Adjudication for the construction industry was introduced in 1996 by the Housing Grants Construction & Regeneration Act and the industry has taken it to its heart.
The Construction Act
In 1998, the UK introduced statutory Adjudication in construction, bringing into force the Housing Grants, Construction and Regeneration Act 1996 (HGCR Act). The HGCR Act is supported by the Scheme for Construction Contracts (Scotland) Regulations 1998 and the Scheme for Construction Contracts (England and Wales) Regulations 1998.
The HGCR Act was amended by the Local Democracy, Economic Development and Construction Act 2009 (LDEDC Act), which came into force in 2011 by the enactment of the revised Schemes. The amendments introduced revised Adjudication and payment provisions with which construction contracts must comply. CDR are well equipped to offer advice on this important development.
Adjudication in the Construction Industry. (Cont)
The Adjudication Process under the Act and Scheme
An independent Adjudicator is appointed by an Adjudicator Nominating Body or an Adjudicator is agreed by the Parties;
The Referring Party submits a Referral setting out the dispute, and the Respondent then usually has 7 days to submit its Response, in which it can raise any defence;
Further submissions may be requested in the form of a Reply and Rejoinder, and / or a meeting may be convened;
The Adjudicator is required to make a Decision within 28 days of the dispute being referred to him or her, although there are provisions for the 28 day period to be extended initially to 42 days with the agreement of the Referring Party, and beyond 42 days with the agreement of both Parties;
Advantages of Adjudication
Quick and cost effective in comparison to litigation and arbitration;
Can be commenced during the currency of the works to resolve interim disputes quickly, assist cash flow and ensure progress of the works continues;
Adjudicators from a range of backgrounds and disciplines, with technical expertise aligned to the matter in dispute;
Suitable for disputes of a range of values, or for deciding points of principle;
Decision of the Adjudicator is binding (unless either Party decides to refer to Arbitration or Court); and
Well-supported by the Courts in terms of enforcement.
Disadvantages of Adjudication
Parties have to bear their own costs, and these cannot usually be recovered from the losing Party;
Tight timescales can put Parties under pressure;
Different processes under the Scheme and other procedural rules can create confusion for Parties unfamiliar with Adjudication.