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Adjudication Report – What to Expect.

Posted on 20/05/2017 · Posted in Adjudication

Adjudication is a form of alternative dispute resolution (ADR) predominantly used in the construction industry as a mechanism to ensure the smooth running of any contract under which a dispute arises, and to enable this dispute to be quickly and efficiently resolved.

The adjudication process kicks off when the dispute comes to a head and a notice of adjudication is served, which can be done by either party. An adjudicator will then be appointed who receives submissions from both parties, before carrying out his or her own investigations and ultimately then reaching a decision on the outcome of the dispute. The adjudicator will be selected based on his or her own experience in their field. The adjudicator will often be adept at dealing with construction and banking contracts.

Introduced in the UK in 1996 was the Housing Grants, Construction and Regeneration Act (the ‘Construction Act’). The original intention of the Act was that the adjudication process would be a relatively informal one; however it has become a more formal process over time with disputing parties often delivering detailed submissions including witness statements and even expert reports.

The adjudicator is required to make his or her decision within 28 days of the referral notice being served (although it can be further extended by 14 days if both parties agree) and this decision is final and binding unless or until a final determination is reached on the dispute either in court or by resolution through an alternative dispute resolution method. Even then, the disputing parties are obliged to comply with the adjudicator’s decision until that happens.

How few there are who have courage enough to own their faults, or resolution enough to mend them.”
Benjamin Franklin

The adjudicator’s decision might involve an order for the payment of money from one disputing party to another (the adjudicator also has the power to decide when this money is paid and whether any interest is due on an outstanding payment) or it may relate to a disputed fact or technical point. Either way, the adjudicator may only make decisions based on what is specified in the contract, and may not decide on issues that have not been referred, for example if an adjudicator has been asked to decide what a party’s financial entitlement is under the contract, the adjudicator can decide only this and not actually order the amount to be paid.

Under the Local Democracy, Economic Development and Construction Act 2009 (the “new” Construction Act) which amended the 1996 Construction Act, adjudicators can now decide disputes based on an oral agreement or partly in writing rather than only in writing, so parties who wish to receive a report in writing must specify this under the adjudication agreement. Whilst, it is still beneficial to enter into a written contact over an oral contract due to the fact that oral contracts create a great deal of uncertainty and can be very expensive to resolve, the reality of commercial business is that many contracts are agreed over the phone.

In the circumstance that a misunderstanding may have arisen within oral contracts adjudication reports may be advisable to both parties as a means of aiding dispute resolution. An adjudication report will further include the details of the nature of the dispute, and recommendations for how the disputing parties move forward within a contract. The report can serve to provide an audit trail of evidence to support the adjudication, and might also include any expert witness testimony or evidence submitted throughout the adjudication process.

The documentation of witness testimony may be beneficial for both parties to understand at what point the terms of their contract was misinterpreted by the other party. An adjudicator will often arrange a meeting with both parties individually to listen to their version of events before embarking on his or her own investigation.

A written report, although time consuming, may help the parties to feel a sense of trust in the adjudicator’s final decision. When dealing with a disputed technical point the added benefit of a written report may be in aiding understanding. Furthermore, should a dispute continue to court well after the adjudicator’s decision has been reached, a report would be advisable so that a litigator may ‘pick up the pieces’ where the adjudicator left off.

It is of the utmost importance that adjudication maintains its position however as a more quick and efficient means of resolving disputes. Therefore, in some instances one might decide that an oral report is enough, particularly when an adjudicator’s decision is accepted in the first instance. It is always recommended that the terms of both the construction contract and the terms of adjudication are clearly defined before any work is carried out. This will ensure that should a dispute go to adjudication it is resolved quickly and fairly.

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.