What is Adjudication ?
Adjudication may be an option open to you if you are a party to a construction contract and have a dispute over that contract. It is intended to be a quick and efficient way to resolve such disputes.
How does adjudication work ?
The “referring party” starts the process by serving on the other party a notice of its intention to refer the dispute to adjudication. This is an important document as it sets out the dispute to be decided by the adjudicator.
The notice must certain information such as, a brief description of the contract, names and addresses, etc; an account of the dispute itself and what it is about, for example, non payment of an invoice; and an account of what is being claimed.
The notice of adjudication should generally cover just one dispute unless the parties agree that various matters should be dealt with. It is important that the notice is clear in what it being claimed to avoid challenges being made to the notice.
Who is the adjudicator ?
The parties are to appoint an adjudicator within 7 days of the notice of adjudication. To ensure that it proceeds smoothly it can help if the request is sent to the proposed adjudicator at the same time as the notice of adjudication is sent to the responding party.
- The contract might name a specific adjudicator. If so, the parties would have to ensure that he or she will be able to deal with the dispute within the relevant time.
- Alternatively, the contract might say that a professional body nominates someone. If so, the parties will need to request that an adjudicator be appointed and that request must be accompanied by a copy of the notice of adjudication.
- If either party objects to the appointment of an adjudicator, written notice should be given with reasons. The parties can also object if it is felt that the adjudicator does not have jurisdiction to determine the case.
This where the referring party sets out the legal and factual basis of its claim. This should also include relevant documents relied on for example the contract, invoices, letters, e mails, etc
Response to the Referral Notice
This is for the opposing party to set out the detail of its defence by reference to the claim made. It can also refer to documents which have not previously been disclosed in the Referral Notice although most of the relevant documents should be attached to the claim.
There is no automatic right to a further reply to but it can be appropriate depending on the circumstances and the complexity of the case.
It is rare that the adjudicator will hold an actual hearing. Although in complex cases or where there are large legal or factual differences between the parties, the adjudicator might feel that a hearing is necessary. This could also include independent expert evidence if necessary.
The Adjudicator must give the decision within 28 days of the Referral Notice and must give reasons if asked to. The adjudicator must decide the matters in dispute and may take into account other matters which the parties agree should be dealt with as part of the adjudication or which are connected with the dispute. The parties must comply with the decision immediately, unless the adjudicator sets out a different time period for compliance.