ADJUDICATION

Adjudication is a quick and inexpensive method of immediately enforceable, non-binding dispute settlement, by a third person, known as the Adjudicator. The time scale for adjudication depends on statutory provisions or an agreed time frame in the adjudication contract. In the UK the statutory time frame for Construction Adjudications is 28 days from submission of dispute to adjudication. NADR 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 his award. 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 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 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.

Non-binding.

The award is non-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 award that they decide to continue the dispute. Assuming that both parties are completely satisfied with the adjudication award the dispute is at an end. Even if one of the parties is dissatisfied with the adjudication award the parties are able to continue their business relationship, on the basis of the award, pending arbitration or litigation.

Arbitration / Litigation and the Adjudication.

The arbitrator / judge will be aware that an adjudication has taken place and inevitably will be aware that the claimant / plaintiff was not satisfied with the outcome of the adjudication. The arbitrator / judge will not know the details of the adjudication award until he has made his final award or ruling and turns his attention to the award of costs. If the claimant wins the arbitration or court case he will recover the monies paid out under the adjudication award and the costs of the claim. If he fails the adjudication award is undisturbed. The claimant covers the cost of the failed claim. If the arbitration award or court judgement is less than the adjudication award the claimant will have to pay the costs of the action.