Adjudication is a dispute resolution procedure. It is often confused with other forms of alternative dispute resolution. For the purposes of this guide, adjudication is a reference to the procedure introduced in the UK in 1996 by the Housing Grants, Construction and Regeneration Act (the 'Construction Act').
The adjudicator's authority is granted by the contract between the two parties and either the Construction Act or the Scheme for Construction Contracts (England and Wales) Regulations (the Scheme). The party who prepares the Notice of Adjudication and referral notice sets the limits of the adjudicator's jurisdiction. The adjudicator must only decide the issues referred to him in those documents, even if he thinks that further matters need to be investigated.
The Construction Act sets out the minimum duties and powers of an adjudicator. Where necessary, the Scheme will apply in default, but parties can - and often do - give the adjudicator greater powers under the terms of the contract or any contractual adjudication rules that are referred to in the contract.
Powers and duties given by the Scheme
The Scheme sets out the adjudicator's procedural powers. To the extent that these are not expressly set out in the parties' contract, they will be implied into it. They include the power to:
- request any party to the contract supply him with documents that he reasonably requires to determine the issues before him, including written statements;
- meet and question any of the contracting parties and their representatives (although many disputes are decided on the basis of written submissions alone);
- make site visits and inspections;
- appoint experts, assessors or legal advisors, provided that the adjudicator notifies the parties of his intention to do so;
- give direction as to the adjudication timetable, any deadlines or limits as to the length of written documents or oral representations to be complied with;
- issue other directions relating to the conduct of the adjudication.
The cost and timing of the adjudication should be proportionate to the issues to be determined, and an adjudicator must avoid incurring any unnecessary expense in determining whether to exercise these powers.
Power to rule on his own jurisdiction
If a challenge is made to an adjudicator's jurisdiction, then the adjudicator can investigate that challenge and can either conclude that the challenge:
- is well founded, in which case he must resign;
- is not well founded, in which case he must proceed with the adjudication and decide the dispute. In such a case, either party can reserve its position on jurisdiction and continue participating in the process on the basis that they do so without prejudice to the jurisdictional challenge. This challenge can then later be raised in enforcement proceedings.
Powers under other rules
The parties' contract may contain its own rules for adjudication, or may incorporate a set of adjudication rules published by an industry body. Reference should be made to the specific contractual rules for the extent and scope of the adjudicator's powers as the rules may differ from those under the Scheme.
Remuneration and liability
An adjudicator is entitled to be paid his reasonable fees and expenses. The adjudicator will determine what he believes to be reasonable, and he also has the power to decide which party pays him.
The parties are jointly and severally liable for the adjudicator's fees even after the adjudicator has made a decision as to payment. This means that if the adjudicator's fees are ordered against one party, the other party remains liable unless and until those fees are paid by that other party.
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