We want to help clients avoid costly litigation and allow their projects to continue. Our team possesses expert understanding and experience in dealing with construction contract disputes, and are able to support clients through settlement, adjudication proceedings and trial.Where we assess a payment claim to have become due as a notified sum, we offer a comprehensive and cost-effective recovery service including adjudication, if necessary, for the fixed and contingent prices set out here.
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Overview of Adjudication in Construction
The adjudication process was introduced with the UK Housing Grants, Construction and Regeneration Act of 1996, as an informal method of resolving construction disputes without the need to resort to expensive formal court procedures. However, since then adjudication has become more formalised, and parties must serve detailed submissions, expert reports and witness statements.
Despite its formalisation, construction adjudication is still a quick and cost-effective way to settle construction disputes. In normal procedures, the adjudicator’s decision is made within 28 days, unless all parties agree otherwise. A party can refer a single issue to the adjudicator, which can prevent responding parties from relying on a counterclaim.
Adjudicator decisions can be enforced by a summary judgment process in the Technology and Construction Court. In the majority of cases, the losing party accepts the decision and does not arbitrate or litigate. Adjudication is an important tool that should be known to all construction professionals.
If you have received a notice of adjudication, there are several steps you must take. Here are the key actions and considerations you should make to resolve the case.
1. Act quickly.
After you receive a notice of intention to refer a construction dispute to adjudication, within seven days you will also receive a referral notice setting out the details of the referring party’s claim. The referral notice can be lengthy and complex, and you have just seven days to issue your response.
It is important to get legal advice from a specialist construction lawyer or construction claims consultant. Do this as soon as possible, as the time to construct a defence is limited. Your lawyer will be able to tell you whether an adjudicator will have jurisdiction over the issue. They can also answer any questions in general about the process.
It is difficult to get extensions to an adjudication timetable, so contacting a lawyer quickly is essential. Helix Law tries to answer emails and queries within an hour during working hours. Contact us now to find out how we can help.
2. Does the right to adjudication exist?
By issuing a notice of intention to adjudicate, the referring party has exercised their statutory or contractual right to refer a dispute to an adjudicator. However, before engaging in the process you must decide whether this right is justified. This is where a specialist construction lawyer can advise that you should reserve your own right to challenge an adjudicator’s jurisdiction if you are unsure. The more specific your reservation is, the more likely it is to be effective.
You should do this by putting your challenge to the adjudicator’s jurisdiction in writing right away. If the appointment is accepted by the adjudicator, they will give a decision that is binding about the claim within 28 days of the referral notice unless the referring party accepts an extension to the time limit. The decision will be binding unless and until it is overturned by litigation or arbitration – until it is, the parties must comply with it unless they can challenge the adjudicator’s decision.
3. Challenging an adjudicator’s decision on enforcement:
Once the adjudicator has made their decision, it is unlikely that the court will not uphold and enforce it – even if it’s wrong. The philosophy of adjudication is that it’s a quick and easy resolution. Therefore, their decisions should be paid or performed fast. This means you must act upon the decision before challenging it.
4. There are only two ways to challenge an adjudicator’s decision on enforcement.
Arguing that they made an error of fact of law is not a valid ground on which to challenge the decision. The two ways are:
- To argue that a breach of natural justice has occurred;
- To argue that the adjudicator does not have jurisdiction.
If a challenge cannot be made, the party aggrieved by the decision must pay or perform it before beginning arbitration or court proceedings in an attempt to claim back the money. It is only in rare conditions that a party might be able to commence and win a court procedure before they must pay the adjudicator’s decision.
5. Pay now, argue later.
This is the main rule of adjudicator’s decisions. Many people fall foul of this rule and end up paying significant sums for the other side’s legal costs because they have refused to pay the decision. If you refuse to pay, the opposing side can apply to the court to have the decision enforced. They can add a claim for the costs of doing so, which can amount to £5,000-£10,000.
6. Challenging an adjudicator’s decision in proceedings:
If you think the adjudicator got it wrong you can commence court proceedings or arbitration (depending on what your contract says) to get a final and binding decision on the issue in dispute. This will trump the adjudicator’s decision but may take about 2 years to obtain.
7. Get expert advice.
If a challenge is to be maintained against the decision’s ability to be enforced, then it must be raised early in the process. You must also be careful to not waive it by deed or by word.
This means that from the moment the notice of intention is received, everything you do could determine your rights within the process. Sometimes, the referring party does not actually have the right to commence adjudication under the legislation or contract. If you participate then, without exercising your right to challenge the adjudicator’s jurisdiction, you could actually validate an adjudication that was initially invalid.
This is why it’s imperative to secure expert legal advice from Helix Law’s specialist construction solicitors – if you make a wrong move, you could end up needlessly losing a case.
This information is designed to make you aware of the value of gaining early legal advice. It should also emphasise the need to act fast when served a notice of intention. Time limits are often short and inflexible.
Helix Law can fully explain the process and guide you through proceedings. Contact us today for free initial advice.