If you decide you need to start an adjudication, how should you go about it? This quick guide helps you through
A quick guide to starting an adjudication to determine a construction dispute. The note explains what a party should check before it serves a notice of adjudication, including the contract’s adjudication rules and selecting and appointing an adjudicator.
What must I do before I start an adjudication?
Before you start an adjudication:
Establish the right to refer a dispute to adjudication. This is the most important step. You may refer a dispute to adjudication if:
The contract between the parties is a construction contract under the Housing Grants, Construction and Regeneration Act 1996 (Construction Act 1996), known as statutory adjudication.
The parties have agreed to refer disputes to adjudication, known as contractual adjudication.
Ensure there is a dispute that has “crystallised”. Section 108 of the Construction Act 1996 entitles a party to give notice of its intention to refer a dispute to adjudication “at any time”, but there is no right to adjudicate unless the dispute has crystallised.
Consider whether adjudication is the right method of dispute resolution. The referring party must decide whether to refer a dispute to adjudication or whether it would be better to pursue the claim in litigation or arbitration.
I have decided to start an adjudication, what next?
The referring party must:
Check the applicable adjudication procedure rules.A “construction contract” must include an adjudication procedure that complies with the requirements of section 108 of the Construction Act 1996.
If the construction contract does not comply with all the requirements, a dispute will be adjudicated in accordance with the adjudication procedure in the Scheme for Construction Contracts (England and Wales) Regulations 1998 (SI 1998/649) (the Scheme for Construction Contracts 1998).
Prepare and serve the notice of adjudication. The notice of adjudication informs the other party that a dispute is to be referred to adjudication. The referring party must draft the notice of adjudication carefully, as it determines the scope of the matters dealt with in the adjudication.
Select and appoint an adjudicator. The adjudicator must be appointed and the dispute referred to him within seven days of service of the notice of adjudication. If the referring party fails to do this, it could lead to a successful challenge to the adjudicator’s jurisdiction and the adjudicator’s decision might not be enforced.
Prepare and serve the referral notice. The referring party sets out its case in the referral notice. It should be drafted carefully: it may be the referring party’s only opportunity to make submissions to the adjudicator. It is good practice to prepare the referral notice at the same time as the notice of adjudication.
The referring party must serve the referral notice on the adjudicator and the responding party within seven days of the notice of adjudication.
This quick guide was produced by PLC Construction
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