Alternative Dispute Resolution (ADR) in Construction: What It Means and Why It Matters

Disputes in construction aren’t new.
Before the 1990s, if two parties fell out over delays, payments, design changes or anything really that could be discussed and agreed, there were only two real options — go to court or head into arbitration.

Both were expensive, time-consuming, and adversarial. Projects stalled. Cash flow dried up. Relationships broke down.

That all changed with the Latham Report (1994) and the Housing Grants, Construction and Regeneration Act 1996 — the moment Alternative Dispute Resolution (ADR) became part of the construction landscape.

ADR introduced faster, fairer ways to resolve disagreements, aiming to keep sites moving and preserve relationships. Today, it’s a vital part of how the UK construction industry functions.

What Is Alternative Dispute Resolution (ADR) in Construction?

ADR refers to any method of resolving disputes without going to court. It includes several different processes — each with its own advantages, level of formality, and outcome.

The most common forms are: Negotiation, Adjudication, Mediation, Arbitration, Expert Determination, Early Neutral Evaluation (ENE), and Dispute Boards.

No matter which path is chosen, the goal is always the same: settle issues quickly, protect relationships, and keep projects progressing.

Why ADR Exists

ADR was born out of necessity. Construction projects are complex and involve many moving parts — contracts, variations, and payments that don’t always align.

Litigation simply took too long. ADR changed that by focusing on:

• Speed — weeks, not years.

• Cash flow — “pay now, argue later.”

• Relationships — resolution without blame.

It’s now a legal right in the UK. Under the Construction Act, parties can refer disputes to adjudication at any time — and the adjudicator’s decision is enforceable immediately.

Types of ADR in Construction

Negotiation
The simplest and most flexible form of dispute resolution. It involves structured discussions between parties, often led by project managers or commercial teams. It’s quick, inexpensive, and relationship-friendly — ideal for resolving smaller disagreements before they escalate.

Adjudication
Introduced by the Construction Act, adjudication delivers a binding decision within 28 days. It’s typically used for payment and valuation disputes, allowing cash to flow while parties continue working. Decisions can be enforced through the Technology and Construction Court, even if challenged later.

Mediation
A collaborative, confidential process where a neutral mediator helps both sides find common ground. The outcome isn’t binding until signed, but mediation often achieves settlements that litigation never could.

Arbitration
A formal but private process under the Arbitration Act 1996, where a chosen arbitrator (usually an industry expert) makes a final, binding decision. It’s suited to complex or high-value cases where privacy and specialist knowledge matter.

Expert Determination
Used for narrow technical or valuation issues. The parties appoint an independent expert to decide. The result is often contractually binding, so clarity in scope and evidence is key.

Early Neutral Evaluation (ENE)
A senior neutral (often a retired judge) gives an informal, non-binding opinion. It’s a helpful “reality check” that can steer negotiations before things escalate.

Dispute Boards
More common in major infrastructure projects. A standing panel follows progress and intervenes early when issues arise — preventing disputes from reaching crisis point.

How to Choose the Right ADR Method

Goal	Recommended ADR Route
Need quick decision or cash flow	Adjudication
Relationship is key	Mediation or Negotiation
Technical question	Expert Determination
Want finality and privacy	Arbitration
Ongoing major project	Dispute Board

The golden rule: pick the process that fits the problem.

Making ADR Work

To get the most from ADR:

• Know your contract — understand clauses, notice periods, and dispute procedures.

• Build the record early — keep programmes, site diaries, and valuations up to date.

• Define the question clearly — focused disputes are easier to resolve.

• Quantify the claim — link cause, effect, and cost.

• Choose competent experts — clear, credible evidence is critical.

ADR isn’t just about winning — it’s about keeping the project alive.

Final Thoughts

ADR keeps construction moving.
It turns confrontation into conversation, delays into decisions, and arguments into progress.

For advice on managing disputes or structuring contracts to avoid them, speak to Harrison Clarke Chartered Building Surveyors — specialists in practical, early-stage guidance that keeps projects on track.

For more expert advice on surveying and property matters, check out our range of informative videos on our website or YouTube channel. Harrison Clarke Chartered Surveyors is here to guide you every step of the way!

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About the author

David Wallbridge, BSc (Hons) Grad Dip MFPWS MRICS

Associate Director

David started his career in 2007 working his sandwich placement at Rund Partnership Limited while completing his post graduate course in Building Surveying. David continued his career with Rund as a building surveyor, specialising in project management, focusing on delivering social housing. Becoming chartered in 2015, David opened his own building surveying practice and became a director of Talisman Homes, his family run business, where he applied valuable management and technical skills to private residential property development.

After running his own company for 7 years where he served a variety of different clients, David made the decision to move back into more traditional employment, spending a year with large national multi-disciplinary practice Ridge and Partners LLP, before starting at Harrison Clarke in 2023