RICS Summary Adjudication Procedure

"Smash and grab" adjudications are one of the most common ways a contractor can seek to recover outstanding debts under a construction contract.

Small to medium-sized contractors can often face difficulties, however, when the value of the unpaid debt is below £20,000.

Whilst adjudications are a quick, cost-effective process for the recovery of outstanding sums in comparison to court proceedings, each party is still liable to pay their own legal fees as adjudications are cost-neutral.

In addition, both parties are jointly and severally liable to pay the adjudicator's fees, and the adjudicator is free to determine which party should be responsible for them.

However, in most cases, the losing party is liable to pay the adjudicator's fees in full.

The effect of this is that the costs of pursuing a debt below £20,000 may well become disproportionate.

In an attempt to circumvent this issue and as a direct response to the economic effect of COVID-19 on the construction industry, in spring 2020, RICS launched a summary adjudication service to deal with disputes below £20,000.

The key differences between the RICS summary adjudication service, RICS low-value dispute (LVD) adjudication service and RICS construction adjudication service are set out in the following table:

Further information regarding each service can be found on the RICS website at: Adjudication Services (rics.org).

It is worth noting that the summary adjudication procedure is only available to those parties who have selected RICS to be the adjudicator nominating body, and the above time periods and adjudicator's fees are subject to change via agreement between the parties and the adjudicator.

The key and most beneficial differences between the summary adjudication service and the LVD adjudication service are that the adjudicator's fees are capped at £1,000 plus VAT and that the adjudicator's decision is delivered within 14 days of receipt of the referral notice from the referring party.

This means that the dispute can be drawn to a swift close without the parties having to incur significant legal fees.

The fact that the adjudicator's fees are capped at £1,000 plus VAT also lowers the financial risk on the referring party in the event that they lose.

For more information about adjudications generally, see our blog post: Don't hang about, Adjudicate!