Adjudication — a final result of the legal dispute. Adjudication is delivered during the process of the juridical dispute as a final judgment. The goal of adjudication is to resolve the discord between two parties and indicate further steps.
The adjudication is necessary for different types of claims, but mostly it is related with:
- internal payments;
- problems and delays on the milestones of work;
- extension or completion of working process;
- final settlement of accounts.
Difference between arbitration and Adjudication
Sometimes the process of adjudication is confused with arbitration. However, there are several crucial differences between procedures.
Adjudication should be delivered in the legal court according to the predetermined procedure. The parties present their case before the appointed officials which consider different factors, weigh the arguments and take the decision in favor of one party. The final decision is determined by the current legislation. If the losing party is unable to fulfill it, he or she will be fined or imprisoned. The whole process of adjudication may take quite a long time because the work of the court submits to the schedule of official holidays.
Arbitration is carried out by the independent arbiter. Like in the previous case, they describe the situation and present their arguments. Finally, the arbiter concludes in favor of one or another party or offers another solution. Then parties include in the contract a clause that they have agreed with the decision of arbitrage and include the phrase “binding arbitration”. As for the duration of the process, the arbitration passes much faster.
Usually, companies choose between adjudication and arbitration based on financial factors. The process of adjudication may be quite demanding because it requires the payment of litigation costs or advocacy. As for the arbitration, the cost for this procedure is lower, because the complainant should pay only for the case presentation.
Process of Adjudication
- Notice of Adjudication. The person who plans to initiate the adjudication process draws up a relevant notice and sends it to the contractor with whom the party wants to have a dispute. The notice of adjudication should include several points such as a date of the notice, description of the claim, place of a future dispute, and a result that is sought.
- Appointment of an adjudicator. The adjudicator should be at least within a week from the moment of receiving notice. A person appointed to act as an adjudicator should have a document that confirms the relevant juridical specialization. When the adjudicator is selected, he should notify the party about this fact within five working days.
- Adjudication claim. The claimant should draw up an adjudication claim and send this document to the adjudicator within five working days. In this document, the claimant describes the case and presents the evidence. The adjudication claim should be consistent, cogent, and accurate. Also, the claimant should attach the necessary documents.
- Responding to Adjudication claim. A respondent may send a response to the adjudication claim. In this claim, the respondent presents a proper view of the situation and attaches the relevant documents. As for the claimant, he may send the counterclaim as a response to the presented documents. The stage where the parties exchange the adjudication claims may be quite long.
- Adjudicator’s decision. The adjudicator examines all documents and finds in favor of one or another participant. Then, the adjudicator determines which party is liable to pay and the amount of the payment. The services of adjudication are usually to be paid within two or three working days. For the non-monetary claims, the adjudication process determines the rights and obligations of the parties.