In the UK, construction law is made up of several bodies of law, making it a complex area of practice. This is the fourth in a series of articles which seek to provide an overview of some frequently asked questions in the construction industry and in relation to the laws which govern it. Specifically, we take a look at queries related to the adjudication process:
1. Do contractors have a right to adjudication?
In terms of the Housing Grants, Construction and Regeneration Act 1996 (“the Act”), all parties to a construction contract (as defined in the Act and discussed in an earlier article in this series) have a statutory right to refer a dispute arising under the contract to adjudication.
A ‘dispute’ includes ‘any difference’ between parties. There is extensive case law on what can, and what cannot, be considered a ‘dispute’, and any queries in relation to which should be directed to a solicitor.
The Act sets out a number of standard provisions relating to adjudication. A construction contract must include all of those standard provisions. Where a construction contract fails to adequality stipulate adjudication procedure in line with those provisions of the Act, all of the standard provisions set out in the legislation will be implied into the contract instead.
2. What is the timescale for adjudication?
When the Act was brought in, it was intended to provide an expeditious route for determining a dispute, and critically, ensuring the continuance of cashflow across the industry. As a consequence, the Act sets a tight timetable for running an adjudication and reaching a decision.
Under the Act’s standard provisions, the aim is for a decision to be reached with 28 days of service of the referral notice (the notice from the referring party setting out detail their claim against the responding party). Whilst the 28-day timetable can be extended, this is not the norm nor is it generally preferred.
3. What is the consequence of an adjudicator’s decision?
Once the process of adjudication has taken place, an adjudicator will issue their decision. An adjudicator’s decision is interim binding, or put another way, binding on parties until the dispute is ‘finally determined’.
In practice this means, parties must comply with an adjudicator’s decision. If parties are not content with the decision, and wish to challenge it, they must seek final determination via the courts or arbitration, depending on what the terms of the contract dictate.
As with any construction project, the precise facts and circumstances are important when considering many of the foregoing issues, so it is always important to involve your solicitor early in the process.
For any advice on your contractual rights/obligations, or alternatively for any advice in relation to dispute resolution, please feel free to get in touch with a member of our Construction team.
This article was co-written by Joshua Grieveson, Trainee Solicitor.