Adjudication

Thursday, September 8th, 2016

ADJUDICATION – HELP OR HINDRANCE?

Adjudication is a feature of many contracts. What does it actually mean? This is a recent referral to us for discussion with a client. What follows is no substitute for legal advice, but it will clarify the subject for our readers. Judge Wilcox referred to adjudication as a robust and summary procedure, adding that there ‘may be casualties along the way’. Nothing in life is straightforward – see Penten Group Ltd v Spartafield Ltd [2016] EWHC 317 [18 February 2016]. In this case Mr Justice Coulson said that ‘This is a case bedevilled by the almost maniacal desire of the parties to issue notices of adjudication against each other’.

Adjudication for many years has been the predominant means of deciding first level disputes in the construction industry. The Housing Grants, Construction and Regeneration Act 1996 (as amended by the Local Democracy, Economic Development and Construction Act 2009) is the reference point.

Adjudication is different from mediation where a neutral facilitator works with the parties to help them reach their own solution. An adjudicator will make legal and technical decisions on a dispute which are generally binding on the parties.

Adjudication is different from arbitration in that the latter is a more formal process and the arbitrator’s decision is legally binding.

The adjudicator’s burden is to decide on the rights of the parties under the building contract and must do so within 28 days. The decision is binding forthwith and can only be overturned, revised or confirmed in Arbitration. The process is a contest between ‘A’ and ‘B’, not an investigation by the adjudicator. It can be characterised as a dispute management system but not a dispute resolution system.

Adjudication is an excellent example of a term that rolls off the tongue, without the parties to a contract necessarily knowing the implications when a contract goes awry.

If you need any assistance in relation to Adjudication or any other Procurement related matter please give us a call on 01744 20698 or email us at office@brianfarrrington.com