The latest report from King’s College London’s Centre of Construction Law and Dispute Resolution provides an in-depth analysis of trends and behaviours in UK statutory construction adjudication. Based on surveys with adjudicator nominating bodies (ANBs) and individual respondents, the report sheds light on key areas such as referral trends, adjudicator demographics, claims, costs, and enforcement.
Referral trends
The number of adjudication referrals has steadily increased since statutory adjudication’s introduction in 1998. Between May 2023 and April 2024, referrals peaked at 2,264—a 9% increase from the previous year. This marks the highest figure on record, with the second-highest recorded in 2020/21 at 2,171 referrals.
Fast-track or low-value adjudication procedures accounted for a significant portion of cases, representing almost 20% of referrals for seven ANBs offering such services. Notably, 51% of referrals handled by CIArb used this procedure, with ICE and UK Adjudicators following at 35% and 23%, respectively.
Adjudicator demographics
The total number of adjudicators registered with ANBs reached 791 in April 2024, the highest in eight years. UK Adjudicators held nearly one-third of all registrations. While some ANBs, including CIC, RIBA, and TECBAR, saw slight membership increases, many adjudicators are registered with multiple ANBs, meaning the total number of adjudicators is lower than registrations suggest.
Claims: values, causes, and categories
The most common claim values ranged between £125,000 and £500,000, identified by 42% of respondents, while only 4% reported claims under £25,000. Larger claims between £500,000 and £1 million accounted for 28% of responses.
The leading causes of disputes were inadequate contract administration (50%) and lack of competence among contract participants (42%). Other notable causes included exaggerated claims and client-driven changes (30% each) and adversarial industry culture (25%).
“Smash-and-grab” adjudications dominated claim categories, cited by 63% of respondents, followed by true value claims for final accounts (38%) and interim payments (35%). Disputes over loss, expense, and delays were also common, at 35%.
Duration of proceedings
Adjudications typically concluded within 29 to 42 days, according to 48% of respondents. However, 32% reported proceedings exceeding 42 days, contingent on both parties’ agreement. Complexity was the primary factor influencing duration (60%), followed by party behaviour (24%). Only 16% of respondents noted adherence to the default 28-day period under the Construction Act.
Costs
Adjudicators’ hourly rates most frequently fell between £301 and £350 (39%), with a median in the same range. Total fees varied widely but were most commonly reported between £12,001 and £14,000. The overall cost depended on the dispute’s complexity, duration, and adjudicator’s fees.
Enforcement and subsequent litigation
Compliance with adjudicators’ decisions remained high. Over half (52%) of respondents reported no referrals to litigation or arbitration, and 18% stated fewer than 5% of cases advanced to these stages.
Of the 219 judgments rendered by the Technology and Construction Court (TCC) since October 2011, 77% of adjudication decisions were fully enforced. Enforcement was denied in part or full in 23% of cases, with jurisdictional objections accounting for 15% of such instances.
Adjudication and insolvency
Adjudications involving insolvent parties were relatively rare. Only 18% of respondents had participated in adjudications initiated by insolvent parties, while 10% dealt with claims against them. Enforcement by insolvent parties was exceedingly uncommon, at just 1%.
In summary, the latest statistics contained within the report from King’s College London’s Centre of Construction Law and Dispute Resolution highlights the importance of adjudication and its role within the dispute resolution process within construction disputes. It appears that more and more disputes are being referred to adjudication and the information provided shows that it is an effective method to quickly resolve a dispute, which is ever becoming more important due to the increased financial pressures developers, main contractors and sub-contractors face on a daily basis.
If your company is having difficulty reaching a resolution with another party on a construction project do not hesitate to contact one of our construction dispute resolution solicitors on 0161 696 6178.
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