Construction Adjudication: Can a Decision Be Challenged?

Construction disputes over payments, delays or defects need quick resolution. Adjudication delivers this through a statutory process that typically concludes within 28 days.

The adjudicator’s decision is binding and must be complied with immediately. However, there are limited circumstances where it can be challenged.

The Housing Grants, Construction and Regeneration Act 1996 (as amended in 2009) gives parties in most construction contracts the right to refer disputes to adjudication at any time. The process is designed to provide a rapid interim decision to maintain cash flow and keep projects moving.

Common disputes referred to adjudication include:

The adjudicator’s decision is binding until the dispute is finally determined by litigation or arbitration.

An adjudication decision must be complied with immediately, even if a party disagrees with it. This is often described as “pay now, argue later.” The purpose is to prevent disputes from stopping work or causing cash flow problems on projects.

However, the decision is not final. Either party can refer the underlying dispute to court proceedings or arbitration for a full rehearing. At that stage, the entire matter is considered afresh. The court or arbitrator is not bound by the adjudicator’s findings.

In practice, most parties accept the adjudication decision and do not pursue further proceedings. The cost and time involved in litigation or arbitration means that adjudication effectively resolves many disputes.

If a party fails to comply with an adjudication decision, the other party can bring enforcement proceedings in the Technology and Construction Court (TCC). These proceedings are dealt with quickly, often within weeks.

The courts adopt a strongly pro-enforcement approach. Even where the adjudicator has made clear errors of fact or law, the decision will usually be enforced. The policy is to uphold the interim nature of adjudication and preserve its effectiveness as a dispute resolution mechanism.

There are only limited grounds on which enforcement can be resisted:

The adjudicator must have had jurisdiction to decide the dispute. Jurisdiction challenges typically involve:

The adjudicator must give both parties a fair opportunity to present their case. A breach of natural justice may arise if:

Adjudicators must follow the procedural rules set out in the contract or the Scheme for Construction Contracts. Serious breaches may prevent enforcement, though minor procedural irregularities will not.

The threshold for successfully resisting enforcement is high. The courts will not interfere unless there is a serious procedural failing that goes to the heart of the adjudicator’s jurisdiction or the fairness of the process.

Where only part of an adjudicator’s decision is flawed, the court may enforce the valid parts and set aside the defective element. This depends on whether the decision can be properly severed without undermining the adjudicator’s overall reasoning.

Once an adjudicator has issued their decision, they cannot reopen it or reconsider their findings. The only exception is for clerical or typographical errors, which can be corrected within a short period (typically five days or less).

An adjudicator cannot:

If there are substantive errors in the decision, the only remedy is to refer the dispute to court or arbitration for final determination.

A party dissatisfied with an adjudication decision can commence court proceedings or arbitration (if the contract provides for it) to have the dispute determined finally. The entire dispute is reconsidered without any deference to the adjudicator’s findings.

This route involves significant cost and time. Proceedings in the TCC or arbitration can take many months or even years to reach a final hearing. Legal costs often run into six figures for substantial construction disputes.

For this reason, most parties do not pursue final determination after adjudication. The adjudication decision effectively becomes the final resolution of the dispute.

There is no statutory time limit for bringing enforcement proceedings. However, the court may refuse to enforce a decision if there has been unreasonable delay, particularly if circumstances have changed in the meantime or the delay has prejudiced the other party.

Parties seeking to enforce an adjudication decision should act promptly.

A party cannot withhold payment whilst challenging an adjudication decision. Compliance is required immediately, even if enforcement proceedings have been issued to resist the decision.

Failure to comply will usually result in summary judgment being granted in the enforcement proceedings.

Where adjudication is not appropriate or the decision is unsatisfactory, parties may consider:

Each of these options has different costs, timescales and procedural requirements. The most appropriate route depends on the nature of the dispute and the parties’ objectives.

Construction adjudication moves quickly. If you are considering referring a dispute to adjudication, or if adjudication proceedings have been commenced against you, early legal advice is important.

Our commercial litigation team has experience advising on construction disputes and adjudication proceedings. We can help you understand your position, prepare your case, and advise on enforcement or challenge where appropriate.

Contact us on 01604 344562 (Northampton) or 01908 916096 (Milton Keynes), or email [email protected].