Mark London explains what it is and what you should do if you're threatened with it
Adjudication is the most popular way of resolving disputes within the construction industry.

Since this quick and lower-cost method was introduced in the 1996 Housing Grants, Construction and Regeneration Act, there has been a radical shift in the way construction disputes are dealt with – away from litigation and towards using adjudication.

This means registered social landlords and councils that work with building contractors will undoubtedly have to respond to adjudication, or its threat, at some point.

Here is a rough guide to responding – what to look for and how to prepare.

Can you challenge jurisdiction?
An adjudication is run by an adjudicator – a nominated third party who makes the decision. The adjudicator only has jurisdiction to decide on a dispute that has arisen between parties to a written construction contract.

A great deal of time has been spent arguing over what constitutes a dispute, and the courts have held that "it must be clear that a point has emerged from the process of discussion or negotiation that has ended and that there is something that needs to be decided".

So there are two initial questions to ask: is there a dispute? And is there a construction contract in writing?

This should be pretty obvious to most readers, but is worth underlining. An oral agreement or something written on a scrap of paper will almost certainly fail the test.

RSLs and councils that work with building contractors will undoubtedly have to respond to the threat of adjudication at some point

If you believe that there may not be a dispute, or that you are not dealing with a construction contract, or that the contract may not be in writing, you may well have grounds to challenge the jurisdiction of the adjudicator and thereby stop the process.

If you decide to do so, get your challenge in as soon as you can. The adjudicator will then examine the case. If they conclude they do not have jurisdiction in this particular instance, the adjudication falls away. If they decide they have, you will need to reserve your rights, which means to leave open the possibility of a challenge at a later date.

Look at the details

In order to minimise the difficulties caused by the response time, it is essential to ensure that your documents and records are in good order. If there's a dispute brewing with a contractor, it is always good practice to do the following:

  • if you can, make sure that all the documents relevant to the dispute are kept in a central file, even if they are only copies. Liaise with your employer's agent or architect to ensure that any and all relevant documentation and correspondence are included. This will help you prepare a logical and detailed response to the claim
  • get on with preparing your case before the adjudication is launched. If, for example, a contractor has threatened to start adjudication over a loss and expense claim, then get the employer's agent to prepare a report on the claim: in other words, what is it based on? Why was it rejected? This will save valuable time when the adjudication begins. Your advisers will appreciate it
  • offer to meet the contractor to discuss the dispute. If you believe the contractor is entitled to something, make a written offer in an open letter. An adjudicator will want to see this, and it may have a bearing on costs.

It's in the presentation
A well-structured response will nearly always make a good impression on an adjudicator, especially if the contractor's case has been poorly presented.

The tips here are basic, but important:

  • only provide the adjudicator with relevant evidence. As we all know, there's nothing worse than having to sift through piles of irrelevant information. Be concise to impress the adjudicator
  • make sure the response is easy to follow and is logical. All correspondence should be in chronological order and all diagrams and drawings should be complete and easy to read
  • cause the adjudicator as little difficulty with your response as you can: make sure all photographs are dated, exhibits attached to statements and so on.

If you have taken the steps both to consider jurisdiction and prepare your response properly, then you have given yourself the best possible chance of success.

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