Construction Disputes Adjudication Guide Expert

A guide to the adjudication process in construction disputes The link has been copied to your clipboard Okay

Article

12 mins read

Updated on 11 April 2025

Our subject expert
Simon Smith

Senior Solicitor - Dispute Resolution

Adjudication is used more often in the construction industry than in any other commercial sector. This is largely because, if you are a party to a construction contract, you have a legal right to use adjudication to resolve your dispute. In this article, ourexperienced commercial property dispute solicitorswill provide you with an overview of adjudication, when it's used, what's involved, and how it can help resolve your dispute.

If you are currently involved in a construction dispute and you need practical legal advice and support contact our commercial property dispute solicitors today. Our team of experienced lawyers will be able to guide you through the adjudication process and resolve your dispute quickly, limiting any disruption to your business.

Is adjudication mandatory in construction contracts? Any party to a qualifying construction contract (which we discuss below) has a statutory right to refer a dispute to an adjudicator at any time. It is mandatory in construction in the sense that one cannot exclude this automatic right from the construction contract. Even if the contract makes no mention of it at all - the right to refer is still implied. Adjudication isn't compulsory - you can choose another method of resolving disputes if you wish. If one party to a qualifying contract initiates the adjudication process, the other party has to participate.

Is an adjudicator's decision binding? Yes - an adjudicators decision is legally binding, but only in the interim. The decision settles the dispute for the time being, pending final determination by a court or arbitrator further down the line.

When is adjudication appropriate? Common construction disputes that adjudication might be appropriate for resolving include those about:

• Non-payment of monies due for particular stages of a development
• Delays to construction - Delays are a frequent cause of disputes, and it's worth being clear on your rights and remedies in these situations. We cover this topic in more detail in our guide on construction delay claims .
• Requests for extensions of time
• Poorly executed and defective work
• Clarification of the scope of a project

Even though adjudication was originally designed to address straightforward issues on an urgent basis, more complex contractual issues and negligence claims can also be resolved this way.

Very often, the matter referred to adjudication is a standalone issue. For example, a dispute might be holding up a particular building project or causing cashflow issues for one of the parties. By accepting the adjudicator's jurisdiction and decision, the parties can keep the project moving without long delays. As mentioned earlier, the adjudicator's decision is usually a temporary fix. It helps the development continue while the parties work toward a more permanent resolution.

If you're currently facing a construction dispute, you might find our practical guide to resolving construction disputes a helpful starting point for understanding your options, including how adjudication fits in.

When is adjudication not appropriate? Not every disagreement is suitable for adjudication. It's important for you to remember that the adjudication process in construction disputes has been developed to provide fast, practical solutions. If a dispute is particularly complex, court proceedings or arbitration may be the more appropriate method to employ.

It is also important to note that, for an adjudication to be valid, the dispute must have crystallised - meaning it is clearly defined and both parties have an understanding of the issue. This can be demonstrated through discussions, or when one party makes a claim and the other either rejects, ignores or does not admit to it. If you initiate arbitration too early before the dispute has fully formed, the other party may argue that no real dispute exists - leading to jurisdictional challenges.

Advantages and disadvantages of adjudication As you now know by now, adjudication is a very popular way of resolving disputes in the construction industry - but it won't necessarily be a suitable method of dispute resolution in every single case. We've set out some of the advantages and disadvantages of adjudication in the table below:

Advantages Disadvantages

Provides a basis for a quick resolution to the dispute. The scheme is geared toward achieving a result quickly. Corners will on occasion be cut and crucial facts may be overlooked.

Minimises disruption to the overall construction project. The successful party won't necessarily recover the costs of the adjudication.

The focus on quick payment following adjudication reduces the chances of contractor insolvency. The 28-day timetable does not give the parties time to examine all the facts in cases of any complexity. Even if the right to adjudicate has arisen because a claim has crystallised, it may simply be too complicated to be dealt with through the adjudication process.

What does adjudication cost? Adjudication is a short process, so exposure to costs is limited. Because each party usually pays its own legal fees, the cost of adjudication can be a significant consideration. It's difficult to be precise about actual costs as each case will depend on its particular facts, but expenditure you should bear in mind includes:

• Adjudicator's fee: Adjudicators charge an hourly rate, usually in the region of £200-£300 plus VAT. A responding party may well have little say over the appointment of an adjudicator or the level of fees. This is because the Referral Notice is issued before the responding party knows what fees the adjudicator is seeking. Each party will be jointly liable for the fees of the adjudicator, so if one side doesn't pay, the adjudicator can claim all of his or her fees from the other.
• Fee to theprofessional bodythat nominates the adjudicator.
• Fees to yourprofessional advisor: this constitutes payment to a specialist construction lawyerto advise you throughout the process. It's unlikely that you will be able to recover these fees, even if you are successful in the adjudication.

How do you know if you have a construction contract? The right to adjudication we are examining here only applies to 'construction contracts' that arein writing. The Construction Act describes a construction contract as an agreement to do any of the following:

• Carrying out construction operations
• Arranging for construction operations to be done by others; for example, by using a subcontractor
• Providing labour for construction operations

'Construction operations'is a broad term, which covers everything from building, maintenance, demolition or the repair of temporary or permanent buildings.

Is it always obvious when a construction contract is in existence? In many cases, it's obvious whether or not an agreement classes as a construction contract. If you're uncertain, it's smart to get specialist legal advice early on. This helps you understand your options for resolving disputes and avoids the risk of running up high legal costs later.

For example, in the case of Savoye and Savoye Ltd v Spicers Ltd 2015 , the parties spent a huge £400,000 in legal fees just to determine that what didn't initially seem like a construction contract actually was - meaning it could go through the adjudication process.

One last thing to keep in mind: even if your agreement isn't legally classed as a construction contract, you and the other party can still agree between you to use adjudication.

Can you refer more than one dispute to the adjudicator? The general rule is that only one dispute can be referred to the adjudicator at a time. That's why it's really important, before starting adjudication, to figure out whether you're dealing with a single dispute or multiple disputes.

If there are multiple disputes, you'll need to check the contract terms. Some contracts allow you to combine multiple disputes in one adjudication, while others require each dispute to be dealt with separately.

If it's one dispute with several sub-issues, you'll need to be extra careful when drafting the Notice of Adjudication and the Referral Notice. It's important to show a clear connection between the sub-issues - otherwise, it could be seen as referring multiple disputes to the adjudicator.

What documents and evidence do I need to submit during adjudication? Unlike litigation, there are no formal rules surrounding evidence and disclosure for adjudication. As we know, it is meant to be a quick solution with only 28 days for the adjudicator to issue his decision. Drowning the adjudicator in paperwork can make it harder to get to the bottom of the key issues. At the same time, you need to back up your argument with facts and evidence to demonstrate the merits of your case and secure a successful outcome. It's all about striking the right balance and presenting a succinct but compelling case. It helps to organise your documents into a paginated bundle with tabs for easy reference and cross-refer to the relevant pages within your main statement.

In terms of what documents you need as a referring party, this includes:

Notices
Notice of Adjudication: this is the initial document that starts the adjudication process and informs the other party that you are referring a dispute . click apply for full job details