The Notice – What is it and why do we have it?

In this episode, our hosts unpack the Notice of Adjudication, why you need it, and what you should watch out for when preparing one. Our featured case study provides a great example of how the way that a dispute is framed in the Notice can determine the adjudicator’s jurisdiction, and how far a court is willing to support the adjudicator’s interpretation.

Also available on:

Apple Podcast Amazon Music Spotify

Episode Transcript:

[Music]

David Owens:

Hello and welcome to episode two of Inside Adjudication. I’m David Owens, a Partner in the Construction Team here at Sharpe Pritchard – a leading UK law firm with expertise in public sector construction disputes – and I will be your host this morning.

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

I’m joined by my colleagues Aanya Gujral and Peter Jansen, and they’ll share their insights and give you a clear understanding of what adjudication is, why it exists, and how it works.

In each episode we aim to delve deeper into the finer details of the process, and we’ll look at some recent adjudication cases, with the aim of providing some practical tips to help.

In this episode, were talking about the adjudication process. So, over to you Aanya and Peter.

Aanya Gujral:

Thanks David. Hi everyone.

In our first episode, we introduced what adjudication is, discussed what it means for a dispute to have arisen, and when a party is able to commence the process. And today, as David said, we are moving on to talk about the formal trigger for adjudication: serving the notice of a party’s intention to refer a dispute.

And this step marks the official beginning of the adjudication, and it sets a very tight statutory timetable in motion. Despite its importance, we often see Notices that fall short in form or content and which cause difficulties later.

So, what exactly is the Notice of adjudication, why do you need it, and what should you watch out for when preparing one. We’re going to go through that today in this episode.

Peter, can you kick us off and explain what the Notice actually is?

Peter Jansen:

The Notice of adjudication is the first formal step in the process, and a legal requirement under section 108 of the Construction Act. It defines the dispute and establishes the jurisdiction of the adjudicator. Crucially, it triggers the adjudication appointment process, but it must come first. A party cannot appoint an adjudicator before issuing the notice.

Once served, the Notice starts the clock ticking and you then have seven calendar days to serve your referral if you are the referring party. That’s why in practice, the referral is usually drafted first, so that the Notice can be aligned with it.

Aanya:

And before serving that Notice, you need to ensure a few fundamentals are in place. Firstly, you need to check, as we mentioned in our last episode, if the dispute has crystallised. So as a recap, that means both parties are aware of the disagreement, and there has been opportunity available to resolve it. If you adjudicate prematurely, the decision may be challenged on jurisdictional grounds, so for example, if the dispute has not in fact crystallised.

Next you need to consider, is this a single dispute? The law requires the Notice to refer a single, crystallised dispute. If you include multiple issues that are not clearly linked or part of the same overall dispute, you may trigger a jurisdictional challenge.

Also, framing the dispute correctly is essential. It’s not just about what happened, it’s about how you present the matter in the dispute.

So, Peter, in your experience and procedurally, what should be included in the Notice of adjudication?

Peter:

Well firstly, name the parties. Clearly describe the dispute, so we know what it’s all about, and set out what you want the adjudicator to decide – whether it’s non-payment and extension of time, or the interpretation of a contractual clause.

You’ll also need to refer to the correct contract, this means identifying which set of terns applies. Is it a JCT, an NEC, or some other bespoke agreement for some other standard form? It could include the key clauses that you were relying upon, especially those related to service, adjudication provisions, and any agreed nominating bodies.

And any other procedural steps the contract requires prior to the commencement of adjudication should also be stated in the Notice, as it serves to show that you have a valid ability to claim.

Aanya:

That’s all really helpful Peter, and also another point is if you do not clearly define what the adjudicator is being asked to decide in the Notice, or you don’t include the relief that you are seeking or the declaration, you may face a jurisdictional challenge as well. So, it is really important to be specific in the Notice as to if you are seeking from the adjudicator a declaration that you are owed a sum of money for example, or a declaration on the meaning of a clause, or confirmation that a notice was valid to list a few of the common examples.

Also, we need to consider some of the practicalities. So, if the contract requires notices to be served at a registered office for example, do not just rely on just notifying the other party just by email. Ensure that you are complying with the terms of your contract at all times. Do not fall at the first hurdle by making a mistake as simple as failing to serve your Notice properly.

Peter:

That is a very good point, Aanya, and I would add that it is equally important that you don’t forget the key details when preparing the Notice. Common mistakes I have seen all too often include failing to refer to the contract or omitting key facts in general. If you do get the Notice wrong, you may need to withdraw and start again, but by that time, the damage may already be done.

It is also worth noting that adjudicators are entitled to their fees and expenses, regardless of whether the adjudication proceeds or collapses due to a defective Notice. That’s another reason for getting it right first time.

Aanya:

Yes, that’s all very true. Another point is once the Notice has been served, the referring party must move quickly to appoint the adjudicator. If the contract names a specific adjudicator or a particular nominating body, you must follow that process. However, if it does not, then you will need to apply to a recognised Adjudicator Nominating Body such as RICS, CIArb, TeCSA or RIBA to have someone nominated. They’ll help you to nominate an adjudicator.

The application usually involves completing a short form, available online, and submitting a copy of the Notice of Adjudication along with a brief description of the dispute. It is important to check the contract for any procedural requirements, such as who to apply to or what documents are needed.

Crucially, this application must only be made after the Notice has been served, not before as Peter has already mentioned. If you get the order wrong or apply to the wrong nominating body, the adjudication may be deemed to be invalid which could waste time and cost. So again, check the contract, follow the correct order and act promptly, is our key advice.

Peter:

To summarise, the Notice may be a short document, but it carries a lot of weight and the contents and presentation of it are crucially important to the parties’ respective cases. It defines the dispute, frames the redress being sought, starts the clock, and determines the adjudicator’s powers. It’s not just a formality; it’s the cornerstone of a successful adjudication.

So, treat it with care. Make sure the dispute is crystallised and framed correctly. Stick to one dispute, check service requirements, and clearly describe what the adjudicator is being asked to decide.

David:

Thanks both, lots of good advice there. This week, we’re talking about a case that goes right to the heart of today’s topic the Notice of Adjudication and how disputes are defined. The case in question is Lapp Industries v 1st Formations Ltd, and it is a great example of how the way a dispute is framed in the Notice can determine whether the adjudicator even has jurisdiction to decide it. It also shows how the courts deal with arguments around multiple contracts and how far they’re willing to support the adjudicator’s interpretation.

Peter, can you talk us through the key facts?

Peter:

Thanks, David. This case was heard in the Technology and Construction Court earlier this year. The defendant tried to resist enforcement of an adjudicator’s decision by arguing there were multiple contracts in place, which would have invalidated jurisdiction. But the adjudicator had decided there was a single contract, covering 14 separate quotes, and the court upheld that view. The judge described the suggestion of multiple separate contracts as “contrived and unrealistic.”

It’s a good reminder that what might look like separate transactions can still form part of a single contractual framework, and if the adjudicator has to decide that issue to resolve the dispute, the court will usually support that approach.

Aanya:

Exactly, and it also highlights why the Notice of Adjudication needs to frame the dispute carefully. If you don’t make it clear which contract you’re relying on, or if there’s any confusion about whether one or more contracts are involved, you may open yourself up to jurisdictional challenges. The safer route is to identify the contract clearly in the Notice and describe how the dispute arises from it. If you’re referring multiple issues, think carefully about whether they really belong together or risk your adjudication suffering from jurisdictional challenges or being thrown out.

David:

Thanks Aanya and thanks Peter. That brings us to the end of this episode of Inside Adjudication by Sharpe Pritchard.

Thank you again for listening. We hope this podcast has helped you to build your understanding of what adjudication is.

If you enjoyed the podcast, please subscribe on Apple podcasts/Spotify or wherever you get your podcasts. And be sure to come back for our next discussion to help you get Inside Adjudication.

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.

Until then, we look forward to joining you for the next episode of Inside Adjudication.