A Practical Guide to Construction Adjudication

In the United Kingdom, adjudication is available as a right for parties to a construction contract, following the enactment of the Housing Grants Construction and Regeneration Act 1996. In general, within a comparatively short period of time, parties in dispute will have a decision from an adjudicator, which, except in limited circumstances, the courts will enforce. Adjudication has become the number one method of dispute resolution in the construction industry.

The short timescale means that a party needs to know what to do, when to do it and be able to check that the other party and the adjudicator are following the right steps. A PracticalGuide to Construction Adjudication gives parties the necessary information to achieve this. It provides a straightforward overview of the process and procedure of adjudication by reference to legislation and case law, augmented with practical guidance including suggestions on what to do or not to do, drafting tips and checklists. Separate chapters for Scotland and Northern Ireland identify and explain the differences in procedure and judicial interpretation between those jurisdictions and England and Wales, and further detailed explanations of the adjudication regimes in Australia, Ireland, Malaysia, New Zealand and Singapore are included. Each of the chapters on jurisdictions outside England and Wales has been written by senior experts in those jurisdictions to ensure the content is accurate and insightful.

There are a range of helpful appendices including a bank of model form adjudication documents and tabulated detailed comparisons of the Scheme for Construction Contracts, the other major adjudication rules, the major adjudicator nominating bodies and the UK and international regimes. Readers will particularly appreciate the most comprehensive index of adjudication cases available, sorted into 260 subject headings providing immediate access to all the reported cases on any adjudication topic.

Foreword v

Acknowledgements vii

Part I The United Kingdom

1 Introduction 3

1.1 Overview 3

1.2 Background to statutory adjudication in the UK 4

1.3 Statutory adjudication regimes 5

1.4 Use of case law in this part 6

2 Adjudication in a nutshell 9

3 Deciding to adjudicate 13

3.1 Overview 13

3.2 Do I have a claim? 14

3.3 Is it worth it? 15

3.4 Is adjudication the right forum? 18

3.5 Other forms of ‘rapid’ dispute resolution 24

3.6 Adjudication on behalf of, or against, an insolvent party 30

3.7 Who to involve 40

3.8 Checklist: considering whether or not to adjudicate 42

4 Statutory adjudication 43

4.1 Overview 43

4.2 Old or new act 44

4.3 Existence and terms of a contract 44

4.4 Construction contract 49

4.5 Construction operations 55

4.6 Excluded construction operations 58

4.7 Excluded agreements 62

4.8 Contract in writing 66

4.9 Checklist: What form of adjudication am I subject to? 74

5 Contractual and ad hoc adjudication 75

5.1 Overview 75

5.2 Contractual adjudication 75

5.3 Ad hoc adjudication 79

6 Adjudication procedure 83

6.1 Overview 83

6.2 Scheme 84

6.3 Contractual procedures 88

6.4 Checklist: What adjudication procedure am I subject to? 96

7 Preconditions and restrictions to statutory adjudication 97

7.1 Overview 97

7.2 Is there a dispute? 98

7.3 More than one dispute 108

7.4 Substantially the same dispute (Scheme p. 9) 111

7.5 Does the dispute arise ‘under’ the contract (Act s. 108(1))? 115

7.6 More than one contract 117

7.7 Commencing an adjudication ‘at any time’ 119

8 Adjudication strategy 123

8.1 Overview 123

8.2 Commencing the adjudication process 123

8.3 More than one adjudication 125

8.4 Choosing the dispute to refer 126

8.5 Deploying arguments 139

8.6 Assessing the other party’s willingness and ability to pay 141

8.7 Removing procedural uncertainty 142

9 Initiating the adjudication 144

9.1 Overview 144

9.2 A precis on jurisdiction and natural justice 145

9.3 Notice of adjudication 146

9.4 Checklist: Before serving the notice of adjudication – referring party 151

9.5 Checklist: On receiving the notice of adjudication – responding party 151

9.6 Appointing the adjudicator 152

9.7 Checklist: Appointing the adjudicator – referring party 171

9.8 Checklist: Appointing the adjudicator – responding party 171

9.9 Checklist: Accepting the appointment – adjudicator 172

10 The adjudication 173

10.1 Overview 173

10.2 Referral notice 174

10.3 Response 181

10.4 Reply, rejoinder and sur-rejoinder 184

10.5 Meetings 186

10.6 Other matters 188

10.7 Adjudicator’s powers and duties 201

10.8 Checklist: Managing the adjudication – the adjudicator 212

11 The decision 214

11.1 Overview 214

11.2 What is the adjudicator required to do? 214

11.3 On receiving the decision 218

11.4 Timing 219

11.5 Effect and compliance 223

12 Post decision 227

12.1 Overview 227

12.2 Adjudicator’s costs 228

12.3 Parties’ costs 233

12.4 Apportioning costs 237

12.5 Correcting errors in the decision 239

12.6 Setting off against the decision 241

13 Enforcement: options and procedure 249

13.1 Overview 249

13.2 Key statements of principle and the court’s policy 249

13.3 TCC summary enforcement procedure 252

13.4 Other procedures for enforcement 276

13.5 Complying with an order of the court 280

13.6 Checklist: Avoiding the consequences of an adjudicator’s decision 284

14 Enforcement: insolvency, stay and severability 285

14.1 Overview 285

14.2 Insolvency avoids summary judgment 286

14.3 Stay of execution 290

15 Final determination 304

15.1 Overview 304

15.2 Finalising the adjudicator’s decision 305

15.3 Adjudication and other proceedings 307

15.4 Commencement, onus of proof and costs 312

16 The adjudicator’s jurisdiction 319

16.1 Overview 319

16.2 When to think about jurisdiction 319

16.3 Options when a jurisdictional issue arises 320

16.4 Losing the right to challenge the adjudicator’s jurisdiction 331

16.5 Threshold jurisdiction challenges 338

16.6 Process jurisdiction challenges 342

16.7 Decision based jurisdiction challenges 349

16.8 Checklist: Jurisdiction – the parties 360

16.9 Checklist: Jurisdiction – the adjudicator 361

17 Natural justice 362

17.1 Overview 362

17.2 When to think about natural justice 364

17.3 Options when a natural justice point arises 364

17.4 Bias and apparent bias 366

17.5 Procedural fairness 378

17.6 Checklist: Natural justice – the parties and the adjudicator 399

18 Further grounds for resisting enforcement 400

18.1 Overview 400

18.2 Fraud or deceit 401

18.3 Duress 402

18.4 UTCCR 403

18.5 Human Rights Act 404

19 Scotland: Tony Jones 406

19.1 Overview 406

19.2 Differences between the Scheme and the Scottish Scheme 408

19.3 Enforcement of an adjudicator’s award 411

19.4 Issues of divergence between England and Wales and Scotland 418

20 Northern Ireland: Michael Humphreys QC 427

20.1 Overview 427

20.2 Enforcement of adjudicators’ awards 429

20.3 An alternative remedy – declaratory relief 434

20.4 Judicial consideration 435

Part II International

21 Introduction 443

22 Australia: Peter Wood and Phillip Greenham 446

22.1 Overview 446

22.2 Requirements for commencing an adjudication 449

22.3 Adjudication process 453

22.4 Determination, effect and costs 456

22.5 Enforcement 458

23 Ireland: Dermot McEvoy 461

23.1 Overview 461

23.2 Requirements for commencing an adjudication 462

23.3 Adjudication process 464

23.4 Determination, effect and costs 469

23.5 Enforcement 470

23.6 Conclusion 471

24 Malaysia: Philip Koh 473

24.1 Overview 473

24.2 Requirements for commencing the adjudication process 474

24.3 Adjudication process 478

24.4 Administration of the adjudication 481

24.5 Determination, effect and costs 482

24.6 Enforcement 484

24.7 Conclusion 485

25 New Zealand: Tómas Kennedy-Grant QC 487

25.1 Overview 487

25.2 Requirements for commencing an adjudication 488

25.3 Adjudication process 490

25.4 Determination, effect and costs 493

25.5 Enforcement 496

25.6 Proposed amendments 500

26 Singapore: Steven Cannon 501

26.1 Overview 501

26.2 Requirements for commencing an adjudication 502

26.3 Payment regime 504

26.4 Adjudication process 508

26.5 Determination, effect and costs 515

26.6 Enforcement 518

26.7 Conclusion 520

Appendices

Appendix 1 – The 1996 Act as amended 523

Appendix 2 – The 1998 Scheme as amended 530

Appendix 3 – Glossary (UK only) 538

Appendix 4 – Model forms 542

Appendix 5 – Summary comparison of UK adjudication rules 561

Appendix 6 – Details of UK adjudicator nominating bodies 570

Appendix 7 – Comparison of UK and international statutory regimes 578

Appendix 8 – Case index: by subject matter 584

Appendix 9 – Alphabetical case index 678

Index 709

James Pickavance is a partner in the construction and engineering practice of Eversheds LLP, specialising in dispute resolution. He has experience of all forms of dispute resolution, in particular contractual and statutory adjudication, domestic and international arbitration, expert determination, mediation and litigation, and advises public bodies, governments, international corporations and private clients on domestic and international, single or multi-jurisdictional disputes across a range of industry sectors in over 20 jurisdictions.