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HomeArticlesTony BinghamNEC Contracts : Dispute Adjudication in the UK

NEC Contracts : Dispute Adjudication in the UK

When it comes to dispute resolution there is an important difference in NEC contracts from JCT and other standard form contracts.

This week, Tony Bingham highlights when adjudication is a must or an option.

In NEC contracts you are obliged, must, shall adjudicate before going on to litigate or arbitrate. That requirement is lawful. However, the Parliamentary provisions for adjudication did not envisage going that far. The ‘Construction Act’ gives a mere option to adjudicate.

In NEC contracts, it is a must.

The Construction Act merely allows either party to trigger an adjudication at any time if he wishes. He can bypass adjudication and go straight to litigation or arbitration if arbitration is the chosen tribunal. Not so in NEC contracts. Adjudication is a condition precedent. This idea is a left over from the days of the old civil engineering contract documents whereby you had to argue and obtain an ‘Engineer’s Decision’ before you could ‘go legal’. Nowadays in NEC contracts you have to obtain an Adjudicator’s Decision before you ‘go legal’. This is not always a satisfactory approach to a dispute. It may be that the mere temporary finality of the Adjudicator’s Decision is wasteful on costs. That can happen when one party (at least) is hell bent on taking the quarrel to litigation / arbitration for a final binding decision. More usual adjudication clauses do not impose a ‘Must Adjudicate First’ requirement.

Beware too, having adjudicated, of a trap in the rules. You only have 4 weeks from the Adjudicator’s Decision to flag-up an intention to go on to litigation or arbitration. Miss that 4 week time limit, and you cannot thereafter take the adjudicated dispute into the final tribunal ... you are stuck with the adjudication result.

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