Construction Adjudication: The Fastest Route to Getting Paid

A binding decision in 28 days, enforceable as a court judgment. If you are owed money on a construction project, adjudication is the tool Parliament designed for you.

Cash flow is the lifeblood of the construction industry. When a contractor, subcontractor, or consultant is not paid for work they have done, the consequences cascade rapidly — wages go unpaid, suppliers go unpaid, and businesses fail. Parliament recognised this problem in the mid-1990s and created a statutory right to rapid dispute resolution: construction adjudication.

Adjudication under the Housing Grants, Construction and Regeneration Act 1996 (commonly known as the "Construction Act" or HGCRA) is now the dominant method of resolving payment disputes in the construction industry in England and Wales. It is fast, relatively cheap, and its decisions are immediately enforceable. If you work in construction and you are not getting paid, you need to understand how it works.

The Statutory Right to Adjudicate: Section 108 HGCRA 1996

Section 108 of the HGCRA 1996 (as amended by the Local Democracy, Economic Development and Construction Act 2009) provides that a party to a "construction contract" has the right to refer a dispute arising under the contract for adjudication under a procedure complying with the Act. This is a statutory right — it cannot be contracted out of. Any term in a construction contract that purports to prevent a party from referring a dispute to adjudication is void.

The Act requires that the adjudication procedure must comply with certain minimum requirements:

• The adjudicator must be appointed within 7 days of the notice of adjudication.
• The adjudicator must reach a decision within 28 days of referral (extendable by 14 days with the referring party's consent, or longer with the agreement of both parties).
• The adjudicator must act impartially.
• The adjudicator may take the initiative in ascertaining the facts and the law.

If the construction contract does not contain an adjudication procedure that complies with these requirements, or if it contains no adjudication provisions at all, the Scheme for Construction Contracts (England and Wales) Regulations 1998 (the "Scheme") is implied into the contract. The Scheme provides a complete, default adjudication procedure.

What Is a "Construction Contract"?

The right to adjudicate applies only to "construction contracts" as defined in sections 104 and 105 of the HGCRA. The definition is broad. It covers agreements to carry out construction operations, agreements to arrange for construction operations to be carried out by others (e.g. management contracts), and agreements to provide architectural, design, surveying, or advisory services relating to construction operations.

"Construction operations" include building work, civil engineering, installation of mechanical and electrical systems, demolition, site clearance, painting, decorating, landscaping, and many other activities. The key exclusions are set out in section 105(2) and include the extraction of oil, gas, or minerals, the manufacture or delivery of materials or plant (unless installed on site), and contracts with residential occupiers (i.e. homeowners having work done on their own home).

The 2009 amendments extended the Act to oral construction contracts, which had previously been excluded. This was a significant change — it means that even where there is no written agreement, the statutory right to adjudicate applies.

Who Can Be an Adjudicator?

The adjudicator must be a natural person (not a company). In practice, adjudicators are typically experienced construction professionals — chartered surveyors, engineers, architects, or construction lawyers — who have undergone specialist training and are registered with one of the recognised Adjudicator Nominating Bodies (ANBs). The principal ANBs include the Royal Institution of Chartered Surveyors (RICS), the Chartered Institute of Arbitrators (CIArb), the Technology and Construction Solicitors' Association (TeCSA), and the Royal Institute of British Architects (RIBA).

The contract may name a specific adjudicator or a specific ANB. If it does not, or if the named adjudicator is unavailable, the referring party can apply to any ANB for a nomination. The ANB will select an adjudicator with appropriate expertise and availability. The nomination fee is typically between 250 and 400 pounds plus VAT.

The adjudicator must act impartially, but the procedure is not subject to the same rigorous requirements of natural justice that apply to court proceedings or arbitration. The adjudicator can take the initiative in ascertaining the facts and the law — this means they are not limited to the evidence and arguments put before them by the parties.

The 28-Day Timetable

The speed of adjudication is its defining feature. The typical timetable runs as follows:

Day 0: Notice of Adjudication. The referring party serves a notice of adjudication on the other party. This is the formal commencement of the process. The notice must set out the nature and a brief description of the dispute, the parties involved, when and where the dispute arose, the nature of the redress sought, and the names and addresses of the parties. The notice should be drafted carefully — it defines the scope of the adjudicator's jurisdiction.

Days 1-7: Appointment of Adjudicator. Within 7 days of the notice, the adjudicator must be appointed. The referring party will either contact a named adjudicator or apply to an ANB for a nomination. Once appointed, the adjudicator will issue directions setting out the timetable and the procedure to be followed.

Day 7: Referral. On or before day 7, the referring party must serve its referral notice on the adjudicator. The referral is the substantive document — it sets out the claim in detail, supported by evidence. The referral should include the relevant contractual documents, correspondence, valuations, programmes, photographs, and any expert reports. Everything the adjudicator needs to decide the dispute should be in the referral.

Days 8-14: Response. The responding party will typically have 7 days (sometimes more, depending on the adjudicator's directions) to serve its response. This is a tight deadline, and responding parties frequently complain about the lack of time. However, the courts have consistently held that the compressed timetable is a feature of adjudication, not a defect.

Days 15-21: Reply and Further Submissions. The adjudicator may permit a reply from the referring party and any further submissions or evidence. Some adjudicators also conduct site visits or oral hearings, though these are not the norm.

Day 28: Decision. The adjudicator must reach and communicate their decision within 28 days of the referral. The referring party can consent to a 14-day extension (taking the deadline to 42 days), and both parties can agree to a longer extension. In practice, extensions are common in complex disputes.

The Decision and Its Effect

The adjudicator's decision is binding on the parties and must be complied with immediately, unless and until it is revised by the court in subsequent litigation or by an arbitrator. This is often described as "temporarily binding" — the decision stands unless one party commences court or arbitration proceedings to have the underlying dispute finally determined.

In practice, the vast majority of adjudication decisions are never challenged. The decision is complied with, the money is paid, and the parties move on. Adjudication provides commercial finality even though it is technically only interim.

Enforcement: Macob v Morrison and the Summary Judgment Route

What happens if the losing party refuses to comply with the adjudicator's decision? The answer was established definitively in the landmark case of Macob Civil Engineering Ltd v Morrison Construction Ltd [1999] BLR 93, one of the first adjudication enforcement cases to reach the Technology and Construction Court (TCC).

Mr Justice Dyson (as he then was) held that an adjudicator's decision could be enforced by way of summary judgment under CPR Part 24. The court will enforce the decision unless the responding party can show a real prospect of successfully defending the claim — and in the context of adjudication enforcement, the only grounds on which the court will refuse to enforce are:

• The adjudicator lacked jurisdiction — for example, the contract was not a "construction contract" within the meaning of the Act, or the dispute referred was not the dispute described in the notice of adjudication.
• A serious breach of natural justice — for example, the adjudicator failed to consider a key submission, or decided the dispute on a basis that neither party had argued without giving them the opportunity to address it.

The courts have made clear, in case after case, that they will enforce adjudication decisions robustly. Errors of fact or law by the adjudicator are not grounds for refusing enforcement. The policy of the Act — to provide rapid, enforceable decisions to maintain cash flow in the construction industry — requires the courts to give effect to adjudicators' decisions, even imperfect ones.

"The intention of Parliament in enacting the 1996 Act was plain. It was to introduce a speedy mechanism for settling disputes in construction contracts on a provisional interim basis, and the requirement that the decision of the adjudicator is binding until the dispute is finally determined... is to be given effect to." — Dyson J in Macob v Morrison

Costs of Adjudication vs Litigation

One of the principal advantages of adjudication is cost. A typical adjudication will cost a fraction of what court proceedings would cost for the same dispute. Consider the comparison:

Adjudication costs. The adjudicator's fees will typically range from 5,000 to 25,000 pounds depending on the complexity and duration of the dispute. Legal costs for preparing the referral or response will vary, but for a straightforward payment dispute, total costs (including the adjudicator's fees) of 15,000 to 40,000 pounds are typical. The entire process takes 28 to 42 days.

Litigation costs (TCC). Proceedings in the Technology and Construction Court for a comparable dispute would typically take 12 to 18 months to reach trial and cost between 80,000 and 300,000 pounds or more per party, depending on complexity. Add in disclosure, witness statements, expert reports, and a multi-day trial, and costs escalate rapidly.

Arbitration costs. Construction arbitration is generally quicker than litigation but more expensive than adjudication. Costs of 50,000 to 200,000 pounds per party are common, with a timeline of 6 to 12 months.

The cost advantage of adjudication is compelling, but there is an important caveat: each party generally bears its own costs. Under the Scheme and most adjudication procedures, the adjudicator has no power to order one party to pay the other's legal costs — only the adjudicator's own fees can be allocated. This means that even if you win, you will not recover your legal costs from the other side (unless the contract specifically provides for it, which is rare).

Common Pitfalls and Tactical Considerations

For the Referring Party

• Get your notice of adjudication right. The notice defines the adjudicator's jurisdiction. If it is too narrow, you may not be able to claim everything you want. If it is too broad or ambiguous, the responding party may challenge jurisdiction.
• Prepare the referral before you serve the notice. You have only 7 days between the notice and the referral. In practice, the referral should be substantially complete before you fire the starting gun.
• Choose the right adjudicator. If the contract does not name one, select an ANB and, if possible, request an adjudicator with specific expertise in the type of dispute (e.g. quantum, delay, defects).
• Include everything in the referral. You cannot assume you will get a second chance to submit evidence. Put your best case forward on day 7.

For the Responding Party

• Act immediately. You will have very little time. The moment you receive the notice of adjudication, start preparing your response. Do not wait for the referral.
• Check jurisdiction. Is this a construction contract? Is the dispute correctly described in the notice? Has the right to adjudicate been exercised in accordance with the contract? Jurisdictional challenges are the most effective defence.
• Do not ignore the adjudication. If you fail to respond, the adjudicator will decide on the material before them — which will be entirely the referring party's case. The decision will still be enforceable.

After the Decision: What Are Your Options?

If you are unhappy with the adjudicator's decision, you have several options. You can comply with the decision and then commence court proceedings or arbitration to have the dispute finally determined — seeking to recover the money paid if the court or arbitrator reaches a different conclusion. You can resist enforcement, but only on the narrow grounds of jurisdiction or natural justice. Or you can accept the decision and move on, which is what most parties do.

What you must not do is simply ignore the decision. The winning party can and will apply for summary judgment, and the court will enforce the decision. Interest will run on the unpaid amount. In extreme cases, failure to comply can be treated as evidence of inability to pay, opening the door to insolvency proceedings.

This article provides a general overview of the law of construction adjudication in England and Wales. The procedure is governed by the Housing Grants, Construction and Regeneration Act 1996 (as amended), the Scheme for Construction Contracts 1998, and a substantial body of case law. If you are involved in a construction dispute, you should seek legal advice specific to your contract and circumstances.

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