What is adjudication?
Adjudication is a dispute resolution process to quickly get a decision from an independent third party (the adjudicator) and an order for payment or a decision on an issue such as defects or quality or liability.
The decision is given within 28 to 42 days from the third party receiving the case. The process can be extended further by agreement.
How is the case given to the Adjudicator?
The process is usually documents only which may include photographs or witness statements as well as the original project information. In some cases, a site visit may be agreed or a meeting held (this can be done virtually and so is not affected during COVID restrictions).
Who pays for the process?
Each party must pay its own costs and is not liable for the costs of the other party. The adjudicator charges fees. The usual rate is about £250.00 per hour plus VAT. The adjudicator will normally order the losing party to pay his or her fees and expenses.
Who appoints the third party (the adjudicator)?
The professional bodies and certain other organisations have panels of adjudicators which they will select an adjudicator from and advise the parties of who they have appointed.
Do I need legal representation?
No representation is needed but some understanding of and assistance with the process is recommended. The adjudicator will not be able to help you present your case and so clear presentation and knowing the rules is necessary.
Do I need to appoint someone to conduct the adjudication for me?
No. As a company or an individual you can represent yourself but you may need assistance to help you prepare your case and assistance in the background during the adjudication to assist in dealing with the procedure, questions and correspondence from the adjudicator and rebutting the arguments the other party raises.
Does everyone have a right to adjudicate their disputes?
No but many people in the construction sector do. Adjudication is only available as a statutory right to those procuring or carrying out construction work or professional services in the built environment. If there is no statutory right you can only adjudicate if the contract contains an adjudication clause or if you agree to adjudicate after the dispute has arisen.
How do I know if I have a right to adjudicate?
Most clients, contractors and subcontractors carrying out work in relation the built environment of all descriptions will have a right to adjudicate unless they are in certain excluded sectors. Professionals their clients and sub-consultants will also have a right to adjudicate unless they are in certain excluded sectors. The exclusions are not extensive but they are a bit complicated. Supply only contracts are excluded and contracts with residential occupiers are excluded. In addition, some other process and infrastructure related sectors are excluded.
If the adjudicator decides that I am to be paid money how is that enforced?
Cash flow is the life blood of the industry and the courts have a special process for enforcing adjudicator’s decisions and punitive costs awards against the other party if they have not paid up.
About 90% of adjudicator’s decisions are complied with because the other party knows they are wasting more money by not paying up. If you have to issue proceedings to enforce the decision there will be legal costs. Those costs are recoverable from the other party on an indemnity basis if they are just messing you about.
Tim Willis, our director is a consultant solicitor and solicitor advocate and can conduct enforcement proceedings with the law firm Morgan Phelps.
How has COVID affected the process?
The construction sector is lucky in that unlike litigation or insolvency type proceedings, adjudication and adjudication enforcement can be carried out remotely and by documents. If a meeting or hearing is needed it is done on Teams or Zoom. Documents are transferred electronically (although hard copies may still need to be posted or certain documents couriered.) For adjudication enforcement proceedings the courts have kept to timescales that existed before COVID, unlike general litigation which is now delayed or insolvency business which has been limited.
What services does Willis Consultancy provide?
Our way of working can be flexible to suit your experience and your resources.
- Full preparation, conduct of the adjudication and assistance with enforcement
- Ad hoc assistance in relation to preparation and conduct of the adjudication
- In-house assistance providing support once a problem appears to be arising and advice and support to allow you to conduct the process of adjudication
We act for a broad range of clients including local authority clients faced with adjudication from their contractors where projects have gone wrong, to tier 1, 2, 3 contractors or professional consultants faced with non-payment or other disputes. We act alongside project managers, client teams, contract managers, legal teams or owners of owner managed businesses.
For more information about adjudication the CIC has a guide to adjudication and the Adjudication Society has many resources. The statutory right to adjudicate is contained within the Housing Grants Construction & Regeneration Act 1996 as amended
The rules that apply may be defined in your contract. If they are not or the rules do not comply with the Act the rules contained in the relevant Scheme apply.
Links to the relevant documents are found below.
See our resources page.
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