Published in November 2024 by King鈥檚 College London in collaboration with the Adjudication Society, the latest report on construction adjudication marks the culmination of a three-year project examining the effectiveness and attractiveness of construction adjudication in the UK.

Building upon the findings of the 2022 and 2023 reports, it provides an exhaustive account of the current trends and issues in construction adjudication.

The report highlights several key findings, which include:

• A record number of referrals to adjudication (2,264 between May 2023 and April 2024)
• Low numbers of court decisions concerning adjudications (only 219 in the TCC since October 2011)
• High levels of compliance with adjudication decisions (52% of respondents not referring adjudication decisions to litigation or arbitration in the past year)
• The most common claims range between 拢125,000 and 拢500,000
• The top causes of disputes include inadequate contract administration, lack of competence of project participants, exaggerated claims, and changes by clients

This article looks at these findings and considers what the construction industry can take from them as we move into 2025.

Adjudication and compliance with decisions

Between May 2023 and April 2024, the number of adjudication referrals received by adjudicator nominating bodies (ANBs) reached a record high of 2,264, a 9% increase from the previous year. This upward trend in parties engaging in adjudication is accompanied by high levels of compliance with adjudication decisions. For instance, 52% of respondents reported that in the past year, they did not have a single adjudication decision referred to litigation or arbitration, with a further 18% stating that less than 5% of their cases had been challenged in those forums.

These figures confirm that adjudication continues to play a crucial role in resolving construction disputes. Indeed, since October 2011, there have only been 219 court decisions concerning adjudication in the Technology and Construction Court (TCC), compared to the circa 2000 adjudication referrals for the last five years alone.

One reason for parties鈥� preference for adjudication is the ability to resolve matters in short timescales. In the past year, 48% of adjudication decisions were issued between 29 and 42 days from the date of decision. This is significantly quicker than the lengthy process of court proceedings. Additionally, adjudication decisions are confidential, offering heightened levels of privacy for parties.

Commercial factors also play a role in the preference for adjudication as a dispute resolution forum. Adjudication is often (but not always) used in relation to more modest claim values. For instance, the report highlighted that 42% of claim values fell between 拢125,000 and 拢500,000, 28% between 拢500,001 and 拢1 million, and 18% between 拢1 and 拢2 million. Such sums can have a substantial impact on the cash flow of a business, making the speedier process of adjudication an attractive option for parties.

Causes of dispute

The report identified that the two leading causes of disputes in construction adjudication in the past year are inadequate contract administration, at 50%; and lack of competence of contract participants, at 42%. Other key causes were exaggerated claims and changes by clients.

Inadequate design documentation and inaccurate design information were also common causes of disputes, noted by 13% and 10% of respondents, respectively.

Smash-and-grab adjudications were the most common category of claim in the past year, followed by true value disputes (both final accounts and interim payments), and loss of expense and/or damages for delay and/or disruption.

These trends reveal that proper contract management is at the heart of dispute avoidance. Through properly understanding and administering their contracts, parties can avoid the most common pitfalls which give rise to disputes.

Contract administration is a matter in the control of the parties and accordingly this is a risk that can be managed. In particular, parties should be careful to take a systematic approach to administrating payment mechanisms and other mechanisms which require the giving of notice.

The Report provides valuable insights into adjudication and the issues which are most impacting the construction industry. The statistics are not new, and show trends that have been developing for a number of years.

For an industry in which some risks are difficult to foresee or avoid, the Report is a helpful reminder that many of the factors which tend to give rise to disputes can in fact be controlled. Parties can avoid some of the most common types of dispute through effective and systematic contract administration, good record-keeping and clear communication throughout the project. ce