Adjudication - Common Questions

• Published date: 13 April 2022
• Subject Matter: Corporate/Commercial Law, Real Estate and Construction, Contracts and Commercial Law, Construction & Planning
• Law Firm: Barton Legal
• Author: Barton Legal

We are often asked "can I adjudicate?"; "I did not serve any notice, but do I still have to pay?"; "can I recover my costs?".

The answer to these questions is not as straightforward as you may think. Adjudication is an ever-evolving process due to innovations in technology, the complex nature of construction contracts, and the flow of new construction case law. So, our advice to you would be to consider the following:

1.Do you have a dispute? Case law has found that a dispute does not need to be given a complicated definition, a normal dictionary can be used to define it.

2. Has your dispute 'crystallised'? i.e., can it be said that both parties know about the dispute? Case law has held that even if the other party to the dispute ignores the claim, it can still be said that the dispute is known to both parties.

3. Has the dispute arisen under the contract? A classic example is, has the Contractor been paid by the Employer as per the agreement.

If you can answer 'yes' to these 3 questions, and you have been carrying out construction work then you will be able to adjudicate.

However, it is not unusual for us to review contracts which do not refer to adjudication or provide any sort of procedure to follow. If this describes your contract, then you will need to follow the adjudication procedure set out in The Scheme.

Whatever the rules are that apply, you will need to serve a notice of adjudication on the other party to the dispute. This must briefly describe the dispute. There are other requirements that this notice must follow, or you risk not serving a valid notice. We can explain those to you.

An adjudicator must then be appointed. If you don't follow the requirements of your contract when appointing the adjudicator, then the adjudicator's decision may be unenforceable.

A referral notice will need to be served after this. This must also be carefully drafted to ensure you have covered all the legal arguments and factual points you need to make. The referral notice can make or break an adjudication.

It should be noted that any expenses you incur are not recoverable from the other party. So, bear in mind, you could be in a situation where you have incurred costs, but have not convinced the adjudicator and so have lost. You will be responsible for your costs and the adjudicator's.

So here are some common questions and answers:

1. What is a pay less notice?

A: A pay less notice is used by the Employer to tell the Contractor that they are 'paying less' than the...