THE LAWYER AND ADJUDICATION

To adjudicate means to decide the outcome of a dispute between other people. Hence arbitrators, judges, tribunal panels and ombudsmen are all adjudicators. However, the Housing Grants, Construction and Regeneration Act 1996 (HGCRA) introduced a specific form of adjudication, for the settlement of disputes between commercial parties to construction contracts. From the perspective of the HGCRA adjudication has now started to become a term of art. Since HGCRA adjudication is compulsory, if opted for by a party to a commercial construction dispute, construction lawyers have had no option but to engage in the process. Outside the construction industry few lawyers are likely to have any experience of this form of adjudication. However, because the adjudication process established by the HGCRA has proved to be effective and popular, there is a strong likelihood that the process will be emulated on a voluntary basis by the commercial sector and applied to other industries.

Adjudication is a quick and inexpensive method of dispute resolution resulting in an immediately enforceable, temporarily binding dispute settlement, by a third person, known as the Adjudicator. The Adjudicator is likely to be an expert first and foremost but may also be a qualified lawyer. Most construction adjudicators are qualified builders such as architects, civil engineers and quantity surveyors. This helps the process because the adjudicator will not need to hear or read large quantities of expert evidence to help him understand how the industry operates. This keeps time down to a minimum and avoids much unnecessary expense.

The time scale for adjudication depends either on the 28 day statutory provision in the HGCRA, or on an agreed time frame in an adjudication clause incorporated into a contract. Voluntary adjudication clauses can be inserted into any contract and are not limited to the construction industry. The only difference is that instead of being governed by the statute the adjudication is governed by the contractual provisions and the rules of the ADR provider. Adjudication proceedings may be conducted with or without a hearing.

Paper only Adjudication.
The parties submit written claims, defences, counterclaims and legal submissions to the adjudicator along with expert reports and supporting evidence, having engaged in the usual exchanges of documentation. At an appointed time, the adjudicator goes through all the paperwork, makes a decision and publishes it. Whilst there is no opportunity at a paper only adjudication to make oral pleading and to engage in cross-questioning, the low cost of such adjudication proceedings is attractive. It is an ideal process for the settlement of disputes involving technical issues and straight forward differences of opinion between the parties.

Adjudication proceedings with hearings.
The process is very similar to a fast track arbitral hearing with strict time limits imposed on submissions and cross questioning.

Immediately binding and enforceable.
The adjudicator is given the authority by the parties to a dispute (or by Statute if applicable) to make a determination which is immediately binding and enforceable, subject to the terms of the award. Typically the losing party is ordered to pay the winning party a sum of money within a specific period of time. The settlement of the dispute at an early stage enables the parties to get on with business.

Temporarily binding.
The decision is only temporarily binding in that having complied with the order, the losing party is free to commence arbitration or litigation. Judging from the UK experience so far, it is rare for the parties to so dissatisfied with the adjudication decision that they decide to continue the dispute. Assuming that both parties are completely satisfied with the decision the dispute is at an end and in effect the decision is permanently binding and determinative of the dispute. Even if one of the parties is dissatisfied with the decision the parties are able to continue their business relationship, on the basis of the decision, pending arbitration or litigation.