Adjudication and arbitration are two alternative dispute resolution (ADR) methods that are often confused or referred to interchangeably because they sound similar. However, they are very different in their approaches and outcomes, and it is important to understand these differences when considering which method to use in resolving construction disputes outside of court.
In this article, Phil Caton looks at the main differences between adjudication and arbitration.
How long does adjudication / arbitration take?
Adjudication is a rapid process where an adjudicator usually takes between 28 and 42 days to reach a decision. Adjudication is unique to the construction industry and is principally designed to resolve disputes quickly and efficiently. In contrast, arbitration can take a lot longer due to the additional time allowed for statements of case, evidence and disclosure.
How much does adjudication / arbitration cost?
Adjudication is usually less expensive than arbitration, with costs being lower due to the shorter timescales involved and the level of evidence submitted. However, generally, you cannot recover the costs of adjudication from your opponent even if you are successful. In arbitration, costs may be recoverable from the other party, but those costs can be higher due to the more extensive legal procedures and expert witness evidence.
What legal framework does adjudication / arbitration operate within?
Adjudication is typically governed by the Housing Grants, Construction and Regeneration Act 1996 (HGCRA) and the Scheme for Construction Contracts (England and Wales) Regulations 1998, while arbitration is governed by the Arbitration Act 1996.
What evidence do you need?
Adjudication typically requires less formal evidence than arbitration, which can be an advantage in cases where the issues involved are not complex or where it is desirable to put the other side under significant time constraints. The adjudication process was introduced in the UK with the aim of improving cash flow within the construction industry, and as such, it is frequently seen as a "pay now argue later" form of dispute resolution. This means that the amount of evidence produced in adjudication is typically less than in arbitration.
Can you use an expert witness as evidence?
Adjudication has limited time available for the use of expert witness evidence due to its rapid nature, while arbitration allows more time to present evidence, including expert witness evidence.
Is the decision final?
The decision made by the adjudicator is only temporarily binding, which means the parties can still pursue the dispute further if they are not satisfied with the outcome. In contrast, the decision made by the arbitrator is final and legally binding, except in limited circumstances.
In summary, adjudication and arbitration are two distinct forms of Alternative Dispute Resolution that can be helpful in resolving construction disputes outside of court.
Contact our construction law solicitors
If you are contemplating adjudication or arbitration or have received a Notice of Adjudication or Notice of Arbitration, it is crucial to seek expert legal advice. A qualified construction lawyer can provide you with the guidance and support you need to navigate the dispute resolution process and achieve the best possible outcome for your case.
Key Contact
Phil Caton
Construction Law Partner
Phil is a Partner at the firm who specialises in both transactional and contentious construction matters.
