Adjudication

Adjudication

Sean Sullivan Gibbs BSc. LLB(Hon) PG Dip Arb, PG Dip Bar, LLM, FICE, AFICHEME, FRICS, FCIOB, FCInstCES, Founder, UK Adjudicators

A popular choice for resolving construction disputes

The recent studies on adjudication by King’s College and the Adjudication Society show that its use is as popular as ever. The number of adjudication referrals received by the participating ANBs has remained on an upward trend since the introduction of statutory adjudication in 1998. The number of referrals received by participating ANBs reached the highest number on record in the past year (between May 2023 and April 2024) at 2,264, representing a 9% increase on the previous year. The second-highest number was recorded in the May 2020 to April 2021 period at 2,171 referrals.

What is more important to remember is that there are numerous contracts that have named the adjudicator or the parties on the person to act, so the likely number of disputes resolved could be as high as around 3,000 per year.

Seven of the ten participating ANBs – CIArb, CIC, ICE, RIBA, RICS, TECSA and UK Adjudicators – also offer a low-value or fast-track adjudication procedure (or equivalent). A considerable number of referrals received by these ANBs in the past year were adjudicated using this procedure, namely 425 out of the total 2,243, accounting for almost 20% of adjudication referrals received by these ANBs. For CIArb, 51% of received referrals were adjudicated using a low value or fast-track adjudication procedure (or equivalent), while the proportion stood at 35% for ICE, followed by UK Adjudicators at 23%.

By a wide margin, ‘smash-and-grab ’ adjudications were the most common category of claim in the past year, identified by 63% of individual respondents. 

The most common value of an adjudication claim in the past year was between £125,000 and £500,000 – a response selected by 42% of individual respondents. Only 4% selected claim values of less than £25,000, 28% stated that the most frequent value of claims in the past year was between £500,000 and £1m.

The two leading causes of disputes in construction adjudication in the past year are inadequate contract administration at 50% and lack of competence of contract participants at 42%. These are followed by exaggerated claims and changes by the client at 30% each and adversarial industry culture at 25%. By a wide margin, ‘smash-and-grab’ adjudications were the most common category of claim in the past year, identified by 63% of individual respondents. They were followed by ‘true value’ (final account) adjudications at 38%, ‘true value’ (interim payments) at 35% and loss and expense and/or damages for delay and/or disruption at 35%.

48% of questionnaire respondents stated that adjudications in the past year were typically completed within 29 and 42 days from the date of the referral notice. 16% of questionnaire respondents stated that the default 28-day period under the construction act was the typical length of proceedings. 32% stated that the duration of proceedings exceeded 42 days, with such extensions being subject to agreement of both parties. The main factor affecting the length of proceedings was the complexity of the case, identified by 60% of respondents, followed by party behaviour at 24%.

Rates

The most common hourly rates of adjudicators in the past year were between £301 and £350 – a response selected by 39% of individual respondents. This was followed by hourly fees in the £251 to £300 range – a response selected by 25% of individual respondents. The median hourly fees fall within the £301 to £350 range. It is difficult to identify overall typical fees charged by adjudicators. This varies, depending most likely on the nature of the dispute, the length of the proceedings and the hourly fees of the adjudicator. However, most individual respondents at 26% stated that the total adjudicators’ fees charged were between £20,001 and £30,000. The median answer placed the typical total fees at between £12,001 and £14,000.

Decisions

The level of party compliance with adjudication decisions is high. 52% of questionnaire respondents stated that, in the past year, not a single adjudicated dispute was referred to litigation or arbitration. A further 18% stated that less than 5% of cases were subject to such referral.

The median hourly fees fall within the £301 to £350 range. 

Since October 2011, the Technology and Construction Court (TCC) rendered 219 reported judgments relating to the enforcement of adjudicators’ decisions. The TCC declined to enforce the adjudicator’s decision in full in 43 cases (20%) and partially enforced the adjudicator’s decision in a further seven cases (3%), out of 219.

In other words, the TCC fully enforced 77% of adjudication decisions if the case resulted in a reported judgment. In almost 23% of cases enforcement was denied in whole or in part. Jurisdictional objections were successful in defeating 15% of adjudication decisions at the enforcement stage out of the 219 reported judgments, followed by natural justice at 10% and other grounds (such as fraud) at 7%.

Popularity

Given its success and popularity, it is little surprise that the industries excluded due to the power, process and other exemptions as well as territorial application rules would also come to embrace adjudication as an attractive interim, binding process that can be used during the execution of a complex project by including suitable contractual provisions.

The level of party compliance with adjudication decisions is high. 52% of questionnaire respondents stated that, in the past year, not a single adjudicated dispute was referred to litigation or arbitration. 

UK Adjudicators has seen a large rise in offshore construction contracts both in the offshore wind and oil industries that name it in their contracts and as a consequence the numbers of these type of adjudication nominations has rapidly increased. Unfortunately, the pool of adjudicators with offshore and marine experience is extremely low and is an area that needs training to make more sufficient adjudicators available.

UK Adjudicators has the largest multi-disciplinary panel of adjudicators in the United Kingdom as well as a significant panel of international adjudication and dispute board members who range from:

• Lawyers, such as retired TCC judges, solicitors and barristers. 
• Full time arbitrators drawn from the construction, engineering, marine and legal professions. 
• Surveyors such as quantity, building, mineral, marine, civil engineering and general practice surveyors.
• Architects specialising in building, marine and landscaping. 
• Engineers such as civil, mechanical, chemical, electrical and structural.
• Chartered builders and chartered construction managers. 
• Other specialist built environment professions such as BREAM assessors.

UK Adjudicators’ Dispute Board Member Panel for experienced dispute board members includes adjudicators on the FIDIC presidential list, national lists of FIDIC member organisations, IChemE and other bodies such as the ICC and LCIA. The list is growing with members drawn from all continents of the globe.

Diversity

Territorial application rules would also come to embrace adjudication as an attractive interim, binding process that can be used during the execution of a complex project by including suitable contractual provisions. 

UK Adjudicators is working to increase diversity on its panel and as one of the largest complaints made about other adjudicator nominating bodies is they lack diversity is proud to continually strive to: 

• Increase gender diversity.
• Increase ethnic diversity.
• Increase professional representation diversity.
• Increase age diversity.

One of UK Adjudicators’ strengths is that it has many adjudicators with a wide range of native language skills which include English, Arabic, French, German, Dutch, Italian, Romanian, Bulgarian, Mandarin, Cantonese, Afrikaans, Hindi, Russian, Bengali, Swahili, Zulu, Xhosa, Spanish, Portuguese, Turkish, Greek, Javanese, Urdu, Japanese and Gaelic.

UK Adjudicator panel members are diverse and sit on other adjudicator nominating bodies such as:

• Construction Industry Council (CIC). 
• Institute of Mechanical Engineers (IMECHE).
• Royal Institute of British Architects (RIBA). 
• Centre for Effective Dispute Resolution (CEDR). 
• Technology and Construction Solicitors Association (TECSA). 
• Royal Institute of Chartered Surveyors (RICS).
• Chartered Institute of Arbitrators (Scottish Branch) (CIArb Scot).
• Scottish Building. 
• Royal Incorporation of Architects in Scotland (RIAS).
• Royal Institution of Chartered Surveyors in Scotland (RICS Scot).
• Institution of Civil Engineers (ICE). 
• Chartered Institute of Building (CIOB).
• Institution of Chemical Engineers (IChemE). 
• Chartered Institute of Arbitrators Dispute Appointment Service (CIArbDAS ).
• Technology and Construction Bar Association (TECBAR). 
• UK Adjudicators. 
• CLG/ ConstructionAdjudicators.com (CLG).
• Law Society of Scotland. 
• FIDIC President’s List Adjudicators. 
• Minister’s Construction Contracts Adjudication Panel Ireland. 
• Hong Kong International Arbitration Centre (HKIAC). 
• London Court of International Arbitration (LCIA).
• International Chamber of Commerce (ICC).
• London Maritime Arbitrators Association (LMAA).

For UK adjudications, UK Adjudicators offer three schemes:

1. Free adjudication nomination scheme (UKA).
2. Free adjudication nomination scheme with capped fees for the adjudicator (UKA CAPPED SCHEME).
3. CIC LVD MAP (VER 2) UKA does not charge a fee for making a nomination.

Unlike the capped fee schemes of TECSA and the CIC LVD MAP; UK Adjudicators’ capped fee schemes doesn’t have financial limits and can be used to obtain declaratory relief. The values of the amount being claimed and the adjudicator’s total fee caps are set out below for the UKA capped fee scheme.

Claim value and fee cap (exclusive of VAT) 

• Up to £10,000 capped at £1,750. 
• £10,001 to £25,000 capped at £2,188.
• £25,001 to £50,000 capped at £3,063. 
• £50,001 to £75,000 capped at £3,938.
• £75,001 to £100,000 capped at £4,375. 
• £100,000 to £150,000 capped at £6,500. 
• £150,000 to £200,000 capped at £8,000. 
• £200,000 to £250,000 capped at £10,000. 
• Claims that exceed £250,000 will not have a total cap; but the daily fees that can be charged are limited to £2,250.00 plus VAT. 
• Declarations only capped at £5,000.

There is no nomination fee.

In addition, there is a daily fee cap of £2,250.00 plus VAT as well as the total fee cap.

• The claim value excludes VAT and interest.
• The adjudicator’s fee cap excludes VAT but is otherwise all inclusive and therefore includes any expenses.
• The UK Adjudicators’ capped fee scheme can be used for claims for specific sum of money or a declaration only.

UK Adjudicators has also created bespoke services for users of ADR both in the United Kingdom and internationally which includes the nomination of early neutral evaluators, expert determiners, independent assessors as well as arbitrators.

Case law update

The United Kingdom has benefitted from extensive case law on adjudication and the courts support for it with swift enforcement. This makes it extremely attractive to parties with large complex disputes who prefer adjudicating disputes rather using litigation or arbitration. During 2024 and 2025 there have been a number of UK court decisions which will be of interest to users of adjudication in the United Kingdom and internationally and are noted below.

Placefirst Construction Ltd v CAR Construction [2025] EWHC 100 (TCC)

In the case of Placefirst Construction Limited v CAR Construction (North East) Limited, the High Court’s Technology and Construction Court (TCC) in Manchester delivered a ruling on 24 January 2025, resolving a payment dispute between the two construction firms.

Background

The case stemmed from an adjudicator’s decision on 18 October 2024, which determined that CAR Construction was entitled to £867,031.36 plus VAT, as Placefirst had failed to issue a proper payment or payless notice in response to CAR’s interim payment application. Seeking enforcement, CAR initiated part 7 proceedings for summary judgment. Meanwhile, Placefirst issued a part 8 claim, arguing that it had indeed provided the necessary payment and/or payless notices, making enforcement unjust.

Key legal questions

Judge Stephen Davies was required to determine:

1. Whether Placefirst had served a valid payment notice in accordance with the Housing Grants, Construction and Regeneration Act 1996 (as amended) and the subcontract terms.
2. Whether Placefirst’s payless notice was valid despite being served before the due date prescribed by law – a point with no existing legal precedent.

Court decision

After considering extensive arguments, Judge Davies ruled in favour of Placefirst. His findings included:

• Placefirst’s payless notice was valid, as there was no legal restriction against issuing it ahead of the due date. 
• Even if the payless notice had been invalid, Placefirst had also sent a document that functioned as a payment notice.

The court concluded that enforcement of the adjudicator’s decision was inappropriate, reversing the obligation for Placefirst to pay the interim sum requested by CAR.

Implications

This ruling reinforces the importance of payment and payless notices in construction disputes. It clarifies the timing of payless notices under the construction act and provides further guidance on assessing the validity of payment-related communications. Construction firms must ensure clear, compliant documentation to avoid similar disputes.

This case may set a precedent regarding early service of payless notices and deepen legal discourse on payment procedures within the construction industry.

Abbey Healthcare (Mill Hill) Ltd (Respondent) v Augusta 2008 LLP (formerly Simply Construct (UK) LLP) (Appellant) [2024] UKSC 23 On appeal from the Court of Appeal [2022] EWCA Civ 823

On 8 July 2024, the UK Supreme Court ruled in Abbey Healthcare (Mill Hill) Ltd v Augusta 2008 LLP, addressing a key legal question in construction disputes; whether a collateral warranty constitutes a ‘construction contract’ under the Housing Grants, Construction and Regeneration Act 1996.

Background

The case arose from fire safety defects at a care home built by Simply Construct (now Augusta 2008 LLP) under a design and build contract. Abbey Healthcare, the leaseholder, sought to recover costs after engaging a third-party contractor to remediate the defects. It relied on a collateral warranty provided by Simply in 2020.

This decision clarifies the scope of statutory adjudication in construction disputes, limiting claims brought through collateral warranties.

Abbey pursued adjudication to recover over £5.5m, but the High Court ruled that the collateral warranty did not qualify as a ‘construction contract’, invalidating adjudication. The Court of Appeal overturned this decision, classifying the warranty as a construction contract, prompting Simply to appeal to the Supreme Court.

Key legal issues

The case hinged on two key questions:

1. Whether a collateral warranty meets the definition of an agreement ‘for the carrying out of construction operations’ under section 104(1) of the 1996 act.
2. Whether the Abbey collateral warranty created obligations beyond those already established in the building contract.

Supreme Court decision

The Supreme Court unanimously allowed Simply’s appeal, holding that the Abbey collateral warranty was not a construction contract. Key findings included:

• Collateral warranties typically grant third parties rights in relation to defects but do not initiate new construction operations. 
• A warranty that merely replicates obligations under an existing building contract does not create a distinct obligation to perform construction operations. 
• The Abbey collateral warranty mirrored the original contract’s obligations rather than establishing new commitments for Abbey.

Implications

This decision clarifies the scope of statutory adjudication in construction disputes, limiting claims brought through collateral warranties. It overturns the precedent set in Parkwood Leisure Ltd v Laing O’Rourke Wales and West Ltd [2013] and reinforces the principle that adjudication is reserved for agreements actively governing construction works.

For construction stakeholders, this ruling highlights the need for precise drafting in collateral warranties and contractual agreements to determine whether adjudication applies in future disputes.

Lapp Industries Ltd v 1st Formations Ltd [2025] EWHC 943 (TCC) (16 April 2025)

On 16 April 2025, the High Court’s Technology and Construction Court (TCC) ruled on Lapp Industries Ltd v 1st Formations Limited, addressing enforcement of an adjudication decision concerning payment disputes in a refurbishment project.

Background

Lapp Industries Ltd was contracted by 1st Formations Limited to refurbish the reception, business centre, and upper floors of a London property. On 14 April 2023, Lapp submitted an application for interim payment of £120,000 (inclusive of VAT), which Formations failed to dispute through a valid payment notice or pay less notice.

Following this, Lapp initiated adjudication proceedings on 22 November 2024, with the adjudicator ruling in Lapp’s favour on 24 December 2024. The adjudicator determined that Formations was liable for £120,000 plus interest, as well as adjudication fees. However, Formations did not comply with the adjudicator’s decision, prompting Lapp to seek summary enforcement through the High Court.

Key legal issues

Formations resisted enforcement on two grounds:

1. Jurisdiction – arguing that multiple contracts existed rather than a single contract, rendering the adjudication invalid.
2. Natural justice – claiming the adjudicator acted unfairly by failing to consider certain defences and reaching conclusions beyond the scope of submissions.

Court’s decision

Judge Adrian Williamson KC rejected both defences and granted summary judgment in favour of Lapp. The key findings included: 

• Single contract ruling – the court determined that the parties had entered into one overarching construction contract, rather than multiple separate agreements. The judge emphasised that the evolving nature of the works did not alter the contractual structure. 
• Adjudicator’s fairness – the court found no breach of natural justice, ruling that the adjudicator had properly considered Formations’ defences and had validly concluded that the interim payment application was enforceable.

Implications

This judgment reinforces the importance of clear contractual arrangements in construction projects and further solidifies the principle that adjudication decisions should be upheld unless serious procedural violations occur. Additionally, it clarifies legal reasoning on adjudicator discretion and the enforceability of interim payment applications.

Additionally, it clarifies legal reasoning on adjudicator discretion and the enforceability of interim payment applications. 

Construction firms should ensure precise documentation of contractual terms and payment procedures to avoid disputes. This ruling may also influence future cases involving adjudicator jurisdiction and the treatment of evolving scopes of work under a single contract.

Grove Construction (London) Ltd v Bagshot Manor Ltd [2025] EWHC 591 (TCC) (13 March 2025)

On 13 March 2025, the High Court’s Technology and Construction Court (TCC) ruled in Grove Construction (London) Limited v Bagshot Manor Limited, addressing the enforceability of an adjudicator’s decision in a payment dispute following the assignment of a construction contract.

Background

Grove Construction was contracted by Bagshot Manor Developments Ltd (BMDL) to refurbish Bagshot Manor into 79 residential units. The contract, dated 20 April 2020, provided for adjudication in case of disputes. The works reached practical completion on 1 February 2022, with a retention period ending on 11 February 2023, entitling Grove to its final retention payment.

However, BMDL entered administration and on 21 July 2023, assigned its rights in the construction contract to Bagshot Manor Ltd via a deed of assignment. Grove sought its £112,337.16 plus VAT retention payment from Bagshot, leading to adjudication.

Key legal issues

Bagshot disputed liability for payment, arguing that:

1. The adjudicator lacked jurisdiction because the contract was between Grove and BMDL, not Grove and Bagshot.
2. Under assignment law, only rights (not burdens) transfer, meaning Bagshot did not inherit BMDL’s liability to pay Grove.

Grove countered by asserting that Bagshot had effectively ‘stepped into the shoes’ of BMDL, making it responsible for the payment obligation.

Court’s decision

District Judge Baldwin ruled in favour of Bagshot, dismissing Grove’s claim and granting Bagshot’s part 8 request for a declaration that it held no liability.

Key findings included: 

• Adjudicator’s lack of jurisdiction – the adjudication involved Grove and Bagshot, but Bagshot was not a party to the original contract only BMDL had that contractual relationship.
• Legal principles of assignment – under established contract law, an assignment transfers rights but not obligations unless there is a formal novation, which did not occur here. 
• Construction of the assignment deed – the deed assigned contractual rights, but did not transfer the burden of liabilities to Bagshot.

Implications

This ruling reinforces the clear distinction between assignment and novation in construction law. Parties receiving assigned contracts inherit rights but not obligations, limiting their exposure to existing payment claims unless explicitly agreed.

Construction firms must carefully structure assignments and clarify financial obligations in advance to avoid disputes. The decision may influence future adjudications where assigned contracts form the basis of payment claims.

Grain Communications Ltd v Shepherd Groundworks Ltd [2024] EWHC 3067 (TCC) (29 November 2024)

On 29 November 2024, the High Court’s Technology and Construction Court (TCC) in Leeds ruled in Grain Communications Limited v Shepherd Groundworks Limited, addressing whether a postponement of works constituted a breach of contract or a valid variation under the framework agreement.

Background

Grain Communications engaged Shepherd Groundworks under a framework agreement dated 20 January 2022, with a specific work order issued on 7 September 2023 for underground duct laying and associated works at Blyth Phase 3.

On 24 October 2023, Grain informed Shepherd via email that the works would not commence imminently but were likely to take place in 2024. Shepherd argued that this amounted to a breach of contract, entitling them to damages for loss of profit and mobilisation/demobilisation costs. The adjudicator ruled in Shepherd’s favour, prompting Grain to seek a part 8 declaration that the postponement was a variation, not a breach.

Key legal issues

Judge Kelly examined the following questions:

1. Was the postponement a breach or a valid variation?
2. Could Shepherd recover damages for loss of profit and mobilisation costs?
3. Was the adjudicator’s decision enforceable?

Court decision

The court ruled in favour of Grain, finding that: 

• The postponement was a valid variation, as the framework agreement explicitly allowed changes to the timing of works.
• No implied term prevented Grain from postponing commencement, as the contract already provided mechanisms for adjusting timelines. 
• Shepherd was not entitled to damages, as the framework agreement excluded liability for loss of profit and indirect costs.

Judge Kelly overturned the adjudicator’s decision, confirming that Grain had acted within its contractual rights.

Implications

This ruling reinforces the importance of clear contractual terms in construction agreements, particularly regarding variations and postponements. It highlights the limits of adjudication in disputes where contractual interpretation is central.

Construction firms should ensure their contracts explicitly define rights related to work commencement, postponements, and financial entitlements to avoid similar disputes.

Sean Sullivan Gibbs BSc. LLB(Hon) PG Dip Arb, PG Dip Bar, LLM, FICE, AFICHEME, FRICS, FCIOB, FCInstCES, Founder, UK Adjudicators www.ukadjudicators.co.uk
@SGibbs121

UK Adjudicators are an adjudicator nominating body (ANB) for the construction, engineering and shipbuilding industries.

Nominations for an adjudicator or dispute board member are made free of charge.

UK Adjudicator also offer free ADR services for companies, projects and programmes including free mediator, neutral evaluator, expert determinator and arbitrator nominations.

Nomination forms can be downloaded from the website www.ukadjudicators.co.uk