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A Practical Guide to
Construction Adjudication

James Pickavance

Eversheds LLP

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As Sir Rupert Jackson aptly commented, the mass of authorities on adjudication once formed an impenetrable jungle.

Since an illuminating path through this jungle has been created by the well-known work of my colleague, Mr Justice Coulson, it might be asked why there is a need for another book on the subject. I think that the reader of this valuable work by James Pickavance will soon find the answer.

Part 1 of this book, whilst fully supported by references to decided cases, is very much directed towards the practitioner who has to advise his or her client on a construction dispute and then conduct or defend proceedings brought by way of adjudication. To this end it provides a clear route map together with helpful checklists at the conclusion of each chapter. It is this different approach that I think readers will find so helpful. The guidance in relation to insolvency and administration is particularly valuable.

As an added benefit, there is Part 2 - which deals with adjudication in other jurisdictions. I know of no other similarly comprehensive guide and it is a fascinating and illuminating source of reference.

The final bonus is a comprehensive index of over 550 reported cases on adjudication, sorted into numerous subject headings that follow the subject headings in the main work.

This book does not set out to be a rival to existing works but to complement them. That is a role that I have no doubt that readers will find that it amply fulfils.

The Hon Mr Justice Edwards-Stuart
Judge in Charge of the Technology and Construction Court
August, 2015


I have sought the assistance of a number of individuals who have been kind enough to comment on, or write, sections or chapters, discuss issues and assist with various jobs.

In particular, my father and my uncle, with formidable experience in the industry, as adjudicators and as authors, have been of immeasurable assistance throughout this project. James Bowling of 4 Pump Court, provided me with erudite comments on insolvency, enforcement, set-off, adjudication strategy and losing the right to challenge the adjudicator's jurisdiction. Malcolm and Michael Harris of Harris Consulting, who between them have taken part in over 400 adjudications either representing parties or as adjudicators, have provided me with helpful insight that has been woven into several chapters of the book. Phillip Burton's technical prowess has allowed me to convert a vast spreadsheet into Appendix 8 and 9. Michael Mendelblat of Herbert Smith Freehills, kindly spent time reviewing part of an early edition and acted as a sounding board for ideas as the book took shape. Michael Conroy Harris of Eversheds helped produce the model forms. The Chartered Institute of Building, in particular Saleem Akram, offered and continue to offer vociferous support for the idea and production of this book.

Finally, thanks go to the authors of the chapters on jurisdictions other than England & Wales: Tony Jones of Brechin Tindal Oatts for Scotland, Michael Humphreys QC for Northern Ireland, Peter Wood and Phillip Greenham of Minter Ellison for Australia, Dermot McEvoy of Eversheds for Ireland, Philip TN Koh of Mah-Kamariyah & Philip Koh for Malaysia, Tómas Kennedy-Grant QC for New Zealand and Steven Cannon of Eversheds for Singapore. Although I have edited these chapters to a greater or lesser extent, any credit must go entirely to the authors. I have been very fortunate indeed that they agreed to contribute to this book.

James Pickavance
Hackney, London
September 2015

Part I
The United Kingdom

Chapter 1

1.1 Overview

  1. [1.01] Construction adjudication can be defined as an interim dispute resolution procedure by which the parties submit their dispute to an independent third party for a decision.
  2. [1.02] In the UK, adjudication is available as a right for parties to a construction contract, following the enactment of the Housing Grants Construction and Regeneration Act 1996 (the 1996 Act).1 Unless the timetable has been extended, within a comparatively short period of time, parties will have a decision from an adjudicator, which save for in limited circumstances the courts will enforce. The mandatory and expedited nature of the process were the principal reasons why it was catapulted to the number-one method of dispute resolution in the construction industry no more than a year after the 1996 Act was passed and it is likely to retain its dominance for the foreseeable future, particularly as amendments made to the 1996 Act in 2011 widen the scope of its application.
  3. [1.03] The short timescale means that once an adjudication has commenced, there is very little time in which to learn or remind oneself about process and procedure. One needs to know quickly what to do, when to do it and, just as importantly, check that the other party and the adjudicator are following the right steps and, if not, what to do about it.
  4. [1.04] This part of the book aims to facilitate this, by providing a straightforward narrative of the process and procedure of adjudication. So far as it is possible to do, topics are presented in the order one would expect to encounter them. The procedure is interpreted and explained by reference to case law and enveloped with guidance on how to approach an issue, suggestions on what to do or not to do in certain situations, drafting tips and checklists at key points. In essence, this part of the book is a practical guide on construction adjudication in the United Kingdom.
  5. [1.05] There are three legal jurisdictions in the United Kingdom: England and Wales, Scotland and Northern Ireland. England and Wales is by far the largest economy of those jurisdictions and, no doubt at least partly for this reason, adjudication is more prevalent. Therefore, the majority of this part will explain the adjudication process by reference to the rules that apply in England and Wales. Although the primary legislation applies equally in each jurisdiction, secondary legislation does not enjoy the same uniformity. Furthermore, judicial precedent set in England and Wales, Northern Ireland and Scotland does not bind the courts in the other countries (although it is of persuasive influence). The result is a divergence of opinion on certain matters relating to adjudication. Accordingly, the key differences in legislation, procedure and judicial interpretation in Scotland and Northern Ireland are addressed separately in Chapters 19 and 20 respectively.

1.2 Background to statutory adjudication in the UK

  1. [1.06] In the 1970s and 1980s, payees2 in the construction industry often struggled to ensure that they were remunerated in a timely fashion for the work they had done. The House of Lords decision of Gilbert-Ash (Northern) Ltd v Modern Engineering (Bristol) Ltd3 in the early 1970s did not help. The decision effectively enabled payers to avoid paying payees merely by advancing a cross-claim. If the payee wished to contest the payer's position, the only way it could compel the payer to pay was either by a decision of the court or by an arbitral tribunal. Both litigation and arbitration would (and still do) take months at best, more likely years to reach a conclusion. Commercial intimidation was rife, with the result that thousands of firms were forced out of business. What the industry needed was a dedicated enforceable fast-track dispute process.4
  2. [1.07] Soon after the recession of the early 1990s, Sir Michael Latham was commissioned by the government and industry organisations to review procurement and contractual arrangements in the UK construction industry, with the aim of tackling payment and other issues. In 1994, he published a paper called Constructing the Team, which set out 30 recommendations for how to tackle the problems faced. Recommendation 25 was that Parliament should enact legislation to ensure that the payer paid the whole sum applied for unless it notified the payee of its contrary intention within a fixed period of time, specifying the reasons why. If there was no notification, the payee would be entitled to the amount applied for, regardless of any reason the payer had for not paying. The aim was to ensure that a payee received money to which it was entitled expeditiously without having to embark on lengthy and expensive litigation. Recommendation 26 was that where parties do fall into dispute, they have available to them a dispute resolution process that facilitates a quick and inexpensive platform for hearing the dispute, and that results in an impartial decision to which the parties must comply forthwith. To that end, adjudication should be the ‘normal process of dispute resolution’. Those recommendations were, more or less, taken up by Parliament and drafted into the 1996 Act.
  3. [1.08] The 1996 Act is one of the most important pieces of legislation for the building and civil engineering industry in recent times. It has now served the construction industry for over 17 years. The huge reliance that is placed on adjudication, together with the court's robust attitude to the enforcement of adjudicators' decisions are evidence that many of Sir Michael Latham's recommendations have been implemented successfully (although critics will say that the tens of thousands of adjudications and the 600+ reported court decisions evidence the fact that the legislation has failed in one of its goals, which was to reduce conflict in the industry).
  4. [1.09] Perhaps the best statement which summarises the intent behind statutory adjudication can be found in a frequently cited extract of the decision of Mr Justice Dyson in Macob Civil Engineering Ltd v Morrison Construction Ltd.5

    The intention of Parliament in enacting the Act was plain. It was to introduce a speedy mechanism for settling disputes in construction contracts on a provisional interim basis, and requiring the decisions of adjudicators to be enforced pending the final determination of disputes by arbitration, litigation or agreement… It is clear that Parliament intended that the adjudication should be conducted in a manner which those familiar with the grinding detail of the traditional approach to the resolution of construction disputes apparently find difficult to accept. But Parliament has not abolished arbitration and litigation of construction disputes. It has merely introduced an intervening provisional stage in the dispute resolution process. Crucially, it has made it clear that decisions of adjudicators are binding and are to be complied with until the dispute is finally resolved.

  5. [1.10] The implementation of a regime whereby disputing parties could have an interim binding decision on a disputed issue within a few weeks was, and still is, a revolution that has transformed the landscape of construction disputes.

1.3 Statutory adjudication regimes

  1. [1.11] In England and Wales, the 1996 Act came into operation on 1 May 1998.6 It applies automatically to all contracts within its scope on or after that date and cannot be contracted out of.
  2. [1.12] For a number of reasons, Parliament decided that certain changes should be made to the adjudication and payment provisions of the 1996 Act. After seven years and three public consultations, the 1996 Act was amended by Part 8 of the Local Democracy, Economic Development and Construction Act 2009.7 This book refers to the amended 1996 Act as the 2009 Act. In England and Wales, the 2009 Act came into force on 1 October 2011.8
  3. [1.13] Where there is a difference between a section in the 1996 Act and a section in the 2009 Act, they shall be distinguished and referred to accordingly. Where there is no difference, the reference shall be to the “Act”. At the time of writing, it is estimated that around 80% of all adjudications arise out of contracts to which the 2009 Act applies. This percentage will continue to increase, making the provisions of the 1996 Act less and less relevant.
  4. [1.14] In addition to primary legislation, each UK jurisdiction has enacted secondary legislation. Part 1 of this legislation is in essence a set of rules, which will either be chosen or imposed on the parties, by which parties and the adjudicator conduct the adjudication. In England and Wales, the legislation is called the Scheme for Construction Contracts (England and Wales) Regulations 19989 (the 1998 Scheme) and was brought into force on 1 May 1998, on the same day as the 1996 Act. In order to align this instrument with changes brought in by the 2009 Act, in England, the 1998 Scheme was amended by the Scheme for Construction Contracts (England and Wales) Regulations 1998 (Amendment) (England) Regulations 2011, which also came into operation on 1 October 2011.10 This book refers to the amended Scheme as the 2011 Scheme. Where there is a difference between the paragraphs in the 1998 Scheme and the 2011 Scheme, they shall be distinguished and referred to accordingly. Where the paragraph is the same, the reference shall be to the Scheme.
  5. [1.15] Thus, there are in effect two regimes: the ‘old’ regime which was brought into force in May 1998 and the ‘new’ regime which was brought into force in October 2011. In the main, the differences between the old and new regimes, at least in relation to the scope of the Act and the adjudication provisions, are not particularly extensive. Where there are differences between the two regimes, they will be highlighted in the relevant sections of this book.

1.4 Use of case law in this part

  1. [1.16] The courts of England and Wales, Scotland and Northern Ireland have generated a significant body of case law arising out of the construction adjudication, in particular the interpretation of the statutory adjudication frameworks in those jurisdictions. England has generated by far the largest amount (around 85%), followed by Scotland, then Northern Ireland. Although judicial precedent in each of these three jurisdictions does not bind the others, it is persuasive and is routinely referred to by counsel and judges.
  2. [1.17] Court judgments are a vital component of understanding the rules and procedures of adjudication. In addition to providing the parties to a particular dispute with a determination of their issues, judgments provide the public with a body of opinion on how the law is to be interpreted, given a particular set of facts. Unless overturned, the views expressed by the judges are binding both on the parties to the dispute and anyone thereafter. These binding opinions, layered on top of one another over time, have gradually closed down areas of ambiguity in the process and procedure or have defined issues that are not expressly dealt with by legislation.
  3. [1.18] In the usual way, this part of the book cites cases and extracts from court judgments in support of statements made. However, the presentation of those cases is perhaps different from many other books in three respects.
  4. [1.19] Invariably there are several cases, sometimes as many as 50, addressing the same topic. While some of those cases will espouse new points of principle, most will apply existing principles to the particular facts of the case. Rather than cite and summarise every single case or a topic in the body of this book, the number of cases cited is limited to a small selection that evidence a point of principle or exemplify a common factual scenario. However, there will be times when the reader needs to analyse every single decision on a topic. For that situation, Appendix 8 provides a case list of all reported court decisions that could be found since the 1996 Act was brought into force that address the subject of adjudication. The cases have been categorised into the topics they address. For ease of reference, those topics mirror exactly those addressed under each of the headings in Chapters 1–18 and appear in the same order. In theory at least, most if not all of the reported cases on any topic addressed in this book should be contained in the list.11 Appendix 8 therefore represents the most comprehensive published list of cases available from one source, numbering around 560.12 This number of cases, by comparison with other areas of law, is a phenomenal volume of case law, particularly given the comparatively short space of time in which it has been produced.13
  5. [1.20] All decisions arise out of a series of facts and circumstances, unique to that case. Where a party seeks to rely on the court's decision as support for the submissions in its case, it is important to ensure that the facts of the dispute in hand marry up sufficiently with the facts of the dispute in the court judgment. If they do not, a party may argue that the circumstances of a decided case are distinguishable from the present facts, such that the conclusions reached in the decided case do not apply. However, consistent with the purpose of this book, which is to act as a practical guide to adjudication and not as a case book, the facts and circumstances of cases cited in this part are invariably not set out, or if they are, they are set out succinctly. This has the happy benefit of allowing each topic to be dealt with in fewer words.
  6. [1.21] All the citations in the main body of the book, and in Appendix 8, refer not only to the name of the case and the neutral citation14 but also the paragraph number or numbers of the judgment relevant to the issue in hand. This should allow the reader to expedite the identification of the relevant part of the decision. This may only save a minute or two, but in the context of the compressed adjudication timetable, every minute counts. For reasons explained below, the paragraph numbering is taken from the judgments published by the British and Irish Legal Information Institute (Bailii)15 or where the case is not available on Bailii, at
  7. [1.22] What are the different ways one can access court judgments? The ‘traditional’ route is via one of a number of law reports. Judgments relating to construction adjudication are, for the most part, reported in at least one of the following: Adjudication Law Reports, the All England Law Reports, the Building Law Reports, the Construction Industry Law Letter, the Construction Law Journal or the Construction Law Reports. Many of these reports not only provide the text of the judgments, but also offer thoughtful and interesting commentary on the issues raised, written by highly regarded construction law practitioners. All of these reports are available in hard copy and online, but none of them are freely available. Furthermore each report is selective as to which judgments it chooses to report (generally those it considers are important or offer something ‘new’) and so one will not find a complete record of all adjudication cases from any of those sources.
  8. [1.23] Two of the most easily accessible, definitive, online and free sources of court judgments relating to adjudication are the websites and the adjudicator nominating body, Both websites are refreshingly free of bells and whistles. At the time of writing, all but a few of the judgments referred to in this book are contained on one of these two websites. Bailii is the more well-known and ‘official’ of the two sites, and judgments are typically posted on the site within a few days of being issued. However, it is generally easier to search for cases on because it contains only cases that relate to the Act (whereas Bailii has a much wider remit) and it also contains the judgments of a number of unreported decisions not available on Bailii. Furthermore, although it already contained head notes for some judgments, in late 2014, head notes were added for many more judgments, courtesy of the law firm CMS Cameron McKenna LLP.


Chapter 2
Adjudication in a nutshell

  1. [2.01] The idiom ‘I can't see the wood for the trees’ is one that will be familiar to most. Particularly in adjudication, where timescales are short and decisions often need to be made quickly, it is all the more important that concepts and procedural matters are understood as easily as possible. This book aims to achieve this by providing straightforward explanations on each topic succinctly, but without losing key points of detail. In addition, every chapter has an overview, and most second-level sections within each chapter commence with an ‘in a nutshell’ sub-section to offer the reader a quick summary of what follows. However, for those new to construction adjudication, it may assist, as a starting point, to read the following short chapter, which provides a high-level overview of the process with cross references to the relevant chapters.
  2. [2.02] Adjudication is a procedure that takes place over a relatively short period of time pursuant to which a dispute between parties is submitted to an independent determiner who, having received submissions from each party, makes a decision.
  3. [2.03] There are three forms of adjudication: statutory, contractual and ad hoc. In this book, statutory adjudication means the form of adjudication that must be adhered to where the Act applies to the contract between the parties. The Act will apply where certain conditions of the Act are met, such as whether the contract between the parties in dispute is a ‘construction contract’ as defined by the Act. Where the Act applies, the right to adjudicate is mandatory and cannot be contracted out of (Chapter 4). Contractual adjudication refers to the form of adjudication where the Act does not apply, but nevertheless the parties have agreed a mechanism in their contract by which they can adjudicate disputes. An ad hoc adjudication refers to a form of adjudication where the parties have agreed, or are deemed to have agreed to submit their dispute, without reservation, to adjudication, thereby giving an adjudicator ad hoc jurisdiction to decide the dispute in circumstances where the statutory adjudication regime does not apply and where there is no pre-existing contractual agreement to adjudicate (Chapter 5). Part 1 of this book addresses all three forms of adjudication, albeit that the main focus of attention lies with statutory adjudication.
  4. [2.04] The form of the adjudication is a separate matter to the procedure, or rules, by which the adjudication is to be conducted. This book describes two types of adjudication procedure in the UK: Scheme adjudications and contractual adjudications. In both cases, the procedures are nothing more than a set of rules that both parties and the adjudicator are required to follow. A Scheme adjudication is one governed by the rules set out in the Scheme for Construction Contracts which is a statutory instrument. A contractual adjudication procedure refers to any other adjudication procedure, whether it is contained within a standard form of contract or an industry body publication, or is drafted by the parties. Part 1 of this book explains both forms of adjudication procedure, but attention is mainly directed to Scheme adjudications, because that is by far the most common type of adjudication procedure adopted (Chapter 6).
  5. [2.05] Where the contract between the parties is caught by the Act and therefore the form of adjudication is statutory, before a referring party (the claiming party) is entitled to commence the adjudication, it must have satisfied a number of preconditions. For example, there must be an extant dispute between the parties. The referring party may only refer a single dispute. The dispute must not be the same or substantially the same as one already decided. The dispute must be contractual, in other words it must arise under the contract. The dispute must arise under one contract, not more than one contract, unless the parties agree. Where these preconditions are met, the referring party has an unfettered right to refer a dispute to adjudication at any time (Chapter 7).
  6. [2.06] The adjudication process is commenced by serving a notification of the intention to refer the dispute to adjudication on the other party (the ‘notice of adjudication’). The other purpose of the notice of adjudication is to outline who the parties are, what the dispute is about and what the referring party wants. Usually at the same time that the notice of adjudication is served, the referring party will request the appointment of an adjudicator. Where the form of adjudication is statutory, the adjudicator must be appointed within seven days of the notice of adjudication being served, otherwise the adjudication process will be invalidated. Depending on the terms of the contract and the applicable adjudication rules, the request will be made of an individual named in the contract, or a third-party organisation, commonly known as an adjudicator nominating body. Before accepting the appointment, the prospective adjudicator must satisfy himself that, as a minimum, he has the requisite expertise to decide the dispute, that he has the capacity to take on the appointment and that he has no conflict of interest (Chapter 9).
  7. [2.07] Although the adjudication process commences when the notice of adjudication is served on the responding party, the adjudicator will not have jurisdiction to preside over the dispute until it is referred to him. This is done in a document called the referral notice. It is at that point that the adjudication is ‘live’, and unless the adjudicator resigns, the parties will be locked into the process until the adjudicator communicates his decision. Where the Act applies, it must be served within seven days of the date of receipt of the notice of adjudication. The responding party's defence is contained in a document called the response. The deadline for service of the response will either be dictated by the applicable adjudication rules or more likely by the adjudicator. Should the adjudicator permit it, the referring party will serve a further submission, called the reply, the responding party will respond with the rejoinder and the referring party will respond to that with the sur-rejoinder. The adjudicator may call for a meeting between the parties, a site visit or a telephone conference at any time. The adjudication rules and the Act (where it applies) will prescribe certain powers and duties on the adjudicator. Throughout the adjudication, the adjudicator must ensure that he exercises those powers and duties properly (Chapter 10).
  8. [2.08] The adjudicator's primary objective is to provide the parties with a decision on the dispute referred to him. In statutory adjudication, this must be done within 28 days of the date of receipt of the referral notice, unless the timetable for the adjudication is extended. The decision must be communicated in writing and is usually, but not always, accompanied with an explanation as to how and why the decision was reached. Although there is normally no fixed rule, the adjudicator will usually order that the terms of his decision are complied with in seven or fourteen days (Chapter 11).
  9. [2.09] The parties' liability for the fees of an adjudicator is joint and several, even where the adjudicator resigns, or where the decision is not enforced. Generally, the only circumstances in which a party may not have to pay an adjudicator's fees are where the adjudicator has acted in bad faith, has been fraudulent, or has breached the rules of natural justice or where a party withdraws from an adjudication very early having raised a valid jurisdictional challenge, or where the party is insolvent. The adjudicator will normally have discretion to allocate his fees as he sees fit. The parties' costs are generally borne by themselves unless some other agreement is reached after the notice of adjudication has been served. However, if the adjudication is pecuniary, and the Late Payment of Commercial Debts (Interest) Act 1998 applies, the debtor may be liable for the fees of both parties and those of the adjudicator. Both parties should check the decision meticulously to ensure that there are no typographical or clerical infelicities. If there are, then the adjudicator can correct these and issue a revised decision. Although the general rule is that adjudication decisions should stand alone, parties to a statutory adjudication may in limited circumstances set off an adjudication decision against a cross-claim or counterclaim. The ability to set off in a contractual adjudication depends on the wording of the contract and the terms of the adjudicator's decision (Chapter 12).
  10. [2.10] The losing party to an adjudication sometimes decides that it does not wish to comply with the decision made by the adjudicator because it perceives it has good grounds for doing so. Where the losing party does not comply with the terms of the decision, the winning party must seek to enforce the decision. There are a number of methods available, but by far the most common is to commence a claim in the Technology and Construction Court and make a summary judgment application to enforce the adjudicator's decision (Chapter 13).
  11. [2.11] Even where the court holds that the adjudicator's decision is valid, there are ways in which the paying party can avoid the consequences of that decision, temporarily or permanently. These include where either party is insolvent, near insolvent or in financial difficulty. Where one of these situations exists, the defendant may either avoid summary judgment entirely, or receive an order for a stay of execution, or to put it another way, a suspension of the consequences of the decision. Sometimes, a court may hold that part of an adjudicator's decision is valid and the other part is not. In this case the court may enforce the valid part so that the winning party to an adjudication may derive at least some benefit from the result (Chapter 14).
  12. [2.12] An adjudicator's decision made pursuant to a statutory adjudication is only temporarily binding until it is finally determined by litigation, arbitration or by agreement between the parties. In the vast majority of cases, however, a party will take no further action at all and then, by default, the adjudicator's decision is the one that ultimately determines the dispute (Chapter 15).
  13. [2.13] The adjudicator's jurisdiction refers to the existence and extent of the adjudicator's powers to decide the scope of the dispute legitimately referred to him. An adjudicator's powers are derived from the Act (where the adjudication is statutory) and the procedural rules governing the adjudication. Where the adjudicator does not exercise his powers and duties correctly or does not decide the dispute referred to him, he will have breached the boundaries of his jurisdiction. Similarly, the adjudicator will be found to have no jurisdiction ab initio if he was improperly appointed, either because there are preconditions of referring a dispute to adjudication that were not met or because the appointment of the adjudicator was defective. Ultra vires jurisdiction is one of the two main reasons why an adjudicator's decision may be determined invalid (Chapter 16).
  14. [2.14] The other main reason why a decision may be overturned is because the adjudicator has breached the rules of natural justice. In adjudication, natural justice has two limbs: bias and procedural fairness. Bias has been described as an attitude of mind, which prevents the decision-maker from making an objective determination of the issues to be resolved. Where an adjudicator is shown to have a bias towards either party, then his decision will be a nullity. Procedural fairness - or the right to a fair hearing as it is sometimes known – is relevant to the way in which the adjudication is conducted. In essence, where the adjudicator does not conduct the proceedings in a way that allows both parties the opportunity to put forward their own case and respond to the other, he will be found to have breached the rules of natural justice and the decision will not be enforced (Chapter 17).
  15. [2.15] There are other, less putative, reasons why an adjudicator's decision may not be enforced. The maxim ‘fraud unravels all’ applies equally to the enforcement of adjudication proceedings as to litigation or arbitration. The defence of duress is another reason why the court may decline to enforce an adjudicator's award. The Unfair Terms in Consumer Contracts Regulations 1999 applies when a company wishes to contract with a consumer. The legislation bestows certain protections on the consumer which need to be adhered to in the event such parties wish to incorporate adjudication provisions into the contract. If they are not adhered to, the adjudication provisions will be struck out. Finally, a failure to comply with the Human Rights Act 1998 may lead to an adjudicator's decision not being enforced (Chapter 18).