Adjudication is often subject to a strict timetable and may be based purely on documentary submissions (see for example, NEC Engineering and Construction Contract, option W2). Adjudicators can adopt an inquisitorial role which may involve taking the initiative in ascertaining facts and law.
Adjudication decisions are binding unless and until they are revised by arbitration or litigation. There is no right of appeal and limited right to resist enforcement. Award of legal costs is at the discretion of the adjudicator unless this is excluded by the terms of the contract. Based on decision and written information received from both parties, the whole process can take up to 28 days and the decisions are binding.
If parties to a construction contract do not agree an adjudication procedure, then one is imposed by statute (see the Housing Grants, Construction and Regeneration Act 1996 Part II Section 108 and the Local Democracy, Economic Development and Construction Act 2009 Part 8, which took effect in England and Wales in October 2011 and in Scotland in November 2011).
Contractual adjudication procedures must comply with Section 108 of the Housing Grants, Construction and Regeneration Act.
The adjudicator is either named in the contract, agreed by the parties or appointed by a nominating body, usually named in the contract (see for example, the Technology and Construction Solicitors Association (TeSCA) which has developed its own Adjudication Rules (now version 3.1).
If the parties do not agree procedural rules which comply with the Housing Grants, Construction and Regeneration Act then the Act imposes the rules set out in the Scheme for Construction Contracts.
Advantages and disadvantages
The parties can select the expert or the characteristics of the expert.
The expert can act as an investigator.
Seldom lengthy oral arguments or legal submissions.
No cross examination or formal evidence.
Streamlined, speedy and flexible procedures as agreed between the parties.
The expert determination is not supported by statute.
The expert powers are limited.
The expert’s determinations must be enforced by commencing court proceedings.
Section 108 – key adjudication provisions
If the contract does not comply with these requirements, then the statutory scheme will apply.
Section 108 (2) – stipulates that the contractual scheme for adjudication should
Require the adjudicator to reach a decision within 28 days of referral or such longer period as agreed by the parties, or by up to 14 days with the consent of the party by whom the dispute was referred.
Enable the adjudicator to take initiative in ascertaining the facts and law (the adjudicator is not required to act judicially when applying the law, nor is there any obligation upon him to reach the right answer).
This briefly sets out the nature of the dispute and the relief sought.
Selection of an adjudicator by a body must be communicated to the parties within five days of referral.
May decide related issues arising under different contracts.
Objection to adjudicator
To decide whether interest should be paid.
NB: In 2017, the Construction Industry Council (CIC) published a new Users’ Guide to Adjudication, providing a general introduction to adjudication in the context of construction contracts, and in particular the right to adjudication in the UK and Northern Ireland.
In the case of Michael J Lonsdale (Electrical) Limited v Bresco Electrical Services Limited (In Liquidation)  EWHC 2043 (TCC), Mr Justice Fraser QC ruled that where there are claims and cross claims between the parties to a contract, a claim cannot be settled by adjudication because it is not a claim under the contract and so an adjudicator could rule on it.
NB The Global Construction Disputes Report published by Arcadis in 2019 found that the UK remains the jurisdiction with the shortest average length of time to solve a dispute at 12.8 months, and that the average value of disputes in the UK has fallen 47% to US$ 17.9 million. Negotiation remains the preferred method of resolution.