Adjudication in construction: a review of the dispute resolution mechanism
16 February 2023
Adjudication continues to be a popular dispute resolution mechanism in the construction industry.
Here, Chris Reid, solicitor at law firm Pinsent Masons looks at findings that could point to a desire for potential changes to the method of settling disputes in construction.
When was adjudication introduced to construction?
In the UK, the statutory right to adjudication was introduced in response to the recommendations of Sir Michael Latham in his July 1994 report, and was introduced under the Housing Grants, Construction and Regeneration Act 1996.
The main objective was the improvement of cashflow in the construction industry.
What are common issues of the adjudication process?
The 2022 survey produced by King’s College London, in close collaboration with The Adjudication Society, brought some issues faced by adjudication users into sharp focus.
The findings of this survey provides an insight as to the changes/improvements we might expect to see in adjudication over the next 25 years.
Lack of diversity in adjudication
Existing data only exists in respect of one protected characteristic in relation to adjudication – representation of women.
Although a lack of gender diversity is an issue seen across the construction industry in several areas, this problem is particularly evident in relation to adjudicators. There are 8 British nominating bodies that publish a list of its adjudicators online.
Only 7.88 percent of the adjudicators on this list are women.
The fact that 4 out of 10 high court judges are women provides some context (judges that can hear cases calling in the TCC).
Possible reasons for this include: the opaque path to becoming an adjudicator, a lack of a positive recruitment drive to encourage diversity and a cap on panel members.
Possible solutions to this issue include the implementation of a range of commitments such as - nominating bodies publishing statistics, regular meetings to discuss diversity issues, workshops to support diversity and a mentoring scheme to support diversity (not limited to gender diversity).
Indeed, a diversity steering group has been established to address some of these issues. This model has experienced a level of success in relation to arbitration.
On 26 January 2023 two new significant initiatives were announced: ‘‘The Equal Representation in Adjudication Pledge’’ and ‘‘Women in Adjudication’’.
The launch event is set to take place on 28 February; its aim is to achieve the goal of dramatically increasing the number of women acting as adjudicators over the next three years.
The evening will discuss the problems and look at potential solutions. Attendees will be invited to sign the Pledge and join Women in Adjudication.
Full details of the event, set to take place at King’s College London, can be accessed here.
Should adjudicators’ decisions be published?
The King’s College Survey found that 58% of respondents did not support the publication of adjudicators’ decisions. However, 38% of respondents were open to a model where decisions are published with redactions.
Decisions of adjudicators are published in other jurisdictions. In Queensland, full unredacted decisions are published. In Singapore, redacted decisions are published.
For this to be implemented, consideration would need to be given to the benefits of transparency of decisions versus confidentially (a popular and appealing existing feature of the Adjudication process in the UK).
This is an area where we may see a change in the future (even if it means decisions being published with redactions). However, there are practical challenges associated with this issue, not least who will fund the publication of decisions?
There would also be issues in relation to who would monitor this process and decide which decisions to publish. The publication of every adjudication decision in the UK would be an onerous task.
The findings associated with the perception of bias are concerning (40% of respondents suspected bias towards one party in a case they were involved with).
Whether the findings accurately reflect the true picture in adjudication proceedings is a source of debate - the findings do not analyse the frequency of suspicion of bias.
Furthermore, the question pitched in the survey was whether the respondents had ‘ever suspected’ bias. Given many of the respondents are experienced adjudication practitioners, it is perhaps unsurprising that they suspected bias at some point throughout the course of their careers.
The most common reason given for suspected bias was the adjudicator’s relationship with the representatives or parties (over 60%).
It is realistic to expect that steps might be taken to try and ease concerns, brought to the fore by the recent survey.
The Equal Representation in Adjudication Pledge
The launch of the ‘‘The Equal Representation in Adjudication Pledge’’ and ‘‘Women in Adjudication’’ is a significant progressive step to ensure adjudication remains the only game in town for construction disputes for the foreseeable future.
The other topics mentioned above could be areas in which we see further significant changes in the future.