Adjudication – How Does It Deal With Construction Disputes?
Adjudication – How Does It Deal With Construction Disputes?
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Home Page > Law > Cyber Law > Adjudication – How Does It Deal With Construction Disputes?
Adjudication – How Does It Deal With Construction Disputes?
Posted: Feb 21, 2011 |
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Adjudication is a form of alternative dispute resolution in which parties involved in a construction contract have a statutory right to use it, where an adjudicator will decide on an agreement to a dispute. It is meant to be quick and cheap, rather than looking at litigation or even other forms of alternative dispute resolution such as arbitration. It is usually to ensure that payment is made, but generally most types of disputes can be adjudicated. The time limit put forth for an adjudicator to decide the outcome of a dispute is generally no more than 42 days and the decision will be legally binding to all parties of the dispute and is usually upheld in court.
The range and processes of adjudication is set out in the provisions of the Housing Grants, Construction and Regeneration Act 1996 which concentrates on contracts relating to the construction industry, but more specifically construction contracts entered into after the 1st May 1998.
Adjudication is not free and the costs will greatly depend on the terms of the construction contract. The most common situation is that parties are not able to recover their own costs in the adjudication and therefore neither party can claim any money for fees incurred by lawyers or experts who have assisted with the construction dispute. Generally what will happen is that both parties will be jointly and severally liable for the adjudicator’s costs, but commonly an adjudicator can decide which party will have to pay his fees and reasonable expenses by apportionment between parties when a decision to the dispute has been made. Usually, the party that is successful to the adjudication will not have to pay the adjudicators fees. But nevertheless if the unsuccessful party then goes on to refuse to pay the adjudicator; the adjudicator can lawfully claim the fee from the party that had been successful. Even though there are no implied terms that an adjudicator can decide on payment of the parties’ costs, they can do so in the actual adjudication.
The 1996 Housing Grants, Construction and Regeneration Act states that construction contracts must include principles concerning the right to adjudication and if the construction contract does not comply with this provision, then the scheme for construction contracts will apply. The scheme sets out rules including all principles that need to be included in construction contracts. Once a referral has been made to an adjudicator, the adjudicator has to give his decision within 28 days. This can be extended to 42 days if there is an agreement with the referring party and extension is agreeable between both parties.
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