Construction Adjudication: A Complete UK Guide

Construction adjudication is a fast, statutory dispute-resolution process that lets any party to a UK construction contract refer a dispute to an independent adjudicator who must usually decide it within 28 days. The decision binds the parties on an interim basis — it must be honoured immediately (“pay now, argue later”) — until a court, arbitration or settlement finally resolves the matter.

Created by the Housing Grants, Construction and Regeneration Act 1996 (the “Construction Act”), adjudication transformed how the industry handles money and performance disputes. Instead of waiting years for litigation, a contractor or employer can obtain a binding answer in roughly a month, keeping cash flowing down the supply chain while the project continues.

This guide explains the statutory right to adjudicate, what counts as a construction contract, the step-by-step 28-day timetable, the difference between “smash and grab” and “true value” adjudications, how decisions are enforced in the Technology and Construction Court (TCC), and how insolvency affects the process — with a worked example in pounds and ten FAQs.

What adjudication is and why it exists

Adjudication is a 28-day dispute process designed to keep money moving on construction projects. Before 1998, a subcontractor owed money could either swallow the loss or fund years of litigation or arbitration — often going insolvent before judgment. Sir Michael Latham’s 1994 report Constructing the Team recommended a quick, cheap, interim-binding mechanism, and Parliament delivered it through the Construction Act.

The core idea is “pay now, argue later”. An adjudicator gives a rapid decision that the parties must obey immediately, even if one side thinks it is wrong. That decision is only temporarily binding: either party can later have the same dispute decided finally by the courts or an arbitrator. In practice, the overwhelming majority of adjudication decisions are never re-litigated — the speed and cost discipline produce a result the parties can live with.

Adjudication is now woven into every major standard form, including JCT contracts and NEC contracts, and is the default route for disputes over payment, valuation, delay, defects and final accounts.

The statutory right and the Scheme for Construction Contracts

The legal foundation is section 108 of the Housing Grants, Construction and Regeneration Act 1996, as amended by Part 8 of the Local Democracy, Economic Development and Construction Act 2009 (LDEDCA), which took effect on 1 October 2011 in England and Wales. Section 108 gives a party to a construction contract the right to refer a dispute “arising under the contract” to adjudication at any time. This right is mandatory: a contract cannot take it away, and any clause that tries to is overridden.

Section 108 sets out minimum procedural requirements the contract must meet — for example, allowing a party to give notice “at any time”, appointing an adjudicator and serving the referral within 7 days, and requiring a decision within 28 days. If the contract’s own adjudication clause fails to comply with these requirements, the Scheme for Construction Contracts (a statutory set of default rules) is implied to fill the gaps. Where a contract has no adjudication clause at all, the Scheme applies in full.

You can read the primary law directly at section 108 on legislation.gov.uk. For the wider payment framework, see our complete guide to the Construction Act 1996.

What counts as a “construction contract”

The statutory right only applies to a construction contract for construction operations carried out in England, Wales or Scotland. Under section 104, a construction contract is an agreement for carrying out construction operations, arranging for others to do so, or providing labour for them. Crucially, since the 2009 amendments the contract no longer has to be in writing — oral and partly-oral construction contracts now carry the right to adjudicate, though the adjudication agreement itself must be in writing.

Section 105(1) defines construction operations broadly: construction, alteration, repair, maintenance, demolition and dismantling of buildings and structures; civil engineering works such as roads, docks, railways and pipelines; installation of heating, lighting, power, drainage and ventilation; site clearance, scaffolding, painting and decorating. Professional services (architecture, surveying, engineering advice) supplied under a separate appointment also count.

Exclusions: residential occupiers and process plant

Two main groups fall outside the statutory right.

Residential occupiers (section 106)

A contract with a residential occupier is excluded. This covers a contract that principally relates to operations on a dwelling which one of the parties occupies, or intends to occupy, as their residence — typically a homeowner having an extension or refurbishment done to their own home. The homeowner does not get the automatic statutory right to adjudicate (although many builders’ contracts grant an equivalent contractual right anyway, and courts read the exception narrowly).

Excluded operations (section 105(2))

Section 105(2) carves out certain heavy-industry operations after lobbying when the Act was drafted:

• Drilling for, or extraction of, oil or natural gas.
• Extraction of minerals; tunnelling, boring or constructing underground works for that purpose.
• Assembly, installation or demolition of plant or machinery (and supporting steelwork) on sites where the primary activity is nuclear processing, power generation, water or effluent treatment, or the production, transmission, processing or bulk storage of chemicals, pharmaceuticals, oil, gas, steel, or food and drink.

The courts interpret these exclusions narrowly, and the “primary activity” test is fact-sensitive — a dispute can turn on whether a particular site is genuinely a chemical or power-generation site. See section 105 on legislation.gov.uk for the full list. If your contract is excluded, adjudication may still be available if both parties agree to it contractually.

The 28-day timetable

Speed is the defining feature. The clock that matters runs from the referral, not the initial notice.

So the adjudicator must produce a reasoned decision within 28 days of the referral. The referring party alone can grant a single extension of up to 14 days, taking the period to 42 days. Any longer extension needs the agreement of both parties. Missing the deadline can render a decision unenforceable, so adjudicators guard the timetable carefully.

Step-by-step adjudication process

1. Notice of adjudication. The referring party serves a short notice identifying the dispute, the contract, the redress sought and the parties. This crystallises the dispute and fixes the adjudicator’s jurisdiction — the adjudicator cannot stray beyond what the notice describes.
2. Appointment / ANB request. Within 7 days the parties either use an adjudicator named in the contract or apply to an adjudicator nominating body (ANB) such as RICS, RIBA, the CIArb, TeCSA or the ICE, which nominates a suitable adjudicator.
3. Referral. Within 7 days of the notice, the referring party serves the referral notice — the full case, with contract documents, witness statements and any expert evidence. The 28-day clock starts here.
4. Response. The responding party serves its defence, usually within 7–14 days as directed by the adjudicator.
5. Reply (and rejoinder). The adjudicator may allow a reply, and sometimes a rejoinder, plus questions, a site visit or a short meeting.
6. Decision. The adjudicator issues a reasoned written decision within 28 (or 42) days, deciding the dispute and, where relevant, who pays the adjudicator’s fees.

Because adjudication support is a non-reserved activity, Hayhills can prepare and present your notice, referral, response and supporting evidence directly, without you needing to instruct a solicitor at this stage.

Adjudicator powers and jurisdiction

The adjudicator’s powers come from the contract and, by default, the Scheme. They can take the initiative in ascertaining the facts and the law, request documents, meet the parties, appoint their own expert, and decide the dispute referred — including ordering payment of a sum, opening up certificates, deciding valuation, extensions of time and defects. They can award interest if the contract or Scheme allows.

The limit is jurisdiction. An adjudicator can only decide the single dispute referred in the notice (the Scheme limits a referral to one dispute unless the parties agree otherwise). Common jurisdictional challenges include: there was no concluded contract; no “construction contract” within the Act; the dispute had not “crystallised” when the notice was served; more than one dispute was referred; or the adjudicator was not validly appointed. A party who wants to challenge jurisdiction should reserve its position clearly and early, otherwise it may be treated as having agreed to the adjudicator deciding the point.

“Smash and grab” vs “true value” adjudications

Most adjudications are about money, and they hinge on the Construction Act’s payment-notice regime. Under sections 110A–111, the paying party must pay the “notified sum” unless it serves a valid payment notice or pay less notice in time. Miss those notices, and the sum applied for becomes payable in full.

Smash and grab

A “smash and grab” adjudication exploits exactly that. If the employer fails to serve a valid payment or pay less notice, the contractor can adjudicate for the full sum claimed — without arguing whether the work was actually worth that much. The adjudicator simply enforces the notified sum because the employer has no notice-based defence.

True value

For years it was unclear whether an employer could then fight back. S&T (UK) Ltd v Grove Developments Ltd [2018] EWCA Civ 2448 settled it: an employer who has lost (or faces) a smash-and-grab can launch a “true value” adjudication to determine what the work was genuinely worth — but only after first paying the notified sum. This preserves the “pay now, argue later” cash-flow principle while preventing windfalls. The practical effect is that smash-and-grab wins are often only temporary: the overpaid amount can be clawed back in a later true-value adjudication. See our guide to final account disputes and retention disputes for related valuation issues.

Enforcement, natural justice and severance

An adjudicator cannot enforce their own decision — if the loser does not pay, the winner applies to the Technology and Construction Court for summary judgment. The TCC operates a fast enforcement procedure and generally enforces decisions robustly.

The enforcement cases

• Macob Civil Engineering v Morrison Construction [1999] — Dyson J held that an adjudicator’s decision is immediately enforceable by summary judgment; Parliament intended a speedy interim mechanism that courts should support.
• Bouygues UK v Dahl-Jensen UK [2000] — even where the adjudicator made an obvious error within their jurisdiction, the decision was still enforced. The remedy for a wrong-but-jurisdictionally-valid decision is final litigation, not refusing enforcement.
• Carillion Construction v Devonport Royal Dockyard [2005] EWCA Civ 1358 — the Court of Appeal set a high bar for resisting enforcement. Decisions are enforced unless the adjudicator acted without jurisdiction or in serious breach of natural justice; courts should not allow enforcement to become a forensic re-run of the dispute.

Natural justice and severance

The two main grounds to resist enforcement are excess of jurisdiction and a material breach of natural justice — for example the adjudicator deciding on a basis neither party argued, failing to consider a key defence, or apparent bias. Where only part of a decision is tainted, the court may sever the bad part and enforce the rest, provided the valid part can stand independently. Because enforcement litigation in the TCC is a reserved legal activity, Hayhills advises on strategy and introduces a regulated solicitor to conduct the court proceedings.

Costs, Tolent clauses and insolvency

Who pays the costs

The general rule is that each party bears its own legal and management costs of an adjudication, win or lose. The adjudicator can, however, decide which party pays the adjudicator’s own fees and expenses. There is no automatic “loser pays the winner’s costs” rule as in litigation.

Tolent clauses and section 108A

A “Tolent clause” was a contract term making the referring party pay all the costs of an adjudication regardless of outcome — a tactic to deter weaker parties from adjudicating. Section 108A, inserted by LDEDCA 2009, made such cost-allocation clauses ineffective unless they are either (a) an agreement conferring power on the adjudicator to allocate their fees, or (b) made in writing after the notice of adjudication is given. This largely killed Tolent clauses and rebalanced access to adjudication.

Insolvency and adjudication

For years it was assumed an insolvent company could not adjudicate, because insolvency set-off replaces individual claims with a single net balance. Bresco Electrical Services Ltd (in liquidation) v Michael J Lonsdale (Electrical) Ltd [2020] UKSC 25 changed that: the Supreme Court held that a company in liquidation retains the right to adjudicate, and the courts will only restrain it in “exceptional” circumstances. Enforcement of an insolvent claimant’s decision is still harder — the court may stay enforcement or require security, because the losing party must be protected if the cross-claim later succeeds.

Adjudication compared with litigation, arbitration and mediation

Adjudication is one of several ways to resolve a construction dispute, and choosing the right route matters. The table below sets out how it compares with the main alternatives.

For many cash-flow disputes, adjudication is the obvious first step: it is fast, comparatively cheap and gives an enforceable answer. Litigation in the TCC remains the route for final determination and for enforcing an adjudicator’s decision, while mediation can run alongside any of them to negotiate a settlement. Hayhills can advise on the most cost-effective mix for your dispute, including stand-alone defective works claims and extension of time claims.

Benefits, drawbacks and common mistakes

Common mistakes to avoid

• Referring more than one dispute in a single notice without agreement — this can defeat the adjudicator’s jurisdiction.
• Adjudicating before the dispute has “crystallised” — you must have made a claim that has been rejected or ignored.
• Drafting a vague notice of adjudication — it defines and limits what the adjudicator can decide.
• Forgetting the Grove rule — an employer must pay the notified sum before pursuing a true-value adjudication.
• Missing payment or pay less notices — the single biggest cause of smash-and-grab losses; see our payment disputes guide.
• Not reserving a jurisdiction objection early — participating without objection can waive the point.

Related questions about adjudication

Can you adjudicate a dispute after the project is finished?

Yes. The right to refer a dispute exists “at any time”, so adjudication is commonly used after practical completion — for example over the release of retention, the final account, or latent defects discovered later. The only practical limits are the contractual limitation period for the underlying claim and the need for a crystallised dispute.

What happens if the losing party simply refuses to pay?

The decision does not enforce itself. The successful party issues TCC enforcement proceedings seeking summary judgment, which the court hears on an expedited basis — often within weeks. Once judgment is entered, the usual enforcement tools (charging orders, writs of control, winding-up where appropriate) become available. Resisting enforcement succeeds only on narrow jurisdiction or natural-justice grounds.

Can the same dispute be adjudicated twice?

No. An adjudicator cannot decide a dispute that is the same, or substantially the same, as one already decided in an earlier adjudication. A second adjudicator faced with such a referral lacks jurisdiction. However, a genuinely different dispute — such as a later interim application or a true-value claim following a smash-and-grab — can be referred separately.

Does adjudication apply to professional consultants?

Yes, where the consultant’s appointment is a construction contract for construction operations — which usually includes architectural, design, surveying and engineering advice given under a separate appointment. Many professional appointments (and standard forms such as collateral warranties) therefore carry the statutory right to adjudicate.

What we see in practice

In our construction practice, the parties who get the most from adjudication are the ones who prepare the referral before serving the notice of intention, not after. Because the adjudicator must decide within 28 days of the referral under section 108 of the Housing Grants, Construction and Regeneration Act 1996, the compressed timetable rewards a referring party whose valuations, records and witness evidence are ready on day one. We regularly see otherwise strong claims weakened simply because the referral was assembled in a rush to meet the seven-day window for getting the dispute to the adjudicator.

Two misunderstandings recur. The first is that a “smash and grab” win is permanent: since S&T (UK) v Grove [2018] EWCA Civ 2448 the paying party can recover an overpayment through a later “true value” adjudication, so the cash-flow gain is often temporary. The second is that an insolvent counterparty closes off adjudication; following Bresco v Lonsdale [2020] UKSC 25 it does not, although enforcing any award is a separate and harder question. The advice we give clients is consistent: treat the adjudicator’s decision as binding interim cash-flow relief, not a final ruling on who is ultimately right.

Frequently asked questions

This article is for general information only and does not constitute legal or accountancy advice. Hayhills Limited, trading as Hayhills Legal Advisory, provides non-reserved legal advisory services. Always check current requirements at GOV.UK.