Adjudication - Rough Justice?

Author:Mr Joe Wilkinson
Profession:Addleshaw Goddard

The experience of the adjudication process has been described to me by one intrepid person as batting without pads on a damp and overcast Sunday afternoon - you don't quite know what is going to happen, how long you will last, whether or not you will get hurt or quite how you will be treated by the umpire if he has left his glasses at home.

There are likely to be few organisations within the construction industry who are not now aware of adjudication. Statutory adjudication came into force on the 1st May 1998 under the Housing Grants, Construction and Regeneration Act 1996 ("the Construction Act"). For the good or the bad of it, the industry has had to adapt itself to a speedy form of dispute resolution where an adjudicator is to arrive at a decision within 28 days (which can be extended in limited circumstances). The decision is binding until such time as the dispute is finally determined by litigation, arbitration or agreement.

Enforcement - the losing party will generally have to pay

Following an adjudicator's decision if the losing party does not wish to pay, the Courts have done their utmost to enforce the adjudicator's decision by way of summary judgment. If the losing party should have a further argument about the merits of the adjudicator's decision then it could attempt to overturn it in either litigation or arbitration. It will have to pay over the monies awarded by the adjudicator. The adjudicator's decision is a temporary measure though nonetheless it is binding. By way of a summary:-

The decision of an adjudicator whose validity is challenged as to its factual or legal conclusions remains a decision that is both enforceable and should be enforced.

A decision that is erroneous, even if the error is disclosed by the reasons, will still not ordinarily be capable of being challenged and should, ordinarily, be enforced.

A decision may be challenged on the ground that the adjudicator was not empowered by the Construction Act to make the decision, because for example there was no underlying "construction contract" between the parties and therefore he had gone outside his terms of reference.

Adjudication is intended to be a speedy process in which mistakes will inevitably occur. The Courts have guarded against characterising a mistake in an answer to an issue, which is within an adjudicator's jurisdiction as being an excess of that jurisdiction.

Enforcement - exception where the Claimant is insolvent

Where a successful party in an...

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