Adjudication is an alternative form of dispute resolution and is the default dispute resolution process within the construction industry. It is an option for dispute resolution in all construction contracts whether or not it is specifically mentioned in the contract.
In this article we consider the advantages and disadvantages of this process.
Pros of adjudication:
Adjudication has a number of advantages to court proceedings or other forms of dispute resolution.
- Adjudications have a 28-day time scale, which means it is a quick way to resolve disputes. It should be noted, however, that this deadline can be extended with the consent of both parties.
- As a result of this tight timescale, adjudication is usually cheaper for parties than litigation. Note, however, that the costs involved in instructing solicitors or other professionals cannot be recovered, regardless of the outcome.
- Adjudication can resolve a dispute whilst the contract is ongoing, rather than waiting until the end of the project and embarking on litigation.
- In contrast to litigation, an adjudication decision is private, unless the decision of the adjudicator is ultimately the subject of enforcement proceedings raised in court.
- The decision maker is someone experienced in construction disputes – usually a quantity surveyor or engineer.
Cons of adjudication:
Despite the advantages of adjudication, there are a few disadvantages to bear in mind.
- In terms of expenses, adjudication costs are not usually recoverable. This means that the responding party cannot recover their associated professional costs (most obviously, legal costs) from the referring party, as they could do in a litigation or arbitration.
- Because a dispute can be referred ‘at any time’, they can come from out of the blue and the opposing party can feel ‘hijacked’, especially where the dispute is high value and complex. This is generally avoided in litigations.
- Although the short time scales of the adjudication process have many advantages, it can mean that parties have a very limited time in which to investigate the claim and prepare their response. This can lead to a rushed decision which neither party is happy with.
- Despite the fact that Courts will generally uphold adjudicator’s decisions, there is considerable scope for the responding party to create mischief by arguing that the decision is unenforceable, meaning that costly enforcement proceedings need to be raised through the Courts.
If you’re considering adjudication, get in touch
Overall, adjudication provides a quick and low-cost alternative to litigation, for parties who need a fast resolution of their dispute. Adjudication has been successfully used as a form of ADR in the construction industry for many years and crucially, allows parties to continue the project whilst a decision is reached.
If you are considering starting an adjudication, please get in touch and we will consider whether your claim is one which our panel firms may be able to pursue on a no win no fee basis.
