For subcontractors, adjudication support becomes relevant when an unresolved payment or valuation dispute may justify adjudication. The first issue is whether a dispute has crystallised under the subcontract and whether the remedy sought is clear.
A premature referral can incur avoidable preparation cost and expose evidential weaknesses before the claim is ready. A delayed referral can increase cash flow risk, prolong non-payment and allow the other party more time to maintain its valuation or payment position.
The readiness review should start with the subcontract, payment chronology, service evidence, amount in dispute, remedy and valuation records. Those checks should come before serving a notice of adjudication or preparing the referral notice.
This article helps subcontractors decide whether the dispute is ready for adjudication preparation, focused negotiation, further substantiation or response planning.
Key Takeaways
- Subcontractors should consider adjudication when a dispute has crystallised and the remedy sought is clear.
- An adjudication readiness review should assess the amount at stake, evidence, timing and likely cost before referral.
- The subcontract and statutory adjudication framework should support the route being used.
- A referral needs payment or valuation evidence, correspondence and a clear chronology that support the dispute referred and the remedy sought.
- Negotiation may be more proportionate where the amount at stake is low, the dispute has not crystallised or the evidence requires further substantiation.
- Consider jurisdiction and remedy risk before serving the notice of adjudication, especially where the subcontract route, parties, service or dispute description is unclear.
- The readiness review should identify whether referral, response planning, further substantiation or focused negotiation is supported by the subcontract position, evidence, remedy and dispute status.
Key Definitions
Dispute crystallisation. The point at which a claim, valuation or payment position has become a dispute or difference capable of referral to adjudication because it has been sufficiently identified and it is objectively apparent that the other party does not admit it.
Notice of adjudication. A written notice by which a party to a construction contract gives notice of its intention to refer a dispute arising under the contract to adjudication. Where the Scheme applies, the notice must be given to every other party to the contract and must briefly identify the dispute, the parties involved, where and when the dispute arose, the redress sought, and the names and addresses of the parties to the contract.
Payment notice. A notice under the payment provisions of a construction contract stating the sum that the person giving the notice considers to be or to have been due at the payment due date and the basis on which that sum is calculated.
Referral notice. The referring party’s written referral of the dispute to the adjudicator. Where the Scheme applies, the referring party must refer the dispute in writing to the adjudicator not later than seven days from the date of the notice of adjudication. The referral notice must be accompanied by copies of, or relevant extracts from, the construction contract and the documents relied on. The referring party must send copies of the referral notice and accompanying documents to every other party to the dispute at the same time.
Response. The responding party’s written answer to the referral in an adjudication, served under the applicable adjudication procedure or the adjudicator’s directions. It may address jurisdiction, service, valuation, factual evidence, payment issues, remedy or other matters raised by the referral.
Jurisdiction. The adjudicator’s authority to decide the dispute referred. In construction adjudication, jurisdiction may depend on the existence of a construction contract, whether a dispute arising under that contract has crystallised, the parties, the notice of adjudication, service, the adjudicator’s appointment and the scope of the referral.
Remedy. The redress or decision requested from the adjudicator in respect of the dispute referred. It may include payment, a declaration or a valuation decision where that relief falls within the adjudicator’s jurisdiction.
When Adjudication Support Is Worth Considering
Subcontractors should consider adjudication when three points align:
- the dispute has crystallised;
- the amount at stake justifies the likely cost; and
- the evidence supports the remedy sought.
Section 108 of the Housing Grants, Construction and Regeneration Act 1996 gives a party to a construction contract the right to refer a dispute arising under the contract to adjudication. The subcontract still matters because it may identify the adjudication procedure, adjudicator nomination route and any agreed dispute provisions, subject to any applicable Scheme requirements.
At the first review, the readiness assessment should test the adjudication route relied on, dispute status, remedy sought and evidence before document preparation begins. The question is whether adjudication is likely to improve recovery prospects, support a clearer negotiation position or resolve the payment position within a proportionate cost.
An unresolved payment or valuation issue is not enough to justify referral. Before serving a notice of adjudication, the subcontractor should identify the dispute to be referred, confirm that it has crystallised and check the adjudication procedure that applies.
The review should also define the decision or redress sought. Where the remedy is payment, it should identify the sum claimed, the payment or valuation basis, the notices and service evidence relied on, and the chronology showing how the dispute arose.
Where the dispute appears to have crystallised, adjudication support can test the notice position, referral scope, remedy sought and evidence gaps before the subcontractor incurs referral preparation cost.
Adjudication is a statutory dispute-resolution process for construction contracts. Before referral, the subcontractor should check the subcontract adjudication provisions, any applicable Scheme requirements, the adjudicator nomination route and any jurisdiction issue affecting the dispute referred.
Subcontract Route and Construction Adjudication Process
The construction adjudication process should start by checking whether the subcontract is a construction contract for statutory adjudication purposes, whether the dispute arises under it and whether the adjudication provisions or the Scheme govern the route.
The Scheme for Construction Contracts may apply where the subcontract does not comply with the statutory adjudication requirements. That point should be checked carefully because procedure, timing and appointment can affect the referral route.
Before drafting the notice of adjudication, the readiness review should check the adjudication provisions, adjudicator nomination route, service requirements and dispute scope. A notice of adjudication that identifies an unclear, uncrystallised or different dispute can create jurisdiction risk and make the referral harder to sustain.
The notice of adjudication should identify the dispute without presenting the full case. The referral notice then sets out the referring party’s case on that dispute, with the documents, valuation evidence, remedy sought and any expert evidence relied on.
The likely response should also be tested before referral. In a payment dispute, the other party may raise valuation, set-off, jurisdiction, evidential points or challenges to service of notices, applications, payment notices, pay less notices or the notice of adjudication.
Early review should separate the right to adjudicate from the decision to refer. The statutory right may provide a route, but the subcontract, payment chronology, evidence, remedy and likely cost determine whether referral is proportionate.
Evidence, Valuation and Remedy Before Referral
A referral should be supported by evidence that explains the dispute referred and the remedy sought. Incomplete or poorly linked records can increase preparation cost, leave payment or valuation evidence unsupported and make the remedy harder to prove.
At the evidence stage, the readiness review should identify the adjudication route relied on. In payment and valuation disputes, this may concern a notified sum, a final account or a true value or valuation dispute. It may also concern another dispute under the subcontract.
The review should then test the notice position, payment mechanism, valuation basis, service evidence, records and substantiation. It should also test causation where causation is part of the dispute.
For payment disputes, the review should first identify whether the issue is a notified sum dispute, a valuation dispute or both. That can show whether the next step should be referral, further substantiation or negotiation.
Valuation evidence should explain the sum claimed and show the basis of calculation. Relevant records may include:
- account breakdowns;
- applications;
- change records;
- correspondence;
- dayworks;
- measures;
- payment notices;
- pay less notices;
- photographs; and
- project records.
The review should map the subcontract mechanism, payment chronology and dispute chronology before referral. It should then test the notice position, notified sum or valuation basis, records, substantiation and causation where causation is part of the dispute.
A payment review should test the payment mechanism, due date, final date for payment, payment notice, pay less notice, notified sum, service evidence and any valuation dispute before adjudication is pursued.
The remedy sought should be clear and capable of being decided within the adjudicator’s jurisdiction or remit. The subcontractor should know whether it seeks payment, a declaration, a valuation decision or another outcome supported by the referred dispute and evidence.
Where independent delay analysis is required, delay expert opinion may address causation, programme effect, critical path and the period of delay.
Where independent quantum analysis is required, quantum expert opinion may address valuation, cost causation, substantiation and financial assessment.
Evidence gaps do not always prevent adjudication. They can affect preparation cost, valuation substantiation, evidential risk and the referring party’s ability to prove the remedy sought.
When Negotiation May Be More Proportionate
Negotiation may be more proportionate where the dispute has not crystallised. It may also be more proportionate where the other party has not yet had a reasonable opportunity to respond, or where the remedy remains unclear.
Where negotiation remains possible, the review should identify whether adjudication is needed to obtain a decision or whether further preparation should come first.
An adjudication may result in a decision, but missing records or weak substantiation may make the remedy harder to prove.
The amount at stake matters. A smaller unpaid sum may support a focused letter, meeting or revised substantiation before a formal referral.
Timing also matters. If the project relationship still has value, a narrow payment agreement may protect cash without creating a wider dispute.
The subcontractor should choose the route that best matches the dispute, evidence and commercial objective. That route may be a meeting, a revised valuation submission, further substantiation or a referral.
Practical Checklist
- Confirm the dispute, remedy and amount at stake before deciding whether adjudication is proportionate.
- Check the subcontract, adjudication provisions and any amendments.
- Confirm whether the dispute has crystallised through correspondence, rejection, non-admission or failure to respond.
- Identify the notices, applications, payment notices, pay less notices and service evidence.
- Build a chronology that links the claim, the other party’s rejection, non-admission, failure to respond or valuation position, and the unpaid sum.
- Test payment, service and valuation evidence against the remedy being sought.
- Estimate adjudicator fees, preparation cost, likely recovery and cash flow impact.
- Decide whether the evidence and dispute status support referral, response planning, negotiation or further substantiation.
Common Mistakes
- Starting adjudication because payment is late without confirming dispute crystallisation, service and the other party’s rejection, non-admission or failure to respond within a reasonable time. The referral may be exposed to jurisdiction, service or evidential challenge.
- Treating the notice of adjudication as a full claim document. The notice should identify the dispute and redress or remedy sought, while the referral notice should set out the detailed case.
- Ignoring jurisdiction risk where the subcontract route, parties, service or dispute description remains unclear. That can create a jurisdiction challenge before the substantive payment or valuation dispute is reached.
- Claiming a sum without explaining the payment mechanism, notices, valuation evidence and basis of calculation. The adjudicator needs a clear route from the subcontract mechanism and records to the amount claimed.
- Using the referral to fill evidential gaps rather than presenting a clear chronology and substantiation. That can increase preparation cost and make the remedy harder to prove.
- Missing the due date, final date for payment, payment notice or pay less notice position before choosing the route. That can blur the distinction between a notified sum dispute and a valuation dispute.
- Treating adjudication support as document production only. A readiness review may show that referral, negotiation, further substantiation or response planning is the more appropriate route.
ICRS View
Adjudication should follow a disciplined readiness review because the short timetable makes dispute definition, chronology, valuation evidence and substantiation critical.
In our view, the correct sequence is:
- confirm the statutory and subcontract adjudication route;
- define the crystallised dispute and remedy sought;
- test notices, payment chronology and service evidence;
- assess payment or valuation evidence and substantiation; and
- decide whether the evidence and dispute status support referral, negotiation, response planning or further substantiation.
That sequence matters because adjudication is a fast dispute process. The referring party must explain the subcontract mechanism, entitlement, valuation, evidence and remedy within a short timetable.
A referral is properly prepared where it explains entitlement, payment or valuation evidence and supporting records clearly. If that explanation is missing, further substantiation may be needed before referral.
Frequently Asked Questions
- When should a subcontractor seek adjudication support before referral?
Seek it when the dispute has crystallised, the remedy is clear and the amount at stake justifies the likely cost. The first review should test the subcontract route, notices, payment records and valuation evidence, and should anticipate possible jurisdiction, service, valuation or evidential challenges.
- What affects the cost of adjudication support?
Cost depends on the dispute value, document volume, evidence quality, adjudicator fees and the work needed to prepare for or respond to the referral. A small dispute can become uneconomic if the evidence requires substantial further substantiation.
- How long does adjudication take?
Adjudication usually works to a short statutory timetable. The adjudicator should generally reach a decision within 28 days after the referral notice is received, subject to permitted or agreed extensions. That is why evidence, chronology, valuation and response planning should be ready before the notice of adjudication is served.
- What evidence should be checked before adjudication?
Useful evidence may include the subcontract, notices, applications, payment notices, pay less notices, correspondence, valuation records, site records, photographs, programme material and a clear explanation of the remedy sought.
- Is adjudication always the right route for a construction payment or valuation dispute?
No. Negotiation, further substantiation, expert evidence or another dispute-resolution route may be more proportionate where the dispute is not mature, the evidence requires further substantiation or the likely recovery is disproportionate to the adjudication cost.
Disclaimer. This article is provided for general informational and educational purposes only. It does not constitute legal, or other professional advice. While we aim to keep the information accurate and up to date, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, or suitability of the information. Any reliance you place on this content is strictly at your own risk.