In the construction industry, adjudication is the standard dispute resolution procedure. It is an alternate type of conflict settlement. Whether or not it is officially included in the contract, it is a possibility for resolving disputes in all construction contracts.
We discuss the advantages and risks of this procedure in this post.
Advantage of Adjudication
Compared to court cases or other types of dispute resolution, adjudication has a number of benefits.
- Adjudications are a quick approach to settling disputes because they have a 28-day time frame. However, it should be remembered that this time might be extended if all parties agree to do so.
- Because of the short duration, adjudication is frequently less expensive for parties than litigation. But keep in mind that regardless of the outcome, the fees associated with consulting attorneys or other specialists cannot be reimbursed.
- Adjudication can settle a disagreement while the contract is still in effect, as opposed to waiting until the project is complete and starting a lawsuit.
- An adjudication judgement is private, in contrast to litigation, unless it is ultimately the focus of disciplinary actions brought before a court.
- The person who makes the decision typically is an engineer or quantity surveyor with experience in building disputes.
Disadvantage of Adjudication
Despite the benefits of adjudication, there are certain disadvantages to consider.
- Adjudication costs are typically not refundable as expenses. This means that, unlike in a lawsuit or arbitration, the responding party cannot collect its related professional fees from the referral party, most importantly its legal expenses.
- A conflict can be referred to “at any time,” which can cause it to appear out of nowhere and make the other party feel “manipulated,” particularly if it is high value and complex. In court cases, this is often avoided.
- Although the adjudication process’s quick turnaround times offer numerous benefits, it can also mean that parties have very little time to research the claim and formulate their defence. This could result in a rushed choice that neither party likes.
- Despite the fact that courts typically uphold adjudicator rulings, the replying party has a lot of room to cause trouble by claiming that the decision is invalid, forcing the filing of expensive enforcement proceedings with the courts.
Contact us if you’re thinking about Adjudication
In general, adjudication offers parties that require a quick settlement of their issue a convenient and inexpensive alternative to litigation. For many years, adjudication has been used successfully in the construction sector as a type of ADR since it allows parties to carry on with the project while a decision is made.
Please get in touch if you’re thinking about initiating an adjudication so that we may determine whether your claim is one that one of our panel firms might be able to attain on a no-win no fee basis.