Well, it stands for alternative dispute resolution. However, it might not mean the same thing to everyone.
However, the most common form of ADR in England is now undoubtedly adjudication. So, what is adjudication and how do you use it? To start with you need to ask the following questions.
- Are you eligible to adjudicate?
- What type of dispute gets referred to adjudication?
- What specifically do you have to do to start an adjudication?
Adjudication is a short process, which typically lasts between 28-42 days (from the date of issuing the referral notice). Each side can make a series of submissions throughout the adjudication. However, it is different in that the successful party cannot recover their costs from the unsuccessful party and the unsuccessful party is usually made to pay the adjudicator’s fees.
A well drafted contract should have an adjudication provision. You must also have a ‘Construction Contract’ as defined by Section 104(1) of the HGCRA 1996.
The dispute that is referred must have ‘crystallised’ (i.e., it is a dispute which both parties have knowledge about), and it must have arisen under the Contract.
However, if you have a contract that is evidenced in writing that is enough, even if you do not have a formal signed contract in place.
The definition of what is a dispute is complex and lengthy. The definition is best summarised as being.
- The word ‘dispute’ should be given it’s ‘normal meaning’.
- When determining whether a dispute has arisen, useful guidance (but not concrete legal rules) can be sought from case law.
- The claimant notifying the responding party of the dispute is not enough in itself to mean a dispute has formed. The responding party must have at least not admitted the claim for there to be a ‘dispute’.
- The ways in which a claim can be not admitted are ‘protean’. This can include an express rejection of the claim, discussions between the parties which infer that there has been a rejection, evasive responses to a claim, silence from the responding party, etc.
- If a party does remain silent, then the amount of time they can remain silent until a dispute can be deemed to have arisen will depend on the facts of the case and the contractual structure. If the claim is well known, then a short amount of silence will suffice. If the claim is referred to an agent who is legally bound carefully to consider the claim, then give a detailed response, then the amount of time which the responding party is allowed to be silent will be longer.
- Where the claimant lodges the claim with the responding party and gives a specific deadline, the responding party’s inability to adhere to this deadline will not automatically mean a dispute has arisen. However, the court will consider the deadline and any relevant reasons the claimant may have when deciding whether the deadline was reasonable or not and what would be a reasonable deadline to respond by.
- If the claim is so nebulous and ill-defined that the responding party would struggle to respond to it, then neither silence nor an express non-admission to the claim is likely to give rise to a dispute for the purposes of adjudication.
But what are the most common type of disputes that are referred?
These can once again be divided up into several different types.
- Breach adjudications where a party has failed to serve, usually, a pay less notice validly or on time.
- Non-payment by the responding party to the referring party.
- Disputes over whether or not the payment provisions in the Contract have been complied with.
- Disputes over extensions of time (and the notices associated with this, e.g., Non-Completion Notice).
- Valuation adjudication – this is typically where the referring party disputes the value of the work which the responding party claims, or the referring party disputes the fact a pay less notice was served against them in some way (usually the fact they do not agree with the amount which the responding party was going to ‘pay them less’).
These disputes typically arise for a couple of reasons:
1 – The contract provisions have not been followed properly.
2 – The referring party disputes the amount of work the responding party claims to have done.
Okay so you have a contract, you have a dispute, but how to start?
If you have a construction dispute, then the first thing you will need to do is file and serve a Notice of Adjudication on the responding party. However, a notice of adjudication must refer to one dispute only.
After the Notice of Adjudication has been issued, you must make an application to the appropriate body for the appointment of an adjudicator. There are a number of these, e.g., the RICS, RIBA, TeCSA and each has their own appointment form and fee. But note that the adjudicator must be appointed within 7 days of the notice of adjudication being served. Then you must serve a Referral Notice after the adjudicator has been appointed. Do not forget that the appointment of the Adjudicator and service of the Referral Notice should both be done within 7 days of serving the Notice of Adjudication.
As can be seen adjudication has strict timescales and specific procedures that must be followed.
The Decision will generally be issued 28 days from the service of the Referral Notice, although there are grounds on which that can be extended.
The best advice in relation to adjudication is to get help early. That does not have to be from a solicitor, although that would be ideal, but perhaps a quantity surveyor if not.
Do not take steps or do things in relation to adjudication, whether during the course of a contract or after, without understanding the process and obligations. If you fail to serve a notice or do not include the correct information, that may be fatal to a later claim.
At Barton Legal we have all the skills and experience necessary to guide you successfully through the complexities of all alternative dispute resolution processes, including Adjudication. If you need any support or just have a question, please do not hesitate to get in touch
Bill Barton Construction Director
0113 202 9550