Episode 7: Adjudication as a tactical tool – When and how to use it

In our final episode, our hosts unpack the mechanics of adjudication and how it can be used as a practical tool. We discuss when it makes sense to adjudicate? What are the risks of going too early? And how do you use adjudication to support your broader project objectives?

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Episode Transcript:

[Music]

David Owens:

Hello and welcome to the last episode in this series of Inside Adjudication. My name is David Owens, I’m a Partner in the Construction Team at Sharpe Pritchard and I will be your host for this episode, and I’m joined by my colleagues Peter and Aanya.

If you work in construction, you’ll know that disputes can be disruptive, expensive, and time-consuming. In this series, we aim to help you understand adjudication – a fast and practical way to resolve disputes in construction.

If you’ve been listening to the series this far, then you’ll know our format for these podcasts. So, Peter, what are you and Aanya going to be talking about in this episode?

Peter Jansen:

Well today, David, we are taking a step back from the mechanics of adjudication to look at how and when to use it strategically.

Adjudication is often associated with payment disputes or contract breakdowns. But it does not always have to be used as a reaction to a worsening situation. In fact, many of our clients are using it proactively as a tactical tool and not simply waiting until the project is over or litigation is on the horizon.

So, when does it make sense to adjudicate? What are the risks of going too early? And how do you use adjudication to support your broader project objectives? Aanya what do you think?

Aanya Gujral:

Well Peter, I think the first point to make is that adjudication was designed as a fast and efficient mechanism for resolving disputes during a project, not just at the end. One very practical use of adjudication is unlocking cash flow. If a contractor or consultant has submitted an application that has been undervalued or disputed, adjudication can be a fast route to resolving that issue and getting paid, without derailing the whole project.

We often see adjudication used mid-project to deal with interim payment issues. Especially in public sector frameworks, where payment cycles are tight and multiple packages are running in parallel, one unresolved payment issue can have a ripple effect. Adjudication gives you a tool to deal with that quickly, without waiting months for a final account negotiation.

Peter:

Another scenario is scope creep. You start with one set of works, the client introduces changes, and suddenly you are doing a lot more than the original contract envisaged. Adjudication can be used tactically to address valuation of variations or entitlement to an extension of time before the project ends.

Aanya:

And there is a strategic angle too. Adjudication can be used to test the strength of a claim. Say for example, you are considering litigation or arbitration but want to see how strong your position is. By running a focused adjudication on a discrete issue, like liability for delay or responsibility for a defect, this might help to shape your strategy. It is quicker and less expensive than court proceedings and it gives you a decision that is binding, at least in in the interim.

Peter:

It can also apply pressure. Sometimes, adjudication is used as leverage in commercial negotiations. If one party is not engaging or dragging their feet, serving a Notice of Adjudication can bring them back to the table. That said, it should never be used carelessly. Starting an adjudication without a crystallised dispute or without properly preparing your case can backfire.

And what about the risks? Is there such a thing as adjudicating too soon?

Aanya:

Well yes there is. If the dispute has not crystallised, or if the other side has not yet had a chance to respond, you might well face a jurisdictional challenge by the other side. Also, if your evidence is not ready or your position is not fully developed, the adjudicator may not be persuaded by your case. Once the adjudication process starts, the timetable is tight and that is why preparation is key.

Peter:

And from a relationship point of view, adjudication is an adversarial process. If the project is ongoing and you still have to work with the other party, adjudicating too aggressively or too often can strain the relationship. It is a powerful tool, but like all tools, it needs to be used appropriately.

David:

Thanks both. So, to summarise adjudication is not just for emergencies or final account disputes. It can also be used mid-project to unlock payment, clarify scope, or to resolve disputed legal positions. But timing, preparation, and commercial judgment are essential to gain the maximum benefit from adjudicating if you’re the referring party, or to successfully defend an adjudication if you’re on the receiving end.

Thanks everybody. That brings us to the end of this episode and the conclusion of the first series of Inside Adjudication by Sharpe Pritchard. We hope this podcast series has helped you in your understanding of what adjudication is, why it exists, and how it works and we are excited to continue the conversation on adjudication in the next series coming soon.

In the meantime, you can stay connected with us by following Sharpe Pritchard on LinkedIn, reaching out to the team via email, and signing up to our mailing list through our website for the latest updates and insights.

Thanks very much for listening and see you in the next series!