What is adjudication?
This is a specialist form of dispute resolution for construction contracts which was introduced by the Housing Grants, Construction and Regeneration Act 1996 (the Act).
A third party ‘adjudicator’ provides a decision in 28 days (which can be extended by a further 14 days) which is binding until it is enforced via litigation or arbitration.
Can I adjudicate?
A well-drafted construction contract should contain an adjudication provision, providing authority for commencing an adjudication and setting out the process. This is known as ‘contractual adjudication’.
If your contract does not contain an adjudication provision, you can still adjudicate under Section 108 of the Act, if you meet the following criteria:
1. You must have a ‘Construction Contract’
A ‘Construction Contract’ is defined under Section 104(1) as:
- the carrying out of construction operations;
- arranging for the carrying out of construction operations by others, whether under sub-contract to him or otherwise; and
- providing his own labour, or the labour of others, for the carrying out of construction operations.
2. The dispute must have ‘Crystallised’ i.e. can it be said that both parties know about the dispute? Case law has held that even if the other party to the dispute ignores the claim, it can still be said that the dispute is known to both parties.
3. The dispute must have arisen under the Contract i.e. be directly attributed to a contract provision. An example of this would be, has the Contractor been paid by the Employer as per the agreement?.
This is known as ‘statutory adjudication’.
What are the benefits of adjudication?
Adjudication avoids the need for expensive, lengthy court processes, allowing for the quick determination of a dispute. Adjudication also ensures that both parties are on an equal footing and neither party is at a disadvantage based on their financial position, as previously, many construction companies were unable to meet the upfront legal fees needed to recover their money.
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Frequently asked questions
Many adjudications now take place entirely online, with submissions made via email and hearings taking place ‘virtually’ over conferencing technology such as Skype Business, Zoom and Legalconnect.
Barton Legal are experienced in virtual hearings, and were involved with the Technology and Construction Court’s first ever wholly remotely held trial. For more information on virtual hearings see- https://www.bartonlegal.com/site/construction/siteconstructionremotehearings/
There are 2 most common routes taken by parties:
1. The successful party issues enforcement proceedings in the Technology and Construction Court.
2. The parties accept the decision, agree to be finally legal bound and pay the sums detailed in the adjudicator’s decision.
The TCC will generally not interfere with an adjudicator’s decision unless the adjudicator had no jurisdiction when making their decision, or there was a material breach of the rules of natural justice.
Arguments regarding the adjudicator’s jurisdiction may take different forms but commonly relate to the requirements of Section 108, such as arguments that there was no ‘construction contract’ in place. Barton Legal have successfully defended such arguments.
Arguments relating to breaches of natural justice are quite complex and may involve allegations that the adjudicator failed to consider a key piece of evidence when making their decision. The case of J Rhatigan & Co (UK) Ltd v Rosemary Lodge Developments Ltd, shows us that there is a high threshold to successfully prove a breach of natural justice and that courts will usually enforce adjudication decisions.
Enforcement proceedings require a detailed knowledge and understanding of the process, the way in which to make the application and what information and documentation will be relevant to the Court. We have enforced adjudicators’ decisions and acted for clients in defending and avoiding enforcement proceedings.
Barton Legal acted in the leading case of Pioneer Cladding Ltd v John Graham Construction Ltd on resistance of enforcement and can advise and assist parties on all aspects of enforcing an adjudicator’s decision.
At Barton Legal we have all the skills and experience necessary to guide you successfully through the complexities of both the adjudication and enforcement processes.
Adjudications are quick, demanding and technical, so it is important that you receive expert counsel to ensure you get the best result.
Barton Legal have vast experience of both running claims (for the ‘Referring Party’) and defending claims (for the ‘Responding Party’).
We understand the way in which the payment dates are calculated, what notices to serve or should have been served and when. We can advise on how to draft an effective Notice of Adjudication and how to respond if such a notice is served upon you.
Based on our time spent in the industry, we have a thorough understanding of the approach of different adjudicators and their key considerations and requirements, so can provide you with expert advice on the next steps in the process and the best route to take. Our expertise provides security and certainty.
We can also make sure that if you need expert assistance from counsel, quantity surveyors, architects or engineers we can instruct the right person, based on: experience, technical knowledge, appropriate to the size and nature of the claim. We know many highly commended experts in the industry and are happy to recommend expert assistance applicable to your case.