Legal Framework for Construction Adjudication

Construction adjudication is primarily governed by statute. The following explains the key legal instruments and the rights they provide.

The Housing Grants, Construction and Regeneration Act 1996

Mandatory contractual adjudication was introduced by the Housing Grants, Construction and Regeneration Act 1996 (the Construction Act), which came into force in 1998. It was subsequently amended by the Local Democracy, Economic Development and Construction Act 2009.

Section 108 of the Construction Act requires construction contracts to include certain clauses regarding adjudication. If they do not, then the adjudication provisions of the Scheme for Construction Contracts apply.

The Act:

• applies to all UK construction contracts,
• includes some exceptions (e.g. residential occupier contracts),
• is mandatory and cannot be excluded by agreement, and
• applies to a wide range of contracts, including some that may not traditionally be seen as construction contracts.

The Scheme for Construction Contracts

The Scheme for Construction Contracts (“the Scheme”) is legislation which applies when construction contracts do not comply with certain requirements of the Construction Act.

Depending on the provisions in question:

• the clauses of the construction contract may be supplemented by the Scheme; or
• they may be replaced entirely by the relevant parts of the Scheme.

Specifically:

• Part 1 of the Scheme replaces adjudication provisions which do not comply with the Act;
• Part 2 supplements non-compliant construction contract payment provisions.

Rights of the Referring and Responding Parties

Both parties have rights under the principles of natural justice. These require that:

• they must be informed of the allegations made against them and be given an opportunity to answer those allegations; and
• they must have their case heard by an unbiased and impartial tribunal.

The Referring Party has the right to:

• unilaterally give the adjudicator a further 14 days to reach their decision;
• withdraw an adjudication at any time.

The Responding Party has the right to:

• respond to the Referral;
• choose not to participate in the adjudication (although this is often not the best approach in practice).

Does adjudication apply to all construction contracts?

The statutory right to adjudication applies to most construction contracts.

However, some exclusions apply. For example, residential occupier contracts are excluded unless they include an adjudication clause.

Can parties agree to extend deadlines?

The adjudicator’s deadline can be extended:

• by 14 days with the Referring Party’s consent; or
• for a longer period if both parties agree.

You may also be interested in reading:

• What if someone starts an adjudication against you?
• How Construction Adjudication Works
• Challenging, Appealing & Correcting Adjudication Decisions
• Enforcement of Adjudication Decisions
• The Adjudicator: Role, Appointment & Qualifications

Free initial enquiry

Our construction adjudication specialists would ideally be involved as soon as possible and before an adjudication notice is served. Whatever stage you are at, you can increase your prospects of success immediately by discussing matters with us. A free initial consultation with us at an early point could mean a drastically different result at the end of an adjudication.

We offer a free one hour initial consultation for new clients. Please contact us by phone, email or using our contact form for a free initial consultation. We can discuss how we can help you get the most out of the adjudication process.

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