an adjudicator and settle the terms & conditions of the adjudication. At this point any dispute over the right to refer the dispute to adjudication needs to be raised.
- Between 7 and 14 days – the defending party serves a response which is effectively a defence.
- Within 7 days – the refer replies and the responder has the opportunity to make further representations.
- By day 28 – the adjudicator will reach a binding decision.
