What is construction adjudication and when should I use it?

It allows any party to a construction contract including contractors and specialist subcontractors to refer a dispute to an independent adjudicator at any time.

The process was introduced in 1998 to protect cashflow across the construction supply chain and to provide a rapid way of resolving disputes, ensuring that contractors and specialist subcontractors are paid fairly without projects grinding to a halt.

In practical terms, adjudication operates as a fast and structured form of dispute resolution. An independent adjudicator reviews the arguments and evidence submitted by both parties and issues a decision within a strict timeframe, typically around 28 days. This is significantly quicker than traditional litigation or arbitration, which can take months or even years to conclude.

Adjudication is most commonly used when disputes arise over matters such as non-payment, late payment, underpayment of applications, delays, variations, or disagreements over the interpretation of contractual obligations. For example, if a specialist subcontractor has completed work but has not been paid in accordance with the payment terms of the contract, adjudication can provide a fast and enforceable route to resolving the dispute.

One of the defining principles of adjudication is often described as “pay now, argue later.” This means that the adjudicator’s decision is binding and must be complied with immediately, even though either party may later challenge the matter through arbitration or litigation if they wish.

There are several key benefits to using adjudication to resolve construction disputes:

• Speed – A decision is typically reached within around 28 days, helping to keep projects moving.
• Enforceability – The adjudicator’s decision is binding and can be enforced through the courts if necessary.
• Accessibility – Disputes can be referred to adjudication at any stage of a project, rather than waiting until completion.
• Cashflow protection – The process was designed specifically to ensure fair payment practices and prevent disputes from crippling contractors and specialist subcontractors during live projects.

In essence, construction adjudication provides a practical and accessible mechanism for resolving disputes quickly and maintaining balance within the construction supply chain. It was introduced to ensure that contractors and specialist subcontractors have an effective route to enforce payment rights without being forced into lengthy and expensive litigation.