Construction adjudication is a statutory, fast track dispute resolution process designed for the construction industry in England and Wales. It allows parties to obtain a temporarily binding decision from an independent adjudicator, usually within 28 days, so that cash flow on projects is maintained while longer term issues can be resolved later if necessary.
The process arises from the Housing Grants, Construction and Regeneration Act 1996, as amended (often called the Construction Act). Where a contract is a construction contract within the meaning of the Act, a right to adjudicate at any time is implied if the contract does not already include compliant adjudication provisions.
The hallmark of construction adjudication is its speed and focus on practical outcomes. It is intended to be a pay now, argue later mechanism. An adjudicator’s decision must be complied with promptly, but it does not finally determine the parties’ rights; disputes can still proceed to arbitration or litigation for a final determination.
When adjudication applies
Most building, engineering and related professional services agreements are construction contracts for the purposes of the Act. This covers a wide range of participants, including main contractors, subcontractors, consultants, and specialist trades. Certain residential occupier contracts fall outside the regime, and there are specific statutory definitions that need to be considered on a case by case basis.
Even where the contract is oral or lacks complete adjudication provisions, the Scheme for Construction Contracts (England and Wales) Regulations 1998, as amended, will imply default terms. Standard forms such as JCT and NEC include adjudication clauses that broadly comply with the Act, though the detail varies and can be amended by the parties.
How the adjudication process works
The process starts with a notice of adjudication identifying the dispute, the parties, and the redress sought. The notice frames the adjudicator’s jurisdiction, so clarity and precision are critical. Following the notice, an adjudicator is appointed either by agreement or via a nominating body such as RICS, CIArb, TeCSA or RIBA.
The referring party must then serve a referral notice, typically within seven days of the original notice, setting out the facts, law, contractual provisions and evidence relied upon. The responding party will be given a short period to provide a response. There may be a reply and rejoinder if the adjudicator permits, but the timetable remains compressed.
The adjudicator has wide procedural discretion, including the ability to ask questions, call a meeting, or visit site. The default time for a decision is 28 days from the referral, extendable by 14 days with the referring party’s consent, or longer by agreement of both parties. The decision is binding until finally determined by agreement, arbitration or litigation.
Common issues decided in adjudication
Construction adjudication is frequently used for payment disputes, including interim valuations, final accounts, variations, delay and disruption claims, and the effect of pay less notices. It is also used for issues such as defects, retention, extensions of time, liquidated damages, and the interpretation of contract clauses.
Parties often distinguish between so called smash and grab adjudications, where the focus is procedural compliance with payment notice regimes, and true value adjudications, where the adjudicator values the underlying work. The availability and sequencing of these routes is sensitive to recent case law and contract drafting.
Jurisdiction and procedural pitfalls
An adjudicator’s jurisdiction depends on a valid construction contract, a properly identified dispute, and compliance with the contractual or statutory procedure. Errors in the notice of adjudication, appointing the wrong nominating body, or referring matters not yet crystallised are common traps that can imperil enforcement.
Natural justice underpins the process. Each party must have a fair opportunity to present its case and respond. Undue reliance on evidence not shared with the other side, or deciding points on a basis not argued, can amount to a material breach of natural justice and provide limited grounds to resist enforcement.
Timeframes and urgency
The statutory timetable prioritises speed. Parties need to assemble factual, technical and quantum evidence rapidly, often within days. Consideration should be given at an early stage to strategy, scope of the dispute, and whether targeted issues can be advanced to achieve a practical result within the available window.
Payment cycles under the Construction Act are strict. The absence or lateness of a payment notice or pay less notice can decisively affect outcomes. Understanding the interplay between interim applications, notices, and valuation rights is essential before commencing or defending construction adjudication.
Costs and recovering fees
As a general rule, each party bears its own costs in construction adjudication. The adjudicator can decide who pays the adjudicator’s fees and expenses, typically linked to who succeeds. Post 2011 amendments generally prevent contractual terms that automatically require one party to pay all costs regardless of outcome.
Parties may agree, after a dispute has arisen, that the adjudicator can award party costs, but such agreements are rare. Cost proportionality is therefore important: focused issues, efficient evidence, and clear submissions usually offer the best prospect of a cost effective result.
Enforcement and challenges
Adjudicators’ decisions are enforced by the Technology and Construction Court using expedited procedures, most commonly by application for summary judgment. The court’s approach is robust: it enforces decisions even if they are arguably wrong on the merits, provided the adjudicator acted within jurisdiction and observed natural justice.
Grounds to resist enforcement are narrow and include want of jurisdiction, breach of natural justice and, occasionally, manifest ambiguity. Set off is generally not available against an adjudicator’s decision unless clearly permitted. The court expects prompt compliance to preserve cash flow, consistent with the statutory purpose.
Advantages and limitations
The advantages of construction adjudication include speed, relative economy, industry expertise of adjudicators, and the ability to secure payment to keep projects moving. It can reset commercial dynamics without the delay and cost of full proceedings, while preserving the right to a final determination later.
Limitations include compressed timetables, limited disclosure, and the risk of procedural missteps. Decisions are temporary and may be revisited, which can leave issues unresolved in the longer term. Strategic planning is essential to decide whether adjudication is the right forum and how best to frame the dispute.
Our approach to adjudication
Stephensons combines specialist construction knowledge with procedural rigour. We assess the contractual framework, statutory compliance and factual matrix at pace, then craft a targeted case theory aligned to the adjudicator’s remit. Clarity of the dispute and disciplined evidence management are at the heart of our methodology.
We frequently act for employers, main contractors, subcontractors and consultants across sectors including residential, commercial, infrastructure and energy. Our experience spans interim and final account disputes, complex valuation exercises, extensions of time, loss and expense, defects, professional negligence issues, and enforcement in the Technology and Construction Court.
Documents and evidence to prepare
Effective construction adjudication relies on contemporaneous records. Core materials typically include the contract and amendments, programmes, payment and pay less notices, applications and certifications, site diaries, correspondence, meeting notes, photographs, drawings, change control records, valuations, expert input where appropriate, and a clear quantum summary.
Concise witness evidence is often invaluable to explain context and commercial realities. Expert evidence may be helpful on delay, quantum or technical issues, though proportionality is key given the short timetable. A coherent bundle and signposted submissions enable the adjudicator to reach a reasoned decision swiftly.
Alternatives to adjudication
While construction adjudication is often the quickest route to a practical outcome, other mechanisms may be preferable depending on objectives. Mediation can unlock settlement on a without prejudice basis. Expert determination can resolve narrow technical issues. Arbitration or litigation offers final, binding determination with fuller procedures.
Contractual dispute escalation clauses sometimes require negotiation or mediation before formal steps. Careful reading of bespoke amendments is essential to avoid inadvertently missing time limits or preconditions to relief. Strategic choice of forum should reflect urgency, evidential needs and appetite for a definitive outcome.
Frequently asked questions
Is an adjudicator’s decision final?
It is binding and must be complied with immediately, but it is not final. Either party can pursue arbitration or litigation to finally determine the dispute.
Can multiple issues be referred together?
Yes, provided they crystallise into a single dispute or connected disputes. Overloading the reference can be counterproductive within the 28 day timetable.
What if the adjudicator gets the law wrong?
The court will usually still enforce unless there is a jurisdictional error or breach of natural justice. Merits challenges belong in subsequent proceedings.
How quickly must payment be made?
Usually within the period specified in the decision or a short, reasonable period thereafter. Non compliance risks swift enforcement and adverse cost consequences.
Key takeaways
Construction adjudication offers a rapid, pragmatic route to resolve payment and project issues while works continue. Success turns on defining the dispute precisely, complying with statutory notice regimes, and presenting focused, well evidenced submissions. Experienced guidance can minimise risk and support timely, enforceable outcomes aligned with commercial objectives.
For specialist advice on construction adjudication, call 0161 696 6170 or fill in our enquiry form.
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