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Nottingham | Portsmouth | London | Bristol

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Contact us

What is adjudication in construction? A quick guide for contractors and subcontractors

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A recent survey carried out by Arcadis and published in their 2020 Global Construction Disputes Report discovered that adjudication was the most common method of alternative dispute resolution (ADR) in the UK construction industry during 2019.
Adjudication offers a quick and cost-effective solution, making it particularly suitable for smaller contractors and subcontractors who cannot spare the time and expense of court proceedings or arbitration. It is a good idea to be aware of the adjudication process as it can be the most effective way of protecting your cash flow if a dispute arises. 
In this article, we provide an overview of the adjudication method and its benefits for resolving construction disputes. Of course, the best way to deal with a disagreement will depend on its nature and the parties involved. For personalised dispute resolution – or dispute avoidance – advice, please do not hesitate to contact our team.

What is adjudication?

Adjudication aims to maintain cash flow in construction projects. It is often referred to as a “pay now, argue later” approach as it helps a dispute to be swiftly and temporarily settled, allowing money to keep moving and work to continue.
With this ADR method, the dispute is referred to an adjudicator (a qualified, neutral individual) who makes a binding decision on the parties. Although it can be challenged later, this is rarely successful. In most cases, the decision is either accepted by both parties or they come to an out-of-court settlement at a later date. 

Who can use adjudication?

Adjudication can be used by the parties to a “construction contract”. If you have a construction contract, you are entitled to refer a dispute to adjudication at any time,[1] whether the contract contains explicit adjudication provisions or not. [2] This right cannot be contracted out of by either party.
“Construction contract” has a broad definition, meaning the terms do not always have to be in writing; a verbal agreement may be enough. 

What is the adjudication process?

Communicate with the other party

Before the adjudication process can begin, a dispute must exist (or in legal terms, it must have “crystallised”). This means you should first communicate to your client the details of your claim and the outcome you are seeking. They must have the opportunity to respond, either admitting, altering or rejecting your claim. If the client rejects or does not respond, the dispute can be referred to adjudication.
If the dispute has not crystallised before the notice of adjudication is served (see below), the adjudicator will not have the required authority to make a decision.

Serve the notice of adjudication

This is the first formal step, which requires you (the “referring party”) to serve a notice on your client (the “responding party”). The notice must be drafted carefully and include details of the claim and the parties involved, as well as the remedy being sought.

Appoint an adjudicator

An adjudicator must be chosen and appointed within seven days of the notice being served. Your contract may name an adjudicator or an adjudicator nominating body (ANB), who will nominate an appropriate individual for you. If your contract is silent on this matter, you can apply to an ANB yourself.

Serve the referral notice

This notice sets out your case in detail and is accompanied by supporting documentation, including expert reports and witness statements. The referral notice must be served on the adjudicator and the responding party within seven days of serving the notice of adjudication.

A decision is made

The adjudicator will assess your and the responding party’s submissions and make a binding decision within 28 days of the referral notice (although this timescale can be extended).
The adjudicator’s decision is binding until the dispute is finally resolved by legal proceedings, arbitration, or agreement of the parties.

What if the responding party fails to pay?

If you are successful but the other party does not pay the money it is ordered to, you can take the matter to the Technology and Construction Court, which will enforce the adjudicator’s decision in most cases.  

What disputes can adjudication be used for?

Adjudication is most appropriate for payment disputes and construction claims relating to:
● Delay and disruption● Extension of time● Work defects● Final accounts● Breach of contract● Termination of contract● Professional negligence

What are the benefits of adjudication?

The big benefits of adjudication, as already mentioned, are the protection of cash flow and the prevention of projects coming to a halt. It is also an inexpensive and fast way of resolving common construction disputes, and can help you to avoid costly, lengthy and public court proceedings temporarily or altogether.Adjudication decisions can be made without the need for a face-to-face meeting. This makes it a particularly advantageous option during the coronavirus pandemic, but also under more normal circumstances as a way to save busy businesses time and disruption.

Contact our Construction Claims Consultants

If you are a contractor, subcontractor or other construction professional looking for advice and support with adjudication, we can help. We are a small, multidisciplinary team of construction claim experts offering construction dispute resolution expertise and a personal approach. 
Call us now on 0330 133 6176 or via email at gnitlusnoc.edisekal%40ecivda for a free, no-obligation discussion with an expert.
This article is intended to give a broad overview of the adjudication process. It does not constitute legal advice. If you require specific legal advice, you should contact our team who can help you based on your circumstances.
[1] Housing Grants, Construction and Regeneration Act 1996 (as amended[2] Scheme for Construction Contracts (England & Wales) Regulations 1998 (SI 1998/649) (as amended)

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© 2022 Lakeside Construction Claims Consultants Ltd.

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We help contractors and subcontractors manage claims and resolve disputes.


Lakeside Construction Claims Consultants LtdCompany Registration: Registered in England, company number 1409155Registered Address: 124 City Road, London, EC1V 2NX

© 2022 Lakeside Construction Claims Consultants Ltd.

All rights Reserved