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Is adjudication compulsory for construction disputes?

When it comes to resolving construction disputes, adjudication is often the industry’s first choice after mediation or informal negotiation, but is it compulsory?

The answer depends largely on the nature of the contracts involved and the application of the Housing Grants, Construction and Regeneration Act 1996 (commonly referred to as the Construction Act 1996).

The recent report Adjudication in Practice: The Role of the Construction Act 1996, published by King’s College London, sheds light on how adjudication has evolved and why it has become so integral to the construction industry.

What is adjudication, and when does it apply?

Adjudication is a legal process designed to resolve disputes quickly and efficiently.

Under the Construction Act 1996, any party involved in a construction contract as defined by the Act, has the statutory right to refer disputes to adjudication.

While many construction contracts include clauses that explicitly permit adjudication at any time, their use depends on the terms agreed upon by the parties.

However, even where a contract is silent, statutory adjudication rights may still apply if the Construction Act governs the agreement.

Why has adjudication gained popularity?

According to the report, adjudication is particularly well-suited to the unique challenges of the construction sector.

The high stakes involved in costs, timelines, and safety make swift and reliable dispute resolution essential.

Adjudication offers a binding result faster and often more cost-effectively than litigation. As a result, its use has increased significantly, becoming a preferred route for many industry professionals.

Key advantages of adjudication

Adjudication provides several benefits that make it an attractive option compared to litigation or mediation:

Speed – Litigation can take months or even years, whereas adjudication typically concludes within 28 days, making it a far quicker option.
Cost-effectiveness – While adjudication is not without costs, it is often far less expensive than litigation. However, it is worth noting that legal costs are not recoverable.
Legally binding outcomes – Unlike mediation, adjudication results in a determination that can be enforced or made binding by the courts if necessary.
Privacy and confidentiality – Adjudication proceedings are private, offering a level of discretion not guaranteed with litigation.

Is adjudication the right choice for you?

Adjudication is not compulsory, but for disputes arising under construction contracts, it remains an exceptionally useful tool.

It allows parties to resolve disputes efficiently and with a degree of finality, without the prolonged timelines or public scrutiny of court proceedings.

However, adjudication is not a one-size-fits-all solution.

Depending on the complexity of your case, alternative options such as negotiation, mediation, or even arbitration may be more appropriate.

Consult with our team of experienced solicitors today to discuss your options and choose the best course of action.