What is a construction adjudication?
Adjudication is a form of alternative dispute resolution which is specific to construction disputes. The purpose behind adjudication is to resolve disputes quickly and provide a cash-flow remedy, while keeping intact working relationships, in order that construction projects can continue without delay, fallout or great cost.
Notwithstanding the above, adjudications can be an expensive process due to the intensive work required in order to meet what can be very short deadlines. A typical adjudication can cost upwards of £35,000 and therefore can be an unaffordable option in relation to construction disputes of a lower value, and something that smaller law firms cannot always assist clients with.
A New Model
In light of this a professional body, the Construction Industry Council, are launching a new model of adjudication that hopes to cut the cost burden on lower value disputes in order to address the issues above. This new model had received support from 10 adjudicator nominating bodies including the Royal Institution of Chartered Surveyors (RICS) and the Royal Institute of British Architects (RIBA). All ten participating adjudicator nominating bodies have expressed an interest in rolling out similar models in the future.
Under this new model, newly-qualified adjudicators will be able to gain experience in deciding low-value disputes, with the benefit of this keeping costs lower than they would usually be during a typical adjudication. The new approach will aim to link an adjudicator’s fee to the amount being claimed for, with the benefit of added certainty as to how much the adjudicator will be paid.
This streamlined adjudication procedure is designed for claims of £50,000 or less, and is predominantly for use in situations of relatively uncomplicated disputes. This new procedure aims to help parties who are owed monies in relation to a building project recover those monies quickly and also retain more of their award.
There will however be the potential for costs to mount up even with this lower-value adjudication option if parties still want to use professional advisors or solicitors to guide them through the process and ensure that they have the best chance of being awarded something by putting forward their best possible case. It is our experience that it is generally only worth instructing a solicitor to deal with an adjudication if the value of the dispute is over £100,000, particularly in circumstances where parties cannot recover legal costs incurred in relation to adjudication.
Our specialist Construction Team can offer advice on all aspects of contentious and non-contentious construction matters. If you need advice on a construction dispute or need assistance with a construction project, please do not hesitate to contact a member of Myerson’s Construction Team on 0161 941 4000 or via lawyers@myerson.co.uk