Building Contract Disputes

Adjudication is the construction industry’s statutory fast track dispute procedure. A party to a qualifying construction contract can refer a dispute to an independent adjudicator at any time, and the decision is usually delivered within 28 days of referral, extendable by agreement. The decision is binding and must be complied with immediately, even though either party can later have the dispute finally decided in litigation or arbitration. The courts enforce adjudicators’ decisions robustly, so an unpaid decision converts to a judgment quickly.

A claim for the full sum stated in a payment application where the paying party failed to serve a valid payment notice or pay less notice within the statutory deadlines. In that situation the notified sum becomes due regardless of the true value of the work, and adjudicators and courts award it. The paying party’s remedy is a separate valuation dispute afterwards, not a refusal to pay now. The regime makes notice discipline one of the most valuable habits in construction, on both sides of the contract.

A contractor must carry out the work with reasonable skill and care and in accordance with the contract and specification, and defective work is a breach entitling the employer to damages, normally the reasonable cost of rectification. Many contracts contain defects liability provisions giving the contractor the right to return and remedy defects first, and bypassing that machinery can reduce recovery. Expert evidence on the defects and the remedial scheme is usually central, and early investigation, properly recorded, protects the claim.

It depends on who caused the delay. Where the employer or its team caused it, the contractor is typically entitled to an extension of time and, under many contracts, the associated prolongation costs. Where the contractor caused it, the employer’s remedy is commonly liquidated damages at the contractual rate for late completion. Concurrent delay, where both causes operate at once, is dealt with by the contract’s terms and the case law, and the programme, site records and correspondence are the evidence that decides it.

The contract and any amendments, the payment applications and notices with their dates of service, instructions and variation records, the programme and its updates, site diaries and progress photographs, and the correspondence. Construction disputes are won by the party whose records let the story be proved, and lost by the party who has to reconstruct it from memory. If a dispute is brewing, the cheapest step you can take today is to preserve and organise the records.

The dispute is finally decided in arbitration rather than court, privately, before an arbitrator whose award is binding and enforceable. The statutory right to adjudication is unaffected, so the 28 day route remains available first. Arbitration clauses are enforced as written, and issuing court proceedings in breach of one usually results in a stay. Strategy, evidence and the underlying law are unchanged, so the practical difference is forum and privacy rather than substance.

We quote fixed fees for every stage, agreed before any work starts, at prices around 30% cheaper than a standard law firm, from the initial review of the contract, notices and records through to adjudication, mediation or trial. Adjudication in particular is priced for speed, because the 28 day timetable caps the work as well as the wait. We advise on realistic recovery, including the other side’s ability to pay, before you commit to any course of action.