What Is Adjudication Under Scottish Construction Law? 

A payment application is rejected. A contractor leaves the site. A project that had been moving at pace suddenly slows because the parties can’t agree on money, delays, or defective work. Situations like these arise regularly across Scottish construction projects, and waiting months or years for a court judgment rarely suits anyone involved.

This guide explains how adjudication works under Scots law, why it has become the preferred method of resolving many construction disputes, how the adjudication process operates from start to finish, and what happens after an adjudicator reaches a decision.

What is adjudication?

Adjudication is a fast form of dispute resolution created for the construction industry. It allows parties to obtain a binding decision while work often continues on site, avoiding the lengthy delays that can arise through full court proceedings.

The process was introduced by the Construction Act, formally known as the Construction and Regeneration Act 1996. The legislation gives most parties carrying out construction operations a statutory right to adjudication. In Scotland, the Scheme Construction Contracts and the Regulations 1998 support the system, filling the gaps where contractual adjudication provisions do not comply with the legislation.

Adjudication is not intended to resolve disputes once and for all in the way that litigation is. An adjudicator’s decision is binding unless and until the dispute is finally determined by litigation, arbitration, or agreement between the parties.

Which construction contract disputes can be referred?

Almost any dispute arising under a construction contract may be referred to adjudication. Payment disputes remain the most common, although claims involving extensions of time, defective workmanship, professional services, design responsibility, variations, and final accounts are frequently seen.

A party to a construction contract doesn’t have to wait until a project finishes. The legislation provides a right to refer a dispute at almost any stage, provided a formal dispute has crystallised between the parties.

Some complex disputes involve multiple contracts or technical engineering evidence. Even then, adjudication often remains an effective method of dispute resolution because immediate commercial certainty is often more valuable than waiting years for final judgment.

What is the statutory right to adjudication?

One feature that surprises many employers and contractors is that adjudication “at any time” is available under qualifying contracts. The Local Democracy, Economic Development and Construction Act 2009 introduced further reforms, with significant amendments taking effect on 1 November 2011 under the relevant Amendment Regulations.

Where contracts entered after those changes fail to include compliant adjudication provisions, the Scheme may be implied and amended by the Scheme. The statutory framework overrides inconsistent contractual terms in many situations.

Although similar legislation applies in England and Wales, this article focuses exclusively on Scots law and Scottish procedure.

How does the notice of adjudication begin the process?

The adjudication process begins when one party serves a notice of adjudication. Older contracts sometimes refer to a notice of intention or an intention to refer, but the document must clearly identify the dispute, the parties, and the remedy sought.

That document is followed by the referral notice, sometimes described simply as the referral or submission. The referral notice contains the factual background, legal arguments, supporting documents, witness material, expert evidence where appropriate, and the outcome being requested.

Preparation matters. A poorly prepared referral can weaken an otherwise sound claim because the timetable leaves very little opportunity to amend the case later.

How is the appointment of the adjudicator made?

The appointment of the adjudicator usually follows the procedure specified in the contract. Some contracts specify a named others require nomination through an adjudicator nominating body such as RICS.

The selection of an adjudicator should reflect the nature of the dispute. Construction and engineering disputes often benefit from someone who is both legally knowledgeable and technically qualified and experienced.

Once the appointment of an adjudicator has taken place, the adjudicator must act impartially and comply with the rules of natural justice throughout the adjudication proceedings.

What happens after the referral notice is served?

Once the dispute has been referred to adjudication, the responding party will then prepare its defence. In defending an adjudication, it is usual to attack both the factual allegations and the valuation evidence and also to take account of jurisdictional objections where appropriate.

The adjudicator may request further documents, hold meetings, ask written questions or inspect the works. Recovery of project records often becomes central because seemingly minor emails, drawings or payment certificates can alter the outcome significantly.

In practice, apparently weak cases sometimes strengthen once disclosure takes place. Equally, claims that looked convincing at first can lose momentum when contemporaneous records don’t support the allegations.

How does the adjudicator reach a decision?

The legislation expects the adjudicator to decide within 28 days of receiving the referral, although that period may be extended by agreement of the parties. Many people refer to this simply as the 28-day timetable.

The adjudicator’s task is to determine the matters under the contract that have been presented. The adjudicator must assess contractual obligations, technical evidence, witness accounts and financial calculations before issuing the decision within 28 days where possible.

Responsibility for fees and expenses will usually be addressed in the decision. Depending on the circumstances, parties may be jointly and severally liable, or one party may be found severally liable to pay the adjudicator’s fees.

Can the adjudicator’s decision be challenged or enforced?

The decision of the adjudicator is intended to be obeyed immediately, even where one party disagrees with the reasoning. That’s one reason adjudication has become such an effective commercial tool.

Where payment is not made voluntarily, the successful party can seek to enforce the adjudicator’s decision through proceedings in the Scottish courts. In general, the courts will enforce the decision unless there has been a clear jurisdictional error or a breach of natural justice.

Appeals against the merits aren’t generally available simply because one side believes the adjudicator reached the wrong conclusion.

Is adjudication better than arbitration or court proceedings?

Any dispute should be carefully assessed. Arbitration is well suited to technical disputes of high value where parties require greater flexibility in procedure. Court proceedings are still appropriate where there is fraud, multiple parties or wider legal issues.

For many construction projects, though, adjudication offers speed that litigation can’t match. Businesses often need a commercial answer quickly so work can continue, accounts can be settled, and cash flow protected.

Early legal advice also helps identify whether the dispute should be narrowed before referral. That frequently improves the prospects of settlement during the adjudication process.

When should legal advice be obtained?

Delay rarely improves a construction dispute. Documents disappear, memories fade, and opportunities to resolve disputes commercially may be lost.

A solicitor experienced in construction adjudication can assess jurisdiction, review the construction contract, prepare persuasive submissions, identify expert evidence where required, and advise whether negotiation, mediation, adjudication or formal litigation provides the strongest route forward.

Professionals acting for contractors, employers, subcontractors and construction teams also recognise that preparation before the referral often influences the outcome far more than arguments raised after the timetable has started.

Speak to SGT Law Firm

Construction adjudication moves quickly, and the decisions made in the early stages of a dispute can have a significant impact on the outcome. Whether you are dealing with unpaid invoices, defective work, delays, or disagreements over a construction contract, obtaining legal advice at an early stage can help protect your position. The experienced solicitors at SGT Law Firm advise contractors, subcontractors, developers and property owners across Glasgow and Scotland on adjudication, mediation, arbitration and construction litigation. If you are in a dispute, contact SGT Law Firm today to discuss your dispute and get practical advice on the best way to resolve it.