When a dispute arises, it is essential to resolve it quickly and effectively, ensuring work can continue, to protect cashflow, and to prevent unnecessary costs. Adjudication provides a simple and efficient method of settling disputes without resorting to lengthy and expensive court procedure.
Adjudication involves an independent third party who considers the claims of both sides of the dispute and who makes a decision. It is a time-sensitive process, with adjudicators making a decision within 28 days. The result of the adjudication process is a judgment and court opinion that is legally binding, and unless revised by arbitration or litigation there is no right of appeal. Click here for more information on the process of adjudication.
An Adjudicator Nominating Body (ANB) appoints an adjudicator to resolve a dispute arising from a construction contract.
Why choose CIArb as your Adjudicator Nominating Body
How to name CIArb as your ANB
To name CIArb as your ANB in your construction contracts, use the following recommended clause.
If you already have a clause in place with a named ANB, think about adding CIArb and other ANBs to give you flexibility of choice should a dispute arise.
A party to this contract ("the Referring Party") may at any time give notice ("the Notice") in writing to the other party of its intention to refer a dispute arising under the contract to adjudication.
The parties may agree the identity of the adjudicator.
Where an adjudicator is not agreed within 2 days of the Notice being given the Referring Party shall immediately apply to the Chartered Institute of Arbitrators for the nomination of an adjudicator, which nomination shall be communicated to the parties within 5 days of receipt of the application.
Within 7 days of the Notice the Referring Party shall refer the dispute to the adjudicator. The adjudicator shall reach a decision within 28 days of referral or such longer period as is agreed by the parties after the dispute has been referred.
The adjudicator may extend the period of 28 days by up to 14 days, with the consent of the party by whom the dispute was referred.
The adjudicator shall act impartially.
The adjudicator may take the initiative in ascertaining the facts and the law. The decision of the adjudicator is binding until the dispute is finally determined by legal proceedings, by arbitration (if the contract provides for arbitration or the parties otherwise agree to arbitration) or by agreement.
The adjudicator is not liable for anything done or omitted in the discharge or purported discharge of his functions as adjudicator unless the act or omission is in bad faith and any employee or agent of the adjudicator is similarly protected from liability.
Follow our simple flowchart* to see how the process might unfold:
Click on the image below to enlarge.
*The above is provided for information only and should not be relied on. It is the user's responsibility to verify the information with the most recent version and seek legal advice. Flowchart was created on 12 July 2021.
Upcoming webinar - 22 September 2021
Beyond Construction: can adjudication be used more widely as a mechanism for resolving disputes?
The introduction of adjudication in the UK in 1996 as a means of dealing with construction disputes aimed to address specific characteristics of the construction sector – the need to maintain cashflow and resolve disputes quickly. However, these requirements are by no means limited to construction contracts; projects from IT to long-term service contracts often involve the same complexity, uncertainty and tight margins as are found in construction. This has led some to argue that the principles of adjudication could be beneficially applied beyond construction to any sector involving long-term, complex contractual relationships. In this panel discussion, we will hear directly from experts about how adjudication could be used more widely, the challenges that such innovations might face, and which sectors might benefit the most from a fast-track, adjudication-style resolution mechanism.
This event is open to both CIArb members and non-members. Pre-registration is required.
Click on a panel below to read in full.
"Since the Housing Grants, Construction and Regeneration Act 1996 came into force, any party to a construction contract has a statutory right to refer a dispute to adjudication. Conceived as an alternative to litigation, parties to a construction dispute can receive a temporarily binding Decision within 28 days of referring a dispute to adjudication.
CIArb was founded with the aim of promoting the equitable and efficient resolution of disputes, while keeping them out of the court system. Established in the UK in 1915, CIArb is one of the world’s oldest and leading providers of ADR and its training and qualifications are amongst the most prestigious.
Statutory adjudication and CIArb originated from the same ethos, which makes CIArb the obvious choice when selecting an Adjudicator Nominating Body."
- Simon Yates FCIArb, Director, Rowfield Commercial
Matt Molloy reflects on the past 25 years of adjudication in the UK
This year marks the 25th anniversary of the Housing, Grants Construction and Regeneration Act 1996 (the Construction Act) receiving Royal Assent, although it didn’t come into effect until 1 May 1998. With it came the introduction of statutory adjudication into the UK construction industry. How has this affected the sector? And what does the future hold?
Where have we come from?
The call for adjudication from certain sections of the construction industry came as a result of dissatisfaction with how disputes were dealt with in the UK. Litigation was a lengthy and expensive process and arbitration was perceived as the same, ie ‘litigation in suits’. Those players with deeper pockets could postpone payment for years after completion and engage in a drawn out process where only those with sufficient funds were able to last the course. Thus, in some way, adjudication was seen as a means of redressing the balance with the rubric of ‘pay now, argue later’.
At the time, the reception from the legal community was frosty. The titles of some of the papers published at the time give some clues:
The latter paper gives a characteristically strong and colourful account of the perceived shortcomings of ‘industry’ arbitrators or adjudicators and their seeming bias against the client or ‘paymaster parties’.
Where Are We Now?
It is fair to say that adjudication is now an embedded and integral part of the UK construction industry dispute resolution landscape. A key factor in this is the support and guidance the process has received from the Courts, most notably the Technology and Construction Court, its alumni in the Court of Appeal and further endorsement in the Supreme Court. Lord Justice Coulson’s parting gift before his elevation to the Court of Appeal in S&T (UK) Limited v Grove Developments Limited  EWHC 123 (TCC) and his subsequent leading judgment in Bresco Electrical Services Limited (in liquidation) v Michael J Lonsdale (Electrical) Limited and Cannon Corporate Limited v Primus Build Limited  EWCA Civ 27 (Bresco) give a flavour of the rise in status of the process. Lord Briggs’ opinion in the UK Supreme Court in Bresco ( UKSC 25) added even greater weight.
However, one aspect of the increase in status is the increase in complexity of the process. Allied with this is the effect it has on the cost of the process. Thankfully, there has been some progress in this regard, with the advent of low value dispute schemes, such as the CIC LVD Model Adjudication Procedure and the TeCSA LVD Scheme.
Where Are We Going?
Oscar Wilde is quoted as saying that “imitation is the sincerest form of flattery that mediocrity can pay to greatness”. Hence, we can see adjudication being adopted in other industries – for example, the Professional Negligence Bar Association and Society of Computers and Law have introduced adjudication schemes. There has also been an increased uptake of adjudication internationally. Perhaps predictably, this has been confined to common law and/or Commonwealth countries, but there are predictions that this may not always be the case. Germany, for instance – a civil law jurisdiction – has been considering the process. The International Federation of Consulting Engineers is also currently looking to cater for an increased demand for adjudicators on projects where its contracts are used.
Although training and qualification of adjudicators has developed in line with the increase in complexity, one concern among those who have invested in the training is the difficulty of developing a practice as an adjudicator. The situation is arguably similar to mediation and arbitration. However, the difference is that, historically, newly trained or qualified arbitrators or mediators were able to act as pupils or observers in order to get hands on experience and receive guidance from experienced practitioners which they could then use in support of getting onto panels and getting their first appointment. My view is that there is a real need for adjudication to follow suit in this respect.
Final Thoughts Adjudication is now a mature, complex and highly legal process. With this comes expense and an increased need for quality and accountability. Recent moves to make adjudication more accessible to SMEs in order to resolve low value disputes are welcome. However, low value does not necessarily equate with simplicity or an absence of complexity. Thus, the training requirements, case management and decision making skills are as, if not more, demanding for these types of disputes as for high value, complex disputes with sophisticated and experienced representatives. This provides a challenge. It also provides an opportunity.
About the Author
Matt Molloy is a Chartered Surveyor, Barrister and Chartered Arbitrator. He acts as a full time adjudicator, arbitrator and mediator in the UK and internationally. He is a Director of MCMS Limited and the current Chair of the CIC ADR Management Board.
You’ve made the exciting decision to become an adjudicator and now you want to get your new career off the ground. This short piece is designed to give you some initial thoughts to consider when working towards that first appointment and beyond.
As an adjudicator you are your own professional brand and you have sole responsibility for developing that brand and reputation within the industry.
A key skill you must have as an adjudicator is professionalism and you must always continue to display the key attributes of this. An adjudicator must have, and continually demonstrate, high ethical standards and conduct the role with honesty and integrity. An adjudicator should remain impartial and uphold the rules of the dispute resolution process throughout.
Those appointing you, either the parties directly or through a referral from an Adjudicator Nominating Body (‘ANB’) such as the Chartered Institute of Arbitrators (CIArb), will want an adjudicator who has knowledge and experience of the matter in dispute. When considering an appointment opportunity, you should think about what your knowledge of the disputed subject area is and the experiences you have had. This should not deter you from taking any appointment you are satisfied is within your capabilities, but you may wish to consider prior to accepting any appointment; why would a party find you an appropriate person to resolve their dispute?
You will also want to undertake formal training to gain knowledge and understanding of the role and practicalities of being an adjudicator. To maintain high standards in their own panels many ANB’s require you to demonstrate you have the knowledge and skills to be an adjudicator through undertaking a relevant qualification. By successfully obtaining one of these qualifications, you will demonstrate to others you have acquired the necessary knowledge of the role of an adjudicator at an industry recognised standard.
Once you have undertaken your initial training, it is expected that you will continue to undertake further relevant training and continue acquiring knowledge. This can be through further formalised training or Continuing Professional Development (CPD). CPD is provided through a variety of formats, including formalised events, i.e. seminars, webinars etc., or informally through continued reading of relevant materials.</p.
When you combine all of the above, you have the baseline of your brand as an adjudicator. Parties will be looking to you to lead the process and to keep up to date with developments in your field, the relevant law and the requirements of an adjudicator.
Developing and maintaining a good professional brand and reputation is key to receiving that first appointment and obtaining further opportunities. Your reputation and how you perform as an adjudicator will breed confidence in the parties and ANB’s in your dispute resolving abilities.
In building your brand the value of networking and making contacts in the industry cannot be underestimated. Developing a wide range of professional relationships will allow you to share knowledge and learn from others in the same field. Whilst recently this has been difficult due to the COVID-19 pandemic; once it is safe to do so, attending face to face seminars, conferences and other relevant events is a good way to meet new people and get your name out there as a dispute resolver.
You may find it useful to attend a variety of events hosted by relevant organisations to expand your networking reach and share/develop a range of ideas from numerous sources. One option is through the CIArb and its Young Members Group branches, which host numerous seminars and social events allowing members and non-members to get together to build their networks. Whilst you are attending these events don’t be afraid to speak to others and ask questions, many attendees will be more than willing to have a conversation.
The use of online forums and social media can assist with promoting yourself as an adjudicator, in particular LinkedIn. This could be through writing engaging articles or posts on relevant topics which other practitioners can read; or sharing your thoughts and values through contributing to relevant posts authored by others.
Building and engaging with your network of contacts is vital in promoting yourself within the marketplace. Making yourself visible to the wider adjudication community, demonstrating you have a good knowledge and understanding of the skillsets required to be an adjudicator, and demonstrating your commitment to the role can go a long way to building your brand and securing your first appointment.
You’ve started building your brand as an adjudicator, demonstrated your competence for the role and are ready to take on that first appointment; but how do you go about obtaining one?
Ideally, you would be able to obtain direct party appointments once you are satisfied in your competence to take on an appointment or would be able to join the main ANB adjudication panels. If these options are not open to you immediately, then there are other ways to try and obtain that first appointment or some relevant experience.
One route is through applying to ANB panels to receive appointments on their Low Value Adjudication Schemes (or alternatives). One example is the Construction Industry Council Low Value Disputes Model Adjudication Procedure (CIC LVD MAP). These schemes typically deal with disputes of values of less than £100,000 (each scheme sets a different limit), usually on a document’s only basis, and place restrictions on the costs which can be expended on the process. The number of these schemes has increased in recent years due to the popularity of the adjudication process and it can be a good avenue to obtaining that first appointment.
The role of experienced adjudicators as mentors could be useful in providing you with opportunities to shadow them throughout the process and provide experience in producing draft directions or awards. Agreement will be required from the parties to the dispute to enable you to shadow an appointed adjudicator. Industry Leaders are usually willing to offer guidance and support to those who show willing and initiative in trying to develop themselves in the role.
Experience of the adjudication process could be obtained through party representation or expert witness work. This will enable you to understand the processes the parties go through during an adjudication and give you experience of how adjudicators communicate with parties and write their directions / decisions. Whilst this may not be the first appointment you want; it will help you develop skills and an understanding of the process for when that first appointment arrives.
Above all be patient and keep persevering, it may take time to obtain that first appointment, but keep doing the right things to build your brand and it will come. The industry requires people like you to become the next generation of adjudicators.
Four potential steps to your first appointment:
1. Develop key skills and attributes
For example:- professionalism, high ethical standards, honesty and integrity.
2. Acquire and maintain your knowledge
Through formal training and Continuing Professional Development.
3. Build your brand and contacts
Through networking, attending events from relevant organisations and raising your profile via social media.
4. Get relevant experience
Join an ANB panel, seek a mentor and/or act as a party representative or expert witness.