Each NEC form of contract requires that the party notifying a dispute refers it to an Adjudicator for a decision. The decision is binding on the parties unless and until it may be changed by subsequent reference to the tribunal (arbitration or litigation as selected by the Parties in the Contract Data) and is final and binding if a party does not notify the other party of his intention to refer the matter to the tribunal within 4 weeks of the Adjudicator's decision. Such reference to the tribunal is not permitted if the matter has not first been referred to the Adjudicator.
The adjudication procedure in the NEC3 family of contracts is included either in Section 9 of the Core Clauses or under Option W1 (Dispute Resolution). (Option W2 is only applicable in the UK). The Adjudicator has jurisdiction from the NEC3 Adjudicator's Contract entered between him and both of the parties and has duties arising from a combination of that contract and the contract between the parties from which the dispute referred to him has arisen.
Resolution of a dispute by adjudication is mandatory in all NEC3 contracts. There are strict time bars for the notification of a dispute and implementation of the adjudication process which, if not observed, would not only deny the Parties their rights to adjudication, but also to any possible further reference to either arbitration or litigation. The Adjudicator’s fees, based on an agreed hourly rate, and expenses are shared equally between the parties irrespective of the outcome.