Adjudication in Construction: How does adjudication work in practice?

When you receive a notice of adjudication, consider five crucial points: First, verify if a construction contract exists and understand its terms. Second, confirm the dispute has crystallized, meaning both parties acknowledge an issue needs resolution. Third, ensure the dispute in the notice is the same as the crystallized dispute. Fourth, check if the adjudicator's appointment is valid according to contract terms. Finally, evaluate if there are grounds to challenge the adjudicator's appointment or jurisdiction, or if alternative dispute resolution, like mediation, should have been pursued first.

The first step in the adjudication process is the Notice of Adjudication. This initial document is prepared by the party referring the dispute (the referring party) and sent to the other party (the responding party). It provides an outline of the dispute and informs the responding party that the matter is being referred to adjudication.

The next stage involves selecting and appointing an adjudicator. It's crucial to check the construction contract for any specified requirements for the adjudicator, such as expertise in the construction industry or membership in a particular professional body. Once the contract terms are followed and a suitable person is identified, the referring party typically appoints them as the adjudicator.

Following the adjudicator's appointment, the referring party issues the Referral Notice. This is a much more detailed document sent to both the responding party and the adjudicator, outlining the comprehensive facts and legal analysis of their case. This document serves as the main submission from the referring party in the adjudication.

The fourth step is the Response to the Referral Notice, where the responding party has the opportunity to review the referral notice and provide their detailed reply. In this document, they set out what they agree or disagree with from the referring party's submission, along with their justifications.

The final stage is the Adjudicator's Decision. The adjudicator considers all submitted documents, including the notice of adjudication, referral notice, response, and any supplementary evidence or witness statements. Based on these papers, the adjudicator makes a decision, which is generally binding unless the dispute is later determined by arbitration, court proceedings, or a mutual agreement between the parties. While an adjudicator cannot award legal costs to either party, they can allocate their own costs between the parties, typically splitting them 50/50 initially but with the power to alter this split in their decision.