Statutory Adjudication was introduced back in 1998 under the Housing Grants, Construction and Regeneration Act 1996 (“HGCR”).
It means that where the parties are engaged under a construction contract (the HGCR defines what a construction contract is) then there is a statutory right to adjudication. Note that parties cannot contract out of adjudication.
Adjudication has proved popular with the construction industry, particularly with smaller sub-contractors who generally can’t afford the costs of mainstream litigation, and need a speedy resolution for cashflow purposes.
One of the features of adjudication is that a dispute can be dealt with quickly and discretely, without interfering with the progress of the construction programme.
One of the key advantages of Adjudication is speed. In theory, a decision can be reached by an Adjudicator within 28 days of being appointed and each party usually bears their own costs of preparation.
Because of the speed of Adjudication it is generally much cheaper to adjudicate than to issue proceedings in the Technology and Construction Court, or commence Arbitration.