DEFINITION of 'Adjudication'

Adjudication is a legal term that refers to the process of hearing and settling a case. It usually represents the final judgment or pronouncement in a case that determines the required course of action in reference to the issue presented. Adjudication can also refer to the process of validating an insurance claim as well as a decree in the bankruptcy process between the defendant and the creditors.

BREAKING DOWN 'Adjudication'

Adjudication describes the legal process that helps expedite and deliver a court's resolution regarding an issue between two parties. The result of the process is a judgment and court opinion that is legally binding. Most adjudication hearings center around disputes that involve money or nonviolent infractions, and result in the distribution of rights and obligations for all parties involved.

This type of legal process is different from other justice-seeking or evidence-based court cases. It is instead used to finalize disputes between two private parties, disputes that may arise between political officials and a private party, or disputes that occur with public bodies and public officials. In the health care industry, for example, it can be used to determine a carrier's liability for monetary claims submitted by an insured person.

The Adjudication Process

The process is governed by formal rules of evidence and procedure, where the initiating party, or trier, gives a notice establishing the facts in controversy and defines any applicable laws. The notice also sometimes outlines the nature of the dispute between the two parties, and gives a detailed account of where and when the dispute occurred and the desired result based on law. However, there are no specific requirements regarding the notice of adjudication.

An adjudicator is then appointed and a notice is sent to the defending party. The defending, or responding, party submits a defense to the claim of adjudication. Both parties are given a chance to present their arguments at a hearing. The adjudicator takes both sides into account and makes a final decision.

The Claim Adjudication Process

The process is different in the medical or insurance industries, both of which use claim adjudication. In these industries, all claims are checked for errors and omissions at the point of processing. Claims that are rejected at this step can be resubmitted after the required changes are made. Claims that make it past processing are automatically reviewed and checked in more detail. If necessary, a claim can then be manually reviewed by medical examiners or insurance personnel. Records can be requested to verify the claim. If a medical or insurance claim makes it through this entire claim adjudication process as verified, payment is submitted. The payment can range from partial to full.