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Adjudication Advantages and Disadvantages.

Posted on 21/08/2017 · Posted in Adjudication

Adjudication is a mechanism for resolving disputes in the construction industry, introduced as a compulsory means of dispute resolution by the Construction Act 1996.

Adjudication has many benefits and perhaps the foremost of these has to be the efficiency of the process as it’s designed to ensure the smooth running of any contract under which a dispute arises and to enable this dispute to be quickly and efficiently resolved. Construction disputes are generally complex and expensive to litigate, while adjudication tends to cut through that complexity offering fast and practical solutions, with the process typically taking place over a 28 day period from the selection of the adjudicator to the final decision, saving time and money.

Other key advantages of adjudication, widely acknowledged by those who have experienced, or are familiar with the process, include:

  • Adjudication produces a final decision that the parties are encouraged to respect – and the majority of adjudication decisions do tend to be accepted by the parties as the final result
  • Parties can select the adjudicator they wish to use or at least the characteristics of the adjudicator
  • The adjudicator can act as an investigator
  • Due payments can be enforced without waiting for an arbitration award and because of the quick turnaround times in the adjudication process this can result in a business receiving a significant and speedy cash injection
  • There are rarely lengthy oral arguments or legal submissions
  • There is no cross examination or formal evidence
  • The adjudicator and disputing parties can all agree – and adhere – to a fast, flexible and streamlined process

Science and literature are not two things, but two sides of one thing.”
Thomas Huxley

However, adjudication as a means of dispute resolution does not work for everybody and is not suitable in every scenario. It is therefore equally important to consider some of its disadvantages when considering entering into the process:

  • The adjudicator has no jurisdiction beyond that specified in the contract
  • Adjudication does not always lead to final settlement of a dispute because either of the parties has the right to have the same dispute heard afresh in court
  • Legal and expert fees are not normally recoverable, and mistakes can therefore cost significantly so there is little margin for error
  • A mistaken decision has to be honoured in the short-term, which may cause issues of cash-flow
  • There is no testing of evidence or assertions
  • Because the adjudication outcome is decided within 28 days of starting the process, adjudication is also a way of losing considerable sums of money in a very short timescale for the party who is on the wrong end of an unfavourable decision

On balance, adjudication is seen as an extremely popular and effective form of dispute resolution and one that is turned to ever more frequently as an alternative to traditional litigation, which can be expensive and cumbersome. Adjudication allows disputing parties to resolve contract differences as quickly and efficiently as possible, allowing countless construction projects to continue that would otherwise have ground to a halt.

Expert Evidence is a professional firm concentrating on the four main areas of dispute resolution; acting as expert witnesses in financial litigation, mediation, arbitration and adjudication. The firm has a civil, criminal and international practice and has advised in many recent cases. Areas of specialisation include banking, lending, regulation, investment, and tax.

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Disclaimer – Please confirm any of the above views with your solicitor. Expert Evidence takes no responsibility or provides any guarantee that the views above are correct for your particular case or jurisdiction.