Adjudication is a form of dispute resolution specific to construction contracts. Its time restrictions make it the perfect form of dispute resolution for less complex claims, but any disputes under a construction contract can be referred. Per the Housing Grants Construction and Regeneration Act 1996 (HGCRA), and the accompanying Scheme for Construction Contracts (England and Wales) 1998 (the Scheme), a decision must be reached within 28 days of receiving a Referral Notice. Whilst 28 days may seem an age away, a lot can happen. It is important to understand that in adjudication, unless directed by the Adjudicator otherwise, a day includes weekends and means all hours up until 23:59. This is vastly different to a working day which concludes on Friday at 17:00.
01 January 2024 - Notice to Adjudicate is Served
Under the Scheme, "any party to a construction contract ("the Referring Party") may give written notice (the "notice to the Adjudicator") of his intention to refer any dispute arising under the contract to adjudication".
Adjudication applies to a construction contract, as defined in s.104 of the HGCRA. It does not apply to residential construction projects, unless a standard form contract has been used e.g. JCT, FIDIC, NEC. This is known as contractual adjudication. S.108 determines the right to refer disputes under a construction contract to adjudication.
It is worth noting that if the contract is not a construction contract under the HGCRA, or includes a residential occupier, the parties can still agree to adjudicate (also known as ad-hoc adjudication).
Such requirements are explored further in a separate article.
In this particular example, the Notice to Adjudicate will be served by 23:59 on the 1st January 2024.
As the first step in adjudication, the Notice sets out the nature of the dispute, names all of the relevant parties, the relevant contractual clauses, and the redress sought.
Pay attention to clauses within the Contract, as they may determine the manner in which the Notice to Adjudicate is to be served, including how an adjudicator is appointed e.g. RICS, TeCSA, CIArb.
Once the Adjudicator is nominated, they will contact the Parties listed on the Notice to Adjudicate form.
08 January 2024 - Referral Notice is Served (not less than seven days after the Notice)
Under the Scheme, "Where an adjudicator has been selected, the referring party shall, not later than seven days from the date of the notice of adjudication, refer the dispute in writing (the "Referral") to the adjudicator".
As per this example, the Referral must be issued by 23:59 on the 8th January.
Although the Referral can be issued earlier, the Referring Party may want to use all the time available, to ensure the facts are represented to the Adjudicator as accurately as possible. Using the allocated time in its entirety can also allow witness statements and expert reports to be gathered. However, ideally, these should all be prepared and ready before the Notice to Adjudicate is given.
15 January 2024 – Response is served
Once the Referral Notice has been served on the Responding Party and the Adjudicator, the Adjudicator will set a deadline to issue a Response. The Adjudicator is likely to give the Responding Party seven days to issue a Response, from the date of the Referral. However, this can be extended.
Here all issues must be addressed, expressing the Responding Party's detailed version of events, including any counterclaim.
As per this example, and unless the Adjudicator indicates otherwise, the Response must be served by 23:59 on the 15th January.
18 January 2024 – Reply is served
Note: the Adjudicator will usually set a timetable for the respective parties' submissions at the start of the adjudication. If there is a Reply, this may have a shorter time period, perhaps as little as three days.
As per this example, the Reply must be served by 23:59 on the 18th January 2024.
Once served, the Responding Party may want to serve a Rejoinder. Permission should be requested, and again, a short time period is likely. The Adjudicator will provide a timeframe in which any Rejoinder, and potential Surrejoinder should be issued. It is unlikely that more than three days will be allowed, except in extenuating circumstances.
05 February 2024 – Decision is made
On day 28, from when the Referral was issued, the Adjudicator will issue a decision. It is binding, unless and until challenged by arbitration or litigation.
Important Information:
Whilst the 28-day period is heavily emphasised, it can be extended.
- The Decision can be extended by seven days with the consent of the Referring Party. A longer extension must be agreed by both parties.
- If a hearing is requested and/or agreed by all parties, or requested by the Adjudicator, this can also extend the timeframe beyond 28 days.
At Barton Legal, we specialise in all aspects of contentious and non-contentious construction law, navigating the complexities of contracts and proceedings. Whether in relation to projects in the UK, Europe, or further afield; we have a team dedicated to producing the best possible outcome for organisations of any size.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
