What is Adjudication?
A brief explanation of what constitutes construction adjudication
An Adjudication is a binding decision on the Parties in a construction dispute, one of whom has referred the matter to the Adjudication process. The mechanism itself it designed to be relatively fast, so giving parties access to quick resolution and avoiding the lengthy delays that can occur in litigation. Adjudications are binding on the parties, however on certain occasion they can be revised through arbitration or litigation.
The process of adjudication will follow a strict timetable. If Parties do not have an agreed procedure within their construction contract, then one is imposed through statute. There are no rights to appeal an adjudicator’s decision.
To be able to enter into adjudication there are a number of points to consider:
- There must be a contract
- carrying out of construction operations;
- arranging for the carrying out of construction operations by others;
- providing his/her own labour, or the labour of others, for the carrying out of construction operations.
- There must be a dispute on the operation of that contract
Section 104 of the Housing Grants, Construction and Regeneration Act 1996 (HGCRA) gives a broad definition of what constitutes a Construction Contract. Prior to the amendment of the act (effective as of 1st of October 2011), the requirement was that the construction contract must be in writing. Since the 1st October 2011 the position is that contracts are formed either verbally or in writing will qualify.
So what is a construction contract?
The definition of a construction contract as provided for by the Act is one that captures an agreement of a person by the following:
As is apparent, the aim in amending the HGCRA was to broaden the scope of services that can be defined as a construction contract.
Section 105 of the HGCRA defined what constitutes a “construction operation” you can find this here.
There must be a dispute between the parties on a matter that arises under the contract.
If it is a matter outside of the contract, or where it is outside the jurisdiction of the contract, then adjudication will not apply and it will be necessary to seek redress via another route.
The definition of what constitutes a dispute (or difference) was set out in Amec Civil Engineering Ltd v Secretary of State for Transport (2004). In this case, Jackson J purported that the word “dispute” should be given its ordinary meaning and has no special or unusual meaning afforded to it by lawyers.
If the above conditions are met then you may be in a position to refer your dispute to Adjudication but before you look to take this step it is worth review the checks that can be found on our checklist.
Once started the adjudication process itself follows a strict timetable ending with the Adjudicator’s binding decision, normally in 28 days from the start of the process (although this can extend to 42 days if agreed).