What is Adjudication?

Disputes will always happen. We need to resolve them quickly

There are two types of Adjudication –  Statuary and Contractual.

What is Adjudication? The purpose of adjudication is to resolve construction disputes quickly and in an effective manner via the involvement of a neutral third party while maintaining the option of litigation or arbitration. The intent is to also reduce the obstacles and expenses arising from legal procedures and arbitration on sub-contractors and other lower-tier parties involved in the construction project.

Adjudication is a form of Alternative Dispute Resolution, ADR. More about it in What are the Main Types of Alternative Dispute Resolution – ADR and Alternative dispute resolution (ADR) and it’s advantages and disadvantages.

Statuary Adjudication

Statuary Adjudication was adopted by the United Kingdom as a consequence of the Housing Grants, Construction and Regeneration Act in 1996 in light of the recommendation of the notable report Constructing the Team, famously known as the Latham Report. More about the Latham report here.

Sir Michael Latham was commissioned by the UK government to review and recommend proposals for the existing procurement and construction issues affecting the UK construction sector. Adjudication is the end result of the report’s recommendations on the necessity of a fast and inexpensive method of resolving construction disputes.

The Housing Act allows each party in the construction contract to opt for an independent third party with the aim of obtaining a rather fast decision for a dispute that might arise throughout the work’s progress. Simultaneously, it ensures that the losing party has the chance to get the dispute reheard by the court of jurisdiction or an arbitral tribunal.

Contractual adjudication

Contractual adjudication is adjudication where the contract is outside of the scope of the Act, but the parties have agreed to insert an adjudication procedure into the contract for resolving disputes. The purpose of this is to have a pre-agreed mechanism to resolve a dispute or at the worst prevent the dispute from escalating further.

The new form of dispute resolution or de-escalation is the DAB. The Fédération Internationale des Ingénieurs-Conseils (Fidic) – The international association of consulting engineers based in Geneva has combined the idea of DRBs and adjudication in its Conditions of Contract.

Dispute Adjudication Board “DAB” provisions were added to the 1999 edition of the Fidic Red Book. This was of paramount importance as earlier versions of the FIDIC Conditions of Contract provided that the Engineer had to render decisions on a preliminary basis in disputes between the employer and the contractor.

While engineers were supposed to be neutral, Contractors tend to regard them as biased as they only had contracts with the Employer. Therefore, FIDIC established DABs in its 1999 Conditions of Contract as an ADR mechanism preceding the arbitration proceeding under the contract.

Currently, the standard forms of construction contracts prepared by the International Federation of Consulting Engineers that include Dispute resolution clauses are widely used and are required as a necessary part of the construction project commercial and financial arrangements of many agencies such as the World Bank.

The latest version of the Fidic Red Book form of contract outlines the procedure for Adjudication under Sub-clause 21 – Disputes and Arbitration.

Hijacking of the Adjudication Process

The original purpose of adjudication is to provide interim relief and protection of cash flow by avoiding the exhaustive durations of dispute resolution methods such as arbitration. However, as time passed the process was “hijacked” as explained by Judge H.H Toulmin (Coulson, 2011) wherein adjudicators’ decisions are not being honored by the parties and more confrontations are escalated to court. This abuse of the process opposes the original intent of adjudication. 


Avid reader and practitioner of alternative dispute resolution methods.

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