What do I do if I receive a Notice of Adjudication?

Whatever you do you must act quickly and take advice!

Adjudication is a 28 day from the start to the decision process that provides a quick and (relatively) inexpensive procedure for resolving disputes under construction contracts. It has become easily the most popular and effective manner in which to settle differences.

Adjudication has been imposed on the construction industry. Most standard contracts now include the necessary adjudication provisions but even if a contract does not provide for adjudication legislation now imposes the right of either party to adjudicate whether the other party wishes to adjudicate or not. That means you can always adjudicate as it is a right given to you and cannot be denied.

If you are on the receiving end of a Notice to Refer to Adjudication it means that within 7 days (and maybe less) firstly an Adjudicator will be appointed and secondly you will receive the Referral or claim document from the Referring Party (claimant).

Typically when you receive the Referral an Adjudicator will require your formal Response within a further 7 days. If there are good reasons he may allow a few extra days but that is by no means certain. That means you should take action immediately on receipt of the Notice as preparing the Response (your Defence) takes time – bearing mind this will involve the review of the contract, consideration of the legal and quantum issues and the drafting of the Response together with assembling supporting documentation and its photocopying and cross referencing.

Thereafter the process is very much in the hands of the Adjudicator as it is a very flexible process. Typically they will allow the Referring Party to submit a Reply to the Response. Often an Adjudicator will then proceed to a decision based on the documents alone or he may pose questions in writing. Alternatively he may require a meeting to be held at which he can direct questions to the parties. Much depends on the complexity and nature of the dispute so for example a dispute about quality will almost always require a site visit whereas a valuation dispute might not require a meeting at all.

An Adjudicator is bound to issue his decision within 28 days of receiving the Referral although that can be extended by up to 2 weeks by permission of the Referring Party alone and by further periods if both parties agree. That often happens if the dispute referred is a complex one – for example the issue of a final certificate encompassing valuation disputes, extensions of time and loss and/or expense. In any event by legal standards the process is lightening fast.

The decision issued has been described as rough and ready but it is binding on the parties until they agree otherwise or they refer the dispute to arbitration or litigation for a final resolution. It does mean the parties get the independent impartial view of a third party who is a construction professional and a trained Adjudicator. If an Adjudicator finds in your favour the other side will have to pay up.

Adjudication is now the construction industry’s preferred method of resolving its disputes. As we have said above referring a matter to adjudication is the right of any party to a construction contract, at any time, as a means of settling any dispute. So if any of the circumstances below apply to you, adjudication could provide a quick and cost-effective solution. Give us a ring.

(i)             I have not been paid.

(ii)           I have not been paid on time.

(iii)          I have not been paid what I am entitled to under the contract.

(iv)          There is a dispute about whether a variation has been instructed.

(v)           The proper extension of time has not been granted.

(vi)          The correct loss and expense has not been awarded.

(vii)        The other party has unfairly set-off contra charges.