Common Queries / FAQ

  1. What is Adjudication?
  2. What is
  3. Which industries are affected?
  4. What disputes can be adjudicated?
  5. Who pays for the adjudication?
  6. What is the Scheme for Construction Contracts?
  7. When is the Decision given ?
  8. How is the Decision enforced ?

What is Adjudication ?

  1. Adjudication is a statutory procedure by which any party to a construction contract has a right to have a dispute decided by an adjudicator
  2. It is intended to be quicker and more cost effective than litigation or arbitration
  3. It is normally used to ensure payment (although most types of dispute can be adjudicated)
  4. The Adjudicator must generally decide the dispute in less than 42 days
  5. The decision is binding and is usually upheld by the Courts.
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What is ? has been formed to promote the development of adjudication as a means for resolving disputes quickly and cost effectively.

Members of the Committee and their firms can provide the full range of adjudication services including nomination, advice to the parties and assistance to the adjudicator.

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Which industries are affected ?

The scope of adjudication is set out in the provisions of the Housing Grants, Construction and Regeneration Act 1996.  It applies to contracts concerning:

  1. The Construction Industry
  2. The Telecommunications Industry 
  3. Installation of Security Systems

It also includes contracts for professional services within the above.

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What disputes can be adjudicated ?

The scope of adjudication is set out in the provisions of the Housing Grants, Construction and Regeneration Act 1996.  It applies to Construction Contracts entered into after 1 May 1998.

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Who pays for the adjudication ?

This depends on the terms of the contract.  Most standard form contracts and adjudication rules  provide that the parties cannot recover their own costs in the adjudication.  Neither party can claim any fees incurred by lawyers, experts or anyone else who helps prepare his case. Both parties are jointly and severally liable for the adjudicator’s fees.   In common with the Scheme, standard forms usually provide that the adjudicator can decide who is to pay his fees and reasonable expenses by apportionment between the parties in his decision.

Usually, the successful party is not required to pay the adjudicator’s fees but should an unsuccessful party refuse to pay the adjudicator’s fee he can lawfully claim the fee from the successful party.  The Scheme is silent on the parties' own costs.  It has now been decided that although there is no implied term that the adjudicator may decide on payment of the parties costs, he can be given the power to do so in the adjudication, e.g. by both parties claiming their costs. 

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What is the Scheme for Construction Contracts ?

The Housing Grants, Construction and Regeneration Act provides, at Section 108 of Part II, that a Construction Contract must embody eight principles concerning the right to adjudication.  If the contract does not comply with Section 108 then any adjudication provisions in the Contract (with the exception of the naming of an adjudicator or adjudicator nominating body) are ignored and the Scheme applies.

The Scheme for Construction Contracts is a set of rules which includes all eight principles and will automatically apply to any Construction Contract which omits even one of these. The Standard forms of contract generally include all of the principles.  The Scheme will therefore usually apply to non standard forms or ad-hoc agreements, provided they are at least evidenced in writing and fit the description of a Construction Contract contained in the HGCRA.

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When is the Decision given ?

The Adjudicator must give his decision within 28 days of the referral, extended to 42 days with the agreement of the referring party and extended to any period by agreement between the parties.

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How is the Decision enforced ?

The Adjudicator's Decision is binding on the parties until the dispute is finally decided by arbitration (if provided for in the contract or agreed to), litigation or agreement.  Because it is binding the Courts will enforce the decision in summary proceedings.  Generally the only defence to such proceedings is that the Adjudicator's decision was made outside his jurisdiction.

The unsuccessful party is required by law to pay a sum of money awarded by an adjudicator. A period of grace is often provided for when the Decision is made so as to allow the paying party to obtain the money. However, if the unsuccessful party does not pay when required, the successful party may make an application in court to have the adjudicator’s Decision turned into a court order by means of summary judgment. Thereafter, continued refusal to pay will mean that, upon further application to the court, the money may be directly recovered from bank accounts or a charge levied against certain assets such as property and shares.

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