Red apple on a background of green apples

Adjudication is one of a number of measures intended to assist parties to a construction contract to resolve their disputes quickly. A recent decision[1] considered whether an adjudicator was entitled to consider more than one adjudication referred to him at the same time, albeit under separate notices.

In the application to enforce both of the adjudicator’s decisions, the Court enforced one decision, but refused to enforce the other decision, finding that the same adjudicator could not adjudicate on more than one dispute at the same time without the parties’ consent (under paragraph 8(1) of Part I of the Scheme[2]).

Beck managed to resist enforcement of the adjudicator’s decision in respect of the second adjudication because he did not have the consent of the parties in respect of that subsequent adjudication under the same contract.

It is the first time the Court has provided guidance on a wider interpretation of Paragraph 8(1).

Previously, the emphasis has been on the number of disputes that may be referred in a single adjudication rather than the number of disputes that may be referred to adjudication at the same time or on whether those disputes could be referred to the same adjudicator. Following this judgment, the practice of referring separate disputes to the same adjudicator at the same time under separate notice will have to stop, unless the parties have consented.

In the judgement, the Court also warned parties about the number of documents filed for “a relatively simple enforcement dispute”, stating that it considered six lever arch files of documents to be excessive, particularly in circumstances where four of those files were not even referred to.

The Court noted that it was rare in adjudication enforcement proceedings for more than one lever arch file of documents to be needed and, if parties and their solicitors continue to fail to “cooperate properly and comply with the TCC Guide”, the court will simply refuse to hear cases with “promiscuous and unnecessary bundling”.

Multiple simultaneous adjudications are increasingly common as they can give the referring party an important tactical advantage. The referring party may decide to commence a series of adjudications to hamper the respondent’s ability to deal with each adjudication effectively given the tight timeframes in which it is required to respond.

Going forward, referring parties need to be mindful that, where adjudications are governed by the Scheme and more than one adjudication will be running at the same time, the consent of the respondent must be obtained before the same adjudicator is appointed in a subsequent adjudication. A failure to obtain the respondent’s consent could render the adjudicator’s decision unenforceable.

If the respondent refuses to consent then the referring party must wait until any current adjudication has finished, or make clear on the application form to the adjudicator nominating body that a different adjudicator must be appointed to the one deciding the current adjudication.

Adjudicator nominating bodies and adjudicators will also need to be mindful of the issues raised and review their nomination and appointment procedures in light of this significant decision.

This post was edited by Amira Khan. For more information, email blogs@gateleyuk.com.

[1] Deluxe Art & Theme Limited v Beck Interiors Limited [2016] EWHC 238 (TCC)

[2] The Scheme for Construction Contracts (England and Wales) Regulations 1998 (Amendment) (England) Regulations 2011

 


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This blog is intended only as a synopsis of certain recent developments. If any matter referred to in this blog is sought to be relied upon, further advice should be obtained.