Dispute resolution
Adjudication The Housing, Grants, Construction and Regeneration Act 1996, as amended by the Local Democracy, Economic Development and Construction Act 2009 (the Construction Act) provides that a party to a construction contract has the right at any time to refer a dispute to adjudication. If a construction contract does not contain provisions for adjudication which comply with the requirements of the Act, then the Scheme for Construction Contracts – issued pursuant to the Act – will apply in its entirety to disputes under the contract. Since the introduction of the Construction Act, adjudication has become the most common dispute resolution method for construction disputes. Adjudication is a private 28-day procedure intended to speed up the dispute resolution process and improve cash flow. An adjudicator’s decision is binding on an interim basis (ie until final determination by litigation or arbitration) and monies awarded must be paid. The rights of the parties to appeal an adjudicator’s decision are limited, but the parties may subsequently refer the dispute to litigation or arbitration for a final determination of the dispute. (In practice, this seldom happens.) Arbitration Arbitration is a formal procedure whereby an independent arbitrator or panel of arbitrators, experienced in law or in the trade in question, hear a dispute in private. It requires an agreement between the parties that arbitration be used. Arbitration used to be seen as quicker and cheaper than litigation, and construction contracts often contained arbitration clauses
providing parties with the right to have disputes arbitrated rather than referred to the courts. However, the advent of adjudication and the creation of the specialist Technology and Construction Court (see below) has seen a decline in the popularity of arbitration, and most domestic disputes which are not adjudicated are now referred to litigation (although arbitration remains popular for international disputes). Arbitrations in England and Wales are regulated by the Arbitration Act 1996. The main organisations which appoint construction arbitrators are: – Chartered Institute of Arbitrators (www.ciarb.org) – London Court of International Arbitration (www.lcia-arbitration.com) –– International Chamber of Commerce (www.iccwbo.org/court) Litigation Construction litigation is conducted in the Technology and Construction Court (TCC), which is part of the High Court of England and Wales. The TCC has its own procedural guide which states that claims for less than GBP 250,000 (about USD 390,000) should normally be issued in the county court, and claims exceeding GBP 250,000 in the High Court. In the High Court, the TCC in London has a number of judges who deal only with TCC work. Outside London, High Court TCC claims can be issued in any District Registry, but not all have TCC judges available.
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