Statutory adjudication - the 2024 survey results are in…

Three clear questions arise from the 2024 report on statutory adjudication released earlier this month. The report, titled 2024 Construction Adjudication in the UK: Tracing Trends and Guiding Reform, marks the third year of a strong collaboration between the Adjudication Society and the Dickson Poon School of Law at King’s College London..

Before embracing the three questions, we set out key data points from the report – points that should not surprise any of you:

Number of referrals is at its highest point: The number of adjudications commenced is at its highest ever point, with 2,264 referrals being issued (representing a 9% increase on 2023). However, 20% of these relate to low-value disputes or the fast-track adjudication procedure. It is also unclear how many decisions are rendered relative to the number of referrals.

Number of adjudicators and costs: 721 adjudicators are registered on adjudicator nominating body (ANB) panels – many will be registered with several ANBs and so the number of registrations does not correlate to the number of adjudicators. The most common hourly rate of adjudicators is between £301 and £350. Most individual respondents at 26% stated that adjudicator’s fees charged were between £20,001 and £30,000.

The most common value of an adjudication claim was between £125,000 and £500,000

Value and causes of disputes: The most common value of an adjudication claim was between £125,000 and £500,000, and 28% stated that the most frequent value of claims was between £500,000 and £1m. Causes of disputes are inadequate contract administration, at 50%; lack of competence of contract participants, at 42%; exaggerated claims and changes by client, at 30% each; and adversarial industry culture at 25%.

Enforcement of adjudicators’ decisions and subsequent litigation or arbitration: Compliance with adjudication decisions is high. This is reinforced by data from the courts. Since October 2011, the Technology and Construction Court (TCC) rendered 219 reported judgments on enforcement of adjudicators’ decisions and fully enforced 77% of the adjudication decisions. In 23% of cases, enforcement was denied in whole or in part. Jurisdictional challenges were successful in defeating 15% of adjudication decisions, followed by breach of natural justice at 10%, and other disparate grounds (such as fraud) at 7%.

Diversity in adjudication: Eight participating ANBs track diversity in adjudicator panels. Women account for only 8.9% of adjudicators on such panels. Seven ANBs signed the Equal Representation in Adjudication Pledge published by the Adjudication Society; 80% of individual questionnaire respondents are aware of the pledge but only 54% have signed it.

>>Also read: Adjudication offers speed – and not at any cost

>>Also read: Proper contract execution is vital

Standing back a little and reflecting on the data in the reports over the last three years, it is apparent that nothing much has changed – it appears that the courts still support strongly statutory adjudication; that the ANBs are still popular; and that the demographic of the adjudicator world has not reformed. The annual reports prompt three reservations:

Lay clients are the most important stakeholder, and the adjudication world and researchers need to recognise their views and concerns

• Tangible decline in survey respondents: Only 166 people took part in the 2024 survey. On any reading this is an incredibly small number and especially so when one considers the number of people involved in the construction law world. By comparison, 257 people took part in the 2022 survey – and so there must be a question around the lack of interest. Perhaps the bigger danger is drawing meaningful conclusions from such a small data set where certain subjective views can inadvertently create a disproportionate assessment.
• No data on user satisfaction: While many correlate the increased number of referrals with the ostensible success of statutory adjudication, there is no data on whether users of statutory adjudication are happy, unhappy, concerned or comfortable with the statutory procedure. It must be a concern that lay clients who use statutory adjudication do not get a section in the reports. Lay clients are the most important stakeholder, and the adjudication world and researchers need to recognise their views and concerns.
• ANBs: Do we have too many ANBs? Should there be a limit on how many panels an adjudicator can sit on? Should ANBs be required to publish annual data on referrals, decisions, and how many adjudicators received no appointments? Should ANBs be regulated and audited? ANBs play a vital role in statutory adjudication yet there is very little data on the inner workings of such ANBs. An obvious concern for users is that the lack of plurality in decision-makers leads to similar thinking and approach. This is especially the case where adjudicators happily quantify entitlements based on the information in the files, rather than deciding the dispute based on each party’s submissions on the information in the files.

Sir Michael Latham’s 1994 report Constructing the Team led to statutory adjudication. Patently, adjudication has assisted cash flow in the industry and very clearly the courts are supportive hugely of statutory adjudication. Some 30 years post Latham, it is imperative that adjudication procedures continue to evolve but in so doing remain mindful of what lay clients really want from statutory adjudication – focused research on this latter point appears sensible.

Hamish Lal is chairman of the Adjudication Society and adjunct professor of law at Sutherland School of Law, University College Dublin