This article is all about What is Ad-hoc adjudication in the construction industry ?. This phrase ‘ad-hoc’ is used from time to time in connection with Adjudication. It is important to know what it means and how it can affect you even if you think Adjudication is not included in your contract.
We support legal representation in more complex cases but we want to encourage especially smaller companies to feel more confident fighting for their contractual rights.
So, what is Ad-hoc Adjudication? Trying to break this term into its individual words brings some form of clarity.
‘Ad-hoc’ is a term that can be defined as ‘when necessary or needed’ or ‘something that has been formed or used for a special and immediate purpose, without previous planning’.
Therefore, combining the two together means that Ad-hoc adjudication is a form of dispute resolution that has been created without previous planning for some specific purpose.
It is not the cleanest of descriptions is it?
A better way of saying it is that both parties to any construction contract can agree to refer a dispute to adjudication even if there is no statutory right to adjudication in the existing contract or by existing law. They can create an ‘Ad-hoc Adjudication’ in this way.
It doesn’t matter if the contract mentions no clause regarding Adjudication or even if there is no written contract. The right is always there.
Now, the big exclusion to this legal right to adjudication include contracts with residential occupiers — people who are hiring builders or consultants to work on their main residence. There is no automatic legal right to adjudication for either party.
A right to refer a dispute to Adjudication may be incorporated into the contract as an express clause but if there is no clause, then there is no right.
Yes, it is not unlawful for two parties to agree to enter into the adjudication process even though there is no express clause in the contract. It does not matter that the contract is excluded from the construction act and scheme.
Very simply, a residential occupier may knowingly expressly agree to enter into adjudication with the builder so as to avoid litigation. They are clear eyed about giving up their right to veto adjudication as a dispute resolution process.
However, a residential occupier may unwittingly give up their right to object to Adjudication. For example, the builder may refer a dispute to adjudication and if the residential occupier does not object, an ad-hoc adjudication is created.
This means that if the other party does not reserve their right to object to the Adjudicator’s jurisdiction, then it may be deemed as consent to the Adjudication process.