Resolving a builder dispute: mediation, ADR and court

A dispute with a builder can end in several ways: the builder puts the work right or pays, the two sides settle, or a court decides. This guide explains how each route works.

Complaint first

The usual starting point is a written complaint saying what is wrong and what is wanted. Since 6 April 2026, section 308 of the Digital Markets, Competition and Consumers Act 2024 has required a trader who gives a consumer the outcome of a complaint to tell them about any alternative dispute resolution (ADR) or other arrangement the trader is obliged to take part in.

The letter before claim

The Practice Direction on Pre-Action Conduct sets out what the court expects before a claim is issued where no specific protocol applies. Under paragraph 6, the claimant's letter should give the basis of the claim, a summary of the facts, what is wanted and, if that is money, how it is calculated. The defendant should reply within a reasonable time: 14 days in a straightforward case and no more than three months in a very complex one.

The Pre-Action Protocol for Construction and Engineering Disputes says it applies to all construction and engineering disputes. It asks for a letter of claim, an acknowledgment within 14 days, a response within 28 days and, normally, a meeting. In many cases, including those of modest value, it says the letter and response can be simple.

A failure to follow these steps can be reflected in the court's orders about costs: see what the court expects before you sue. None of them stops the limitation period: see time limits in builder disputes.

What the court expects on ADR

The Practice Direction says litigation should be a last resort. Paragraph 11 warns that a party's silence in response to an invitation to take part in ADR, or a refusal to take part, might be considered unreasonable and could lead to an order to pay additional costs.

In Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416, the Court of Appeal held that a court can lawfully stay (pause) proceedings for, or order, the parties to engage in a non-court-based dispute resolution process. The order must not impair the very essence of the claimant's right to proceed to a judicial hearing, and must be proportionate to the legitimate aim of settling the dispute fairly, quickly and at reasonable cost.

The Civil Procedure Rules now give the court power to order the parties to engage in ADR (rule 3.1(2)(o)). When deciding costs, it considers whether a party failed to comply with such an order or unreasonably failed to engage in ADR (rule 44.2(5)(e)).

Trade association and scheme-based dispute resolution

Some builders belong to a trade association or a government-endorsed quality scheme, which may offer a complaints procedure, conciliation, mediation, an ombudsman or arbitration. Whether any of that is available depends on whether the builder was a member at the relevant time and on the scheme's rules, which also decide what work is covered, any deadline for referring a dispute, and whether the outcome is binding.

Since 6 April 2026 the 2024 Act has also required providers of ADR in consumer contract disputes to be accredited or exempt, or to act under arrangements made by a provider that is (section 293), with a transitional period running to 7 January 2027 at the latest, or earlier for a provider whose accreditation application is decided before then (the position at the time of writing, October 2026).

Mediation

In mediation an impartial third party helps both sides work out an agreement. The mediator does not decide who is right, so there is an outcome only if both agree. It is confidential. The government's guidance on court mediation says an agreement reached at the appointment is legally binding, and that what happened there cannot be mentioned in court.

Adjudication

Adjudication produces a quick decision that binds the parties until the dispute is finally determined by a court, by arbitration or by agreement. Section 108 of the Housing Grants, Construction and Regeneration Act 1996 gives a party to a construction contract the right to refer a dispute to adjudication, with a decision required within 28 days of referral unless that period is extended.

That right does not extend to most homeowners. Under section 106, this part of the Act does not apply to a construction contract with a residential occupier: a contract which principally relates to operations on a dwelling that one of the parties occupies, or intends to occupy, as their residence.

The parties remain free to agree to adjudication, in the contract or after a dispute has arisen.

Court: which track

Under rule 26.9, at the time of writing (October 2026), the normal track for a defended claim depends mainly on value:

Value is not the only factor (rule 26.13).

Mediation in small claims. Under a pilot in Practice Direction 51ZE, running to 6 April 2027, a small claim in which the only remedy claimed is a specified sum of money is referred automatically to the Small Claims Mediation Service once directions questionnaires are filed. The appointment is free, by telephone, and lasts up to one hour. If the claim reaches a final hearing, the court must consider whether any sanction is appropriate, having regard to whether the parties attended.

Costs. On the small claims track, rule 27.14 bars the court from ordering one party to pay another's costs except for a short list that includes court fees, the fixed costs of issuing, capped sums for an expert's fees and loss of earnings, and further costs against a party who has behaved unreasonably. On the fast and intermediate tracks, the only costs allowed are the fixed amounts in tables in Practice Direction 45, plus specified disbursements (rules 45.44 and 45.50). On the multi-track, the general rule is that the unsuccessful party pays the successful party's costs (rule 44.2), in an amount assessed by the court. See court tracks and recoverable costs.

Part 36 offers

A Part 36 offer is a formal offer to settle under Part 36 of the Civil Procedure Rules. Either side can make one at any time, including before proceedings start. Among other things, rule 36.5 requires it to be in writing, to make clear that it is made pursuant to Part 36, and to specify a period of not less than 21 days (the relevant period).

Its force lies in what follows if the case goes to judgment (rule 36.17):

• If the claimant fails to obtain a judgment more advantageous than the defendant's offer, the defendant is entitled to costs from the end of the relevant period, with interest.
• If the claimant does at least as well as the claimant's own offer, the claimant is entitled to enhanced interest, an additional amount and more generous costs (an uplift, where fixed costs apply: rule 36.24).

The court must make these orders unless it considers it unjust to do so.

Part 36 does not apply to small claims (rule 27.2). An offer made in another way does not carry these consequences, but the court can take it into account on costs if it is admissible (rule 44.2(4)(c)).

What a solicitor will want from you

• The contract, quote or terms, including any clause about adjudication or arbitration.
• Whether the builder belongs to a trade association or quality scheme.
• Your written complaint, the builder's response, and any letter of claim and reply.
• Every proposal to mediate or use other ADR, and any offers to settle, with dates and replies.
• How the claim is valued, with supporting quotes and reports. See evidence in a builder dispute.
• Whether you live in, or intend to live in, the property.

Run the free case check

This guide is general information about the law of England and Wales. It is not legal advice. Which route is open in a particular dispute depends on the contract, the value of the claim and the facts, and time limits continue to run while a dispute is being discussed.