Adjudication can cover a wide range of matters, including the validity of payment claims, entitlement to variations and extensions of time, breaches of contract and damages for defective work
Adjudication 101 – putting your best foot forward in a dispute – By Tamzin Dempster and Stephanie Panzic
The continuing ‘construction boom’ has been far from smooth sailing for construction companies. Disputes are on the rise, not only as a result of the risk profiles being taken on by contractors, but also due to shifting attitudes toward disputes and dispute resolution.
More and more contractors and subcontractors are finding it difficult to resolve disputes on their own, and the first port of call for many is adjudication
under the Construction Contracts Act 2002 (CCA).
Both sides to an adjudication can expect to spend a huge amount of time, energy and cost in seeing the process through. However, in most cases this pales in comparison to more formal dispute resolution procedures such as arbitration and court. Adjudication is therefore an increasingly popular choice for construction disputes.
In this article, we outline what this process looks like and how you can use it to your advantage.
What is adjudication?
Adjudication is a dispute resolution process under the CCA, specifically tailored for the quick resolution of construction contract disputes.
An adjudication is initiated with a notice of adjudication, and is shortly followed with two exchanges of submissions of written evidence and supporting documents, all of which is put before an adjudicator who has up to 30 working days to make a determination on the dispute.
Adjudication can cover a wide range of matters, including the validity of payment claims, entitlement to variations and extensions of time, requirements for practical completion, breaches of contract, breaches of implied warranties under the Building Act 2004, and damages for defective work.
An adjudicator will be guided by expert statements, legal submissions and supporting documents to determine the dispute. The determination he or she reaches will be binding on the parties, although avenues to take the dispute remain open if a party wishes.
A feature which distinguishes the adjudication process from other procedures is the tight timeframes the parties have to respond to allegations made. Usually, a respondent will have only five working days to prepare its defence.
Who can adjudicate?
Any party to a construction contract has a statutory right to use the adjudication process, provided two criteria are met: first, that there is an existing dispute or difference, and second, that the dispute relates to a construction contract, as defined by the CCA.
The requirement for there to be an existing dispute or difference protects respondents from having to quickly respond to claims with no prior warning. The usual way to establish the existence of a dispute is through the payment claim, payment schedule procedure set out in the CCA, or through formal decisions of the engineer to the contract.
A construction contract is a contract for carrying out construction work. Construction work involves almost all kinds of building, installation, maintenance, civil, and demolition work. Adjudications may be brought in respect of many types of construction work, be it earthworks and civil works, large commercial buildings, smaller residential builds or renovations, and even engineering design work.
Tips for a successful adjudication
Tip 1: Get organised
A party which fails to maintain written project records throughout the course of a construction project (whether claimant or respondent) will always be on the back foot.
Although written witness statements from the individuals involved are helpful evidence, an adjudicator will struggle to accept bare assertions without contemporaneous supporting documents. Being able to quickly produce an email recording agreement to a variation, or a site diary note recording a delay event, can make a huge difference in an adjudication.
Tip 2: Consider your adjudicator
The first step is to diagnose your dispute. Is it a heavily legalistic dispute, requiring an adjudicator with a strong grasp of case law and contractual interpretation? Or, is it a largely technical dispute, requiring an adjudicator with engineering expertise or first-hand experience of managing a construction site?
The second step is to know your options. Knowing the strengths and experience of those available as adjudicators, as well as the various nominating bodies for the selection of adjudicators, will enable you to target those who will be equipped to properly determine your case.
Tip 3: Get help
The same diagnostic exercise described above should also reveal to you what external help you need. In all adjudications, the process will be greatly assisted by a legal advisor who can navigate procedural matters, prepare legal submissions and written evidence, and collate relevant documentation.
Most adjudications involve a combination of legal and technical issues. An adjudicator will be drawn to independent evidence from industry experts such as geotechnical and structural engineers, quantity surveyors, programme and delay analysts, and weathertightness experts.
Even if this expertise exists within the parties’ organisations, it is the independence of the expert which gives their evidence added credibility. If faced with a claim which involves independent expertise, a respondent takes an enormous risk if it does not respond with the same.
This article is not a substitute for tailored and independent legal advice. If you have any questions about this topic, contact the writers
Tamzin Dempster and Stephanie Panzic are solicitors within the construction law team at Kensington Swan