Adjudication is a fast, binding dispute process for construction contracts in the UK. Under the Construction Act, a party to a construction contract has the right to refer a dispute to an adjudicator at any time, and the adjudicator must normally decide within 28 days of the referral.
The decision is binding and must be paid, until the dispute is finally decided by a court or arbitration, or by agreement.
Worked example
A specialist Subcontractor applies for £86,000 in a Valuation. The Main Contractor pays £52,000 with no valid notice explaining the shortfall. The subcontractor serves a notice of intention to refer the dispute, then a referral with its evidence.
The adjudicator decides within the time limit that a further £34,000 is due. The main contractor must pay it, even if it believes the decision is wrong and wants to challenge it later in court.
Smash and grab adjudication
A "smash and grab" adjudication is a claim that succeeds because the paying party failed to serve a Payment Notice or a Pay Less Notice on time. If neither was served properly, the sum in the application can become the notified sum, due in full whether or not it reflects the value of the work.
Contractors use this to recover unpaid applications, and it is a risk for any paying party with poor notice discipline.
True value adjudication
The paying party who has paid the notified sum can then start a second adjudication on the true value of the work. This lets it recover any overpayment, so a smash and grab win is often followed by a true value adjudication. Because both claims can run quickly, the cash may move twice within a few months.
What adjudication means for your records
Adjudication is won on documents. The adjudicator will look at the application, any notices with their dates, the Subcontract order, variations and the valuation record. If your payment dates, notices and instructions sit in one system, you can build a response in days rather than weeks.
Missing or unsigned variations are a typical weakness. Each party normally bears its own costs, though the contract may say otherwise, so a weak position can be expensive even if you win.
Related terms
Construction Act, Pay Less Notice, Valuation, Variation, Final Account.
Planyard's subcontractor payment applications record each application, the value assessed and the dates, which is the paper trail an adjudicator will ask for.
