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Adjudication
Its use by the Sub-contractor

The Quick Solution

Adjudication has over the past few years become the most popular form of dispute resolution in the construction industry.

Why? – Because it is a quick and relatively cheap means of disposing of problems between the parties to a building contract.
You may already be in dispute or it may be that you envisage a dispute arising in the near future.

Can adjudication help you? – Yes it most certainly can. First you should ask yourself the following questions:
• Is my contract a construction contract and is it in writing?
• Have I been underpaid, not paid at all, not received my rightful dues on time or have I suffered some other financial
misfortune.
• Has the payer withheld money against me without giving the proper notice?
• Have I suffered delay or are there alleged problems with the quality of my work?
• Am I in a dispute with my client about other issues not directly involving payment, for example is my client insisting that I
inspect the scaffolds or adopt a particular method of working?

IF YOUR ANSWER TO ANY OF THE FOREGOING QUESTIONS IS ‘YES’

You should certainly consider adjudication as a possible means of settling your differences.

If for example the payer has failed to give you notice of what you are to be paid, when you are to be paid and the basis of the
calculation of that sum, the payer will have almost certainly placed himself in breach of his obligations and adjudication can be
used to overcome the problems created by such a breach.

In light of the recent revision to the Housing Grants, Construction and Regeneration Act 1996 in the form of Part 8 of the
Local Democracy, Economic Development and Construction Act 2009 please find below the following amendments to the
Adjudication process that have been brought in:
Section 140 – Adjudicators Power to make corrections
The Adjudicator now has the power to correct errors in their decisions that have been brought about by clerical or
typographical mistakes, or that may have arisen by way of an accident or omission on the adjudicator’s part.
A 5 day period is provided for under the scheme for appeals to be lodged. Therefore any errors which require correcting must
be identified as soon as possible after the Adjudicators decision is issued.

Section 141 – Adjudicators Costs

Under Part 8 of the Local Democracy, Economic Development and Construction Act 2009 clauses that seek to allocate an
adjudicators costs prior to the matter being referred to adjudication are to be ineffective. These clauses where commonly
referred to within the industry as “Tolent Clauses”.
Such clauses can only be effective now if an agreement is made in writing after notice has been given of the intention to refer
the dispute or if it is provided in writing that the Adjudicator can make the allocation of costs themselves.

Steps to follow if you have a problem

Read the adjudication clause in your contract, if it does not have one do not panic as the Scheme for Construction Contracts
comes into play and provides the mechanism required for you to go to adjudication. If an adjudicator is named in your contract,
you will be required to refer your dispute to him / her.

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In the event that no adjudicator is named but and Adjudicator Nominating Body (ANB) is named then you should apply to that
named body to nominate an adjudicator to hear your Referral.
If the sub-contract has been left blank and no names deleted, then you may be stuck with whatever that form of contract says
in regard to a default mechanism.

This system is however about to change and upon the next revision of each of the JCT contracts, including the
sub-contracts, in the event that no deletions have taken place, the referring party will have the right to make
his own choice from the list of 4 nominating bodies shown.

The Procedure
It is vitally important that you follow precisely the following procedure when embarking upon an adjudication.

1. Ensure that your case is prepared or at least very well advanced.

2. Serve notice on the other party of your intention to refer your dispute to adjudication. The notice must include within it all the
matters that you wish the adjudicator to decide upon. This notice will determine what the adjudicator is able to decide
for he must not step outside the matters included in the Notice of Intent. For this reason it is advisable to seek
advice on the preparation of this document.

3. Immediately after serving the above notice you must complete and forward an application for nomination of an adjudicator
together any appropriate fee due.

Note: no agreement by the other party is normally required in order for you to proceed to adjudication

4. WITHIN 7 DAYS OF THE DATE OF YOUR NOTICE OF

INTENT you MUST send your case to the adjudicator with a Prepare your case
copy thereof simultaneously to the other party.

What next Issue your notice of intent

to refer your dispute to
When your adjudicator is appointed, your case is referred. The
adjudication to the
whole matter is now in the hands of the adjudicator. The
other party
adjudicator is required to deliver his decision within 28 days from
the date he received your Referral. The adjudicator will issue
directions as to how the adjudication will be conducted. The
decision will also decide what payment (if applicable) will be due Apply to a nominated
from one party to the other and the time limit in which that sum adjudicator OR apply to an
shall be paid.The adjudicator may further direct who is to pay the adjudicator nominating body
fees and expenses and will only give reasons for his decision if for a nomination
one or both of the parties has so requested.

Adjudicator will Send your referral to the

give directions adjudicator and the other
for conduct of party simultaneously
adjudication (This is the start of
the 28 day process)

Response from
Receipt of response
other party

Reply by claimant if
permitted by adjudicator

Adjudicators decision

Whilst every effort has been made to provide reliable and accurate information, we would welcome any corrections to information provided by the Writer which
may not be entirely accurate, therefore and for this reason, the NASC or indeed the Writer, cannot accept responsibility for any misinformation posted.

NASC NASC, 4TH FLOOR, 12 BRIDEWELL PLACE, LONDON EC4V 6AP

TEL: 020 7822 7400 FAX: 020 7822 7401
enquiries@nasc.org.uk www.nasc.org.uk
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