Adjudication
If a court claim is a marathon, adjudication is a 100-metres sprint. So, if you’ve received a Notice of Adjudication, you need to be out of the blocks fast or the race will run away from you.
We act for both claimants and defendants. Whether you’re an employer or a contractor, we can guide you through the process and help minimise the stress and uncertainty. But please don’t delay in seeking expert legal advice. Because once the starting gun has been fired, the adjudicator’s decision will soon come thundering down the track.
For a confidential and free discussion, call us today on 01908 414990. Alternatively, email us at Hello@altion-law.co.uk or complete our Free Enquiry Form and we will call you back.
What Is Adjudication?
Adjudication is a fast-paced form of dispute resolution that’s usually a far cheaper alternative to litigation or arbitration. It’s built into (most) commercial construction contracts and is not something you can contract out of.
A key aspect of adjudication is its tight 28-day timeframe. This is designed to make sure work can continue while the dispute is being resolved. Companies can refer their disputes to adjudication at any time, which gives them an opportunity to speedily resolve issues that might otherwise jeopardise or disrupt the completion of the contract.
What Are The Costs?
As with mediation, each party usually bears their own costs.
Generally speaking, adjudication is a far cheaper alternative to litigation. Most of the time, the costs will be lower than taking the same dispute to court or arbitration.
In some cases, however, it may be more cost-effective to bring a claim in the Technology and Construction Court (TCC). We can advise you on your best course of action.
How Long Does Adjudication Take?
Typically, the adjudication process is completed within 28 days, although the parties can agree to extend this. It has strict timescales. Here are the stages:
1. Notice Of Adjudication
A company starts the process by sending the other party a Notice of Adjudication. This is a short document that sets out:
- The nature of the dispute
- Who the parties are
- How the dispute arose
- Details of the contract between the parties
- The remedies being sought from the adjudicator
2. Notice Of Referral
Once the Notice of Adjudication has been sent, an adjudicator is then appointed. Within 7 days of the Notice of Adjudication, the party starting the adjudication process must serve a Notice of Referral to Adjudication.
The Referral Notice sets out in detail the referring party’s claim. It should also include relevant documents.
Note that the party launching the adjudication process can choose to send their Referral Notice at the same time as the Notice of Adjudication. That means, as the responding party, you may find the adjudication process starts sooner than you expected. That’s why it’s vital to seek expert legal advice as soon as you suspect the possibility of a referral to adjudication.
3. Response To The Referral
Once the adjudicator has been appointed, they will set the timetable. However, as a general rule, the Response to the Referral is required within 7 days of the Referral Notice. In some cases, the adjudicator may grant a request to extend the deadline to 14 days.
4. Adjudicator’s Decision
Once the Referral Notice has been sent, the Adjudicator has 28 days from the date of the Referral to issue their decision. In some cases, this period can be extended, but any extension will not usually be for more than 14 days.
Don’t Delay Seeking Advice
If you have received, or suspect you are about to receive, a Notice of Adjudication, act fast. Seek legal advice straight away. Remember, it’s likely the other side will have been preparing for some time, so you don’t want to be on the back foot for long.
Which Disputes Can You Refer For Adjudication?
Adjudication works well for resolving claims relating to:
- Interim payments
- Delay and disruption
- Extensions of time for completion
- The final account
Depending on the circumstances of the dispute, it may be possible to use adjudication for matters such as breach of contract, termination, or professional negligence. However, as the adjudication process was not originally designed with complex claims in mind, it’s sensible to take specialist legal advice to make sure adjudication is, in fact, your best option.
Points to bear in mind when considering adjudication:
1. The Need For A Clear Dispute
Before adjudication can begin, you need to be able to say that there is a dispute that has “crystallised”. What does this mean? One party has put forward its position and the other has expressly rejected it. Alternatively, enough time has passed that it can be inferred that they have rejected it.
2. The Rule Of One
An adjudication should only deal with a single dispute at a time. So, if you have a large and complex dispute, it’s important to analyse whether there is one single, overriding dispute (made up of separate elements), or whether there are in fact separate disputes – which could each be separately referred to adjudication.
3. One Shot
A dispute can only be adjudicated once. There are no second bites at the cherry. If a dispute has already been adjudicated and you want to overturn the decision, you would need to refer the dispute to arbitration or the Technology and Construction Court (TCC). However, you would only be able to do this if your contract permits it.
We’ve seen instances where Party A tries to appoint an adjudicator but Party B challenges this on the basis that the dispute has already been adjudicated. What often happens is the adjudicator resigns … but not without sending Party A their bill.
4. What The Contract Says
Pay close attention to what the contract says about adjudication. Does it stipulate that an adjudicator must be appointed by a particular nominating body? For instance, if it says an adjudicator must be appointed by RICS, you can’t just ignore this and ask the CIOB to appoint someone instead.
Our Adjudication Experts
Altion Law’s commercial construction team is headed up by Anthony Galvin. With a background in construction, Anthony has a keen appreciation of how the sector functions on a commercial level and is highly experienced in dealing with all areas of construction disputes, particularly those centring on contractual payments. He has many years’ experience in adjudication and other methods of dispute resolution and has succeeded in obtaining millions of pounds for his construction clients.
Case Studies
Knowing what’s suitable and what’s not suitable for adjudication can save you a lot of money. Whichever side you are on.
Case Study 1: How We Batted Away An Unnecessary Adjudication
When an adjudication was started against a recent client, we reviewed the position and challenged the jurisdiction. This avoided our client incurring costs on an unnecessary adjudication. We then managed to settle the dispute amicably. The result was the other side was out of pocket but our client wasn’t.
Case Study 2: How We Stopped Our Client From Wasting Money
A client came to us asking for help with a ‘smash-and-grab’ adjudication. Upon reviewing the position, however, we found they had made some fundamental errors. If they had launched an adjudication, they would inevitably have lost.
Our advice helped our client protect their position and prevented them from wasting significant sums of money on a course of action that was doomed to failure.
Altion Law are specialists in advising and representing parties on commercial construction contracts, claims and disputes.
For a confidential and free discussion, call us today on 01908 414990. Alternatively, email us at Hello@altion-law.co.uk or complete our Free Enquiry Form and we will call you back.
