adjudication

Cashflow delay is the single largest cause of insolvency for construction companies. The market is highly competitive, and profit margins are fine. Delays in payment can frequently be the difference between continuing to operate and falling off a cliff.

The pain does not go away as you go up the contractual chain, as while you are closer to the money you are also at risk that some of your subcontractor packages cause issues whereby you end up between a contra charge from a main contractor and a demand for payment from a subcontractor who is not prepared to wait for you to take the time to investigate.

The adjudication process takes 28 days and produces binding decisions which can be used to enforce cashflow through the contractual chain. It is a powerful tool for a construction contractor and the most frequent one used to resolve disputes on construction sites, and force cash through the system.

The adjudication process goes through a series of steps:

1. Referral Notice
2. Appointment of Adjudicator
3. Service of Referral
4. Response
5. Reply (optional and at Adjudicator’s discretion)
6. Rejoinder (optional and at the Adjudicator’s discretion)
7. Decision
8. Enforcement

Steps 1 – 7 take 28 days. Step 8 turns a Decision into a Court Judgement and takes 32 days.

Every year only a handful of Enforcement Applications are made to the Technology and Construction Court meaning that most of the time the losing party pays the Decision and pays promptly, as it is usual for payment to become due immediately on the Decision being made.