Frequently Asked Questions
- What is adjudication?
- When can I go to adjudication?
- Can I go to adjudication if there is no reference to adjudication in my contract?
- Can I manage the adjudication in house or should I seek professional advice?
- How do I nominate an adjudicator?
- How much does adjudication cost?
- Who pays for the adjudication?
- Can I use adjudication if my client is a homeowner?
- What should I do if I receive a Notice of Adjudication?
- Can I adjudicate on more than one dispute at a time?
- What is the difference between adjudication and arbitration?
- How do I start adjudication?
- What happens after the Notice of Adjudication has been issued?
- What happens if the other party raises a jurisdictional challenge?
- What do I do if the other party doesn’t comply with the adjudicator’s decision?
- What can I do if I am dissatisfied with the adjudicator's performance?
What is adjudication?
Adjudication is a quick and cost effective way of resolving disputes in the construction industry, whereby an impartial third party decides the issue between the parties. The decision reached by the adjudicator is binding and enforceable unless and until it is overturned by a higher authority such as an arbitrator or the courts. The adjudication process generally takes 28 days unless the parties agree to extend this period.
When can I go to adjudication?
Under the Housing Grants, Construction and Regeneration Act 1996 (commonly referred to as the Construction Act), you have the right to refer a dispute arising under a construction contract to adjudication at any time. However, the dispute must have ‘crystallised’ which means you should have raised the issue with the other party and both of you have taken a position on it before going to adjudication. If there is no ‘dispute’, the adjudicator will not have the power or ‘jurisdiction’ to decide the issue.
It is always advisable to try to resolve the dispute through discussion and negotiation with the other party before referring it to adjudication.
Can I go to adjudication if there is no reference to adjudication in my contract?
To comply with the Construction Act, your contract must contain certain adjudication provisions. If your contract does not contain all of these provisions or there is no reference to adjudication at all, you can use the ‘fall back’ adjudication procedure in the Scheme for Construction Contracts - www.opsi.gov.uk/si/si1998/19980649.htm
Can I manage the adjudication in house or should I seek professional advice?
Even ‘simple’ disputes need proper care and attention if you are to be successful in adjudication. Good preparation and presentation of your case will assist the adjudicator in deciding the strength of your arguments and you should allocate sufficient in-house staff time to put together submissions. If you decide to employ third part support, make sure it is used appropriately e.g. to give advice or offer a view on documents prepared in-house.
AICA provides access to a list of party representatives that can provide support with your case for a fee - www.aica-adjudication.co.uk/representatives.asp.
How do I nominate an adjudicator?
Check your contract to see if a particular adjudicator or Adjudicator Nominating Body (ANB) has been named. If no adjudicator or ANB is specified, you can approach an ANB of your choice.
AICA is a leading ANB with a panel of top adjudicators dealing with disputes ranging from £10,000 to over £1 million.
How much does adjudication cost?
The cost of the adjudication will depend on the size, nature and complexity of the dispute. There are three cost elements to an adjudication in addition to the cost of your in-house time spent preparing your case:
- The fee and expenses of the adjudicator usually charged at an hourly rate
- The cost of any professional or legal advice sought
- The ANB nomination fee
AICA charges a nomination fee of £300 (no VAT) with free nominations for NSCC members.
Who pays for the adjudication?
Adjudication is usually relatively inexpensive when compared with other forms of dispute resolution. The adjudicator will generally determine in his decision who pays his fee and expenses and in what proportion. This is usually the unsuccessful party; however, both parties are jointly and severally liable for the adjudicator’s fee and expenses so, if the unsuccessful party becomes insolvent and refuses to pay, the adjudicator can lawfully claim what he is owed from the successful party.
Contracts generally provide that the parties cannot recover their own costs in the adjudication nor claim any professional or legal fees incurred in the preparation of their case. So called Tolent clauses which require the referring party to pay all the costs of the adjudication including the other party’s costs have now been outlawed following a recent court judgement.
Can I use adjudication if my client is a homeowner?
If your contract is for work on a dwelling which your client intends to occupy as his residence, you will not be able to refer a dispute to adjudication unless the contract includes an adjudication provision which has been specifically agreed with the client. With the consent of your client, you can use the Consumer Adjudication Scheme as promoted by the JCT in its Homeowner Contracts. The JCT Consumer Adjudication Scheme is capped at £95 per hour up to a maximum of 10 hours.
What should I do if I receive a Notice of Adjudication?
Don’t ignore it! If a notice of adjudication is issued against you, you should notify your insurers immediately and seek legal advice as appropriate.
Can I adjudicate on more than one dispute at a time?
It is possible to start any number of adjudications to run concurrently. However, you can only refer one dispute in each adjudication so, if you have more than one dispute on a contract, you will either have to get the other party to agree to combine them all in one adjudication or start multiple adjudications.
What is the difference between adjudication and arbitration?
Adjudication is a quick and relatively inexpensive process which is usually completed in around four to six weeks. Arbitration is an alternative to going to court so it is likely to be a more formal, lengthy and expensive process than adjudication. There is also a risk (as with going to court) that you may be liable for the other party's costs. You can only go to arbitration if your contract provides for it, whereas you generally cannot be prevented from undertaking an adjudication.
How do I start adjudication?
To initiate the adjudication process, you must serve on the other party written notice of your intent to refer the dispute to adjudication. The ‘Notice of Adjudication’ defines the issue that the adjudicator will consider, so it is essential to make sure that it includes all the key points as well as the remedy you are seeking. As a rule, the Notice of Adjudication should include the following information:
- Details of the contract
- Description of the dispute
- Details of where and when the dispute arose
- The remedy sought
- The names and contact details of the parties to the dispute.
What happens after the Notice of Adjudication has been issued?
Once the Notice of Adjudication has been issued, you have 7 days in which to appoint an adjudicator (either direct or using an ANB) and submit your Referral. The Referral is a clear statement of your case, containing all the information that you wish the adjudicator to consider. The 28-day period for the decision will start on the date that the adjudicator receives your Referral and the other party will usually be required to submit a Response to your Referral within 7 to 14 days.
What happens if the other party raises a jurisdictional challenge?
Throughout the adjudication, it will be helpful if you can anticipate the other party’s reaction at each stage. If a jurisdictional challenge is raised, the adjudicator will make a decision on whether or not to proceed with the adjudication. You should try to prevent the adjudication timetable from slipping by submitting your Referral and any other information within the required time.
What do I do if the other party doesn’t comply with the adjudicator’s decision?
Assuming the decision is in your favour, you can enforce it by going to court and applying for ‘summary judgment’. Adjudicators’ decisions are usually enforced by the courts and the process should take no more than 28 days including a short hearing of up to half a day (depending on the number of issues raised). The cost of enforcement is generally low and, if you are successful, you should be able to recover about 70% of your legal costs from the other party, provided they have the means to pay. If you are considering enforcement, you are advised to seek legal advice.
What can I do if I am dissatisfied with the adjudicator’s performance?
If you are dissatisfied with the conduct or service received from an adjudicator nominated by AICA, please contact the AICA office. AICA operates a Complaints Procedure for parties wishing to make a complaint about the performance of an adjudicator on its panel (acting in pursuance of their nomination by the AICA), a Director of the AICA or a member of its staff. It should be noted that AICA has no authority or role to play in any ‘review’ of an Adjudicator’s Decision so as to correct or modify its effect and the Adjudicator’s Decision will be binding unless enforcement is refused by the Court.