When construction projects go wrong, the fallout can be messy, expensive and relationship-destroying. But what actually happens when builders, clients and contractors can’t agree on who owes what?
A study by Ulster University Quantity Surveyor Graduate Jonny Fullerton examines Northern Ireland’s adjudication process – the go-to method for resolving construction payment disputes (Adjudication is the most widely used Alternative Dispute Resolution (ADR) method worldwide with much research examining trends, successes, and drawbacks).
A review of existing literature identified a gap with data specific to the NI construction industry.
The aim of this study was to establish what the trends of adjudication are within NI, and the results reveal both promising trends and concerning weaknesses.
What Sparks Construction Disputes
The research surveyed 120 industry professionals and found a predictable trio of causes behind most disputes:
- Clients changing their minds mid-project
- Inaccurate design information
- Poor contract administration
These findings align with decades of industry complaints, suggesting that while technology has transformed construction methods, the fundamental human and communication failures remain stubbornly persistent.
The Money Question: High-Stakes Decisions
The typical adjudication case in Northern Ireland involves claims between £125,000 and £500,000 – serious money that can make or break smaller contractors. However, parties are strategic about when to trigger the adjudication process, avoiding it for smaller disputes while also hesitating to use it for the largest claims where the stakes become astronomical.
Trust, But Verify: The Fairness Factor
An overwhelming 86% of respondents don’t suspect adjudicators of bias – a remarkable vote of confidence in the system’s integrity. The 14% who did cite concerns pointed to personal relationships between adjudicators and parties, rather than systematic corruption.
Yet paradoxically, 54% believe parties “sometimes” abuse the adjudication process to gain unfair advantage. This suggests the system itself is trusted, but the people using it aren’t always playing fair.
The Cost Reality: Cheaper Than Expected
One surprising finding challenges industry assumptions about costs. While existing research suggests adjudication fees typically run high, Northern Ireland respondents reported fees between £10,000-£12,000, roughly 61% lower than studies elsewhere suggest. This could signal either more competitive pricing in the local market or possibly a more streamlined approach to dispute resolution.
The study also found little correlation between the length of the 28-day adjudication period and costs incurred, suggesting that speed isn’t necessarily the primary driver of efficiency.
The Technology Gap: Slow Digital Adoption
Despite the construction industry’s growing embrace of digital tools, adjudicators appear surprisingly resistant to technological solutions. Respondents reported reluctance from adjudicators to work with electronic document bundles or leverage technology for cost savings – a potentially costly oversight in an increasingly digital world.
The Bottom Line: Effective but Flawed
The research paints adjudication as a generally effective dispute resolution mechanism that serves its intended purpose. Most parties express satisfaction with outcomes, and the process handles a diverse range of disputes as designed. However, the system shows clear signs of strain from increasing case complexity and potential abuse by strategic players.
The study’s key recommendation?
The adjudication framework needs updating to prevent abuse while maintaining its accessibility and fairness. As construction projects grow more complex and stakes continue to rise, the dispute resolution system must evolve to match.
For an industry built on relationships and trust, these findings suggest that while the formal mechanisms work reasonably well, the informal human elements – communication, honesty, and good faith – remain the weak links that money and process alone cannot fix.