UK: Adjudication Under The Housing Grants Construction And Regeneration Act

Last Updated: 26 November 1997
Christopher Hill, Norton Rose, November 1997

The Housing Grants Construction And Regeneration Act ("the Construction Act") essentially does three things:

  • it gives the right to refer disputes under a Construction Contract (as defined) to adjudication;
  • it gives the right to payment by instalments and a right to suspend work if payment is not received; and
  • "pay when paid" clauses are ineffective.

This paper discusses the new right to adjudication.


The inspiration for the legislation was the Latham Report and the centre piece of Sir Michael Latham's ideas for ridding the construction industry of its litigiousness was adjudication of disputes by someone independent of the Contract Administrator.

The Latham report itself and the weight of comment since has considered adjudication in relation to main contracts and subcontracts but the definition of "Construction Contracts" includes an agreement to provide professional services so adjudication is also available to the professional team.

The benefit of adjudication is to provide a "quick and dirty" dispute resolution procedure by which:

  • disruption to progress on site is minimised;
  • cash flow is secured;
  • costs are contained;
  • relationships are preserved; and
  • either party may take the dispute on to arbitration or litigation if dissatisfied

It has to be said that these benefits are unproved . Adjudication does not have much of a track record in the UK. The only real experience of it in action is in relation to settling the extent of a main contractors right to set off under the domestic form of subcontract, DOM/1. It has also been available as an option under JCT '80 and '81 but it is little used.

Adjudication is being used in an entirely new way in the Construction Act . In the past it has been confined to deciding questions of quantum where the principle in issue has already been decided by someone else, either the architect or the courts. Now it is to cover exactly the same ground as is already covered by arbitration - that is to say "any dispute or difference".

A commonly asked question is "how can adding another stage to the dispute resolution process reduce costs?" There is no published research to support the proposition that it does, but there is empirical evidence from the Channel Tunnel project and from the US which suggests that multi stage dispute resolution procedures reduce litigation by allowing disputes to blow themselves out after the initial stages. Disputes are often begun in anger and settled in boredom.

S108 of the Construction Act sets out the minimum requirements for an adjudication procedure which must be included in a Construction Contract. Each Contract must provide that:

  • an adjudication notice may be given at any time ;
  • a timetable must be provided for the appointment of the adjudicator within seven days of service of the notice;
  • the adjudicator must reach his decision within 28 days of the referral subject to an agreed 7 day extension;
  • the procedure must impose a duty on the adjudicator to act impartially; and
  • the procedure must enable the adjudicator to take the initiative (like an exercising magistrate) in ascertaining the facts and the law.

If the Contract fails to provide for these minimum procedural arrangements in any respect then any party wishing to pursue adjudication must adopt the statutory "Scheme for Construction Contracts" (the "Scheme") in its entirety.

The Scheme is a statutory procedure which applies in default of one which satisfies the requirements of S 108. It has been published in final draft form. It is very prescriptive and the general consensus of opinion is that Construction Contracts will quickly adopt the minimum requirements in S108 rather than force the parties to fall back on the Scheme.

There are a number of major problems with the procedure in S108 and in the draft Scheme for Construction Contracts, these appear to be:

1. Is it Arbitration?

S108 refers to "any dispute or difference" so questions of law such as the validity of the contract itself which were previously the exclusive preserve of an Arbitrator or the Courts now fall to be decided by an adjudicator.

Adjudication procedures are going to have to be carefully drafted to avoid becoming arbitration and suffering from all its perceived problems such as an obligation on the adjudicator to observe the rules of natural justice and the parties right to appeal points of law.

2. "Temporary Finality"

The adjudicators decision is "final" until "finally decided" in arbitration or litigation. Consequently, the parties may rely upon an adjudicators decision which is subsequently overturned by an arbitrator or a court . For example, what would happen if a subcontractor relied on an adjudicators decision to the effect that he had validly determinated his sub-contract and left site only to have that decision overturned in arbitration? Would he liable in damages? Probably there will have to be a reciprocal contractual indemnity from liability arising out of reliance on an incorrect adjudicators decision. Will the Adjudicator then be liable for having made the wrong decision? Certainly he has no quasi judicial immunity.

3. Enforcement

An adjudicators decision is not a judgement and so, to have any effect in law, the contract will have to contain a discrete obligation to comply with the adjudicators decision. For example the Scheme provides that payment of sums ordered by an adjudicator is to be made within seven days of his decision. In the right circumstances a party on the wrong end of an adjudicators decision might be well advised to ignore it and take his chances in litigation or arbitration. Establishing damages against the reluctant party in those circumstances may prove difficult.

4. Conflict with the Supervising Officer

Adjudication could become a second opinion available to any contractor disgruntled with an architects certificate. That may be healthy in promoting impartiality on the part of Contract Administrators everywhere. However the Contract Administrator is not bound by the adjudicators decisions (not being a party to the Contract) and he can continue to act according to his own judgement. It follows that there is a real risk of conflicting decisions.

For the same reason Main contractors must ensure that the same adjudicator and adjudication scheme apply to the main contract and sub contracts or they may find themselves suffering conflicting adjudicator's decisions.

5. Costs

The Scheme specifically excludes any power for the adjudicator to deal with costs other than his own fee so presumably they will fall where they lie. That will probably create an inherent disincentive to bring small claims to adjudication which is unfortunate. We expect something like American litigation tactics to develop whereby parties will be encouraged to settle adjudicated disputes simply to avoid the wasted costs.

6. Resort to the courts or arbitration

Even though an adjudication may be on foot there is nothing preventing either party taking the same issue straight to arbitration or the courts, although the Scheme says that the parties may agree not to do so "for a specified period or until practical completion of the contract". Whether that agreement is valid must be doubtful because it would amount to an attempt to oust the jurisdiction of the courts.


From all parties point of view the adjudication provisions of the Construction Act are to be welcomed. There may be some issues to be tested in the courts over the next few months but it is to be expected that a new profession of "Adjudicator" is about to be born. Two of our partners, Peter Hall and Peter Rees, are ORSA trained Adjudicators and Christopher Hill is a Chartered Institute of Building's trained adjudicator and a member of their panel. We are also ready to help with the drafting of adjudication provisions. Certainly it looks as though neither Employers nor main contractors will want to find themselves saddled with the Scheme for Construction Contracts so bespoke adjudication provisions are going to be the order of the day for the time being.

This note is intended to provide general information about some recent and anticipated developments which may be of interest. It is not intended to be comprehensive nor to provide any specific legal advice and should not be acted or relied upon as doing so. Professional advice appropriate to the specific situation should always be obtained.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.