Adjudication under the Housing Grants Act did not exactly come crashing onto the collective consciousness of the construction industry back in 1996.One of the main reasons for this was the year-and-a-half delay between drafting the relevant provisions of the Act and the finalisation of the government's scheme, which itself was required to plug the many gaps left by the legislation. As a result, a few construction commentators were very exercised about the embryonic process, while the rest of the world remained in blissful ignorance. Once the Act and the scheme had finally heaved themselves onto the statute books in 1998, such disputing parties as were brave enough to give adjudication a go were much preoccupied by the big question at the time: namely, what happens if the losing party refuses to abide by the decision?
It is hard to remember, looking back now, that the legislature thought that it had answered this one, by giving the winning party the right to enforce the decision via some tortuous route that involved provisions borrowed from the Arbitration Act. The courts, however, made short work of the point with the first contested enforcement of an adjudicator's decision in Macob v Morrison (1999), in which it was decided that an adjudicator's decision should and would be enforced by summary judgment.
Another question that came up from time to time was: 'What happens if the adjudicator does not give their decision within the statutory 28 days?' This was not such a pressing problem in practical terms for two reasons.
First, in the beginning adjudicators were so thrilled with the process, and the rich vein of work it provided, that they diligently produced their decisions within the stipulated time.
Second, once the novelty had begun to wear off, they realised that most disputing parties would agree to extend the timetable if they perceived that they might thereby curry favour with the adjudicator and improve their prospects of obtaining a favourable decision. Many adjudications are conducted over periods longer than 28 days - the longest to my knowledge being well over 100 days. But practical considerations apart, is an adjudicator's decision given outside the required or agreed period still valid?
Five and a half years after the advent of adjudication, the courts have finally had cause to decide the point in Simons Construction v Aardvark Developments (Judgment, 29.10.03). In this case, contractors and employer referred their dispute to an adjudicator, who was engaged under the terms of the JCT adjudication agreement. The parties had agreed to extend the timetable for the adjudicator to decide the dispute beyond the required 28 days.
The adjudicator gave a decision, in draft, in favour of the employer on the last day of the agreed period. It also required the unsuccessful contractor to pay the adjudicator's fees. The draft decision was issued, without amendment, in final form a week later. The contractor declined to comply with the decision or to pay the adjudicator's fees. It argued that it was invalid because it had been given outside the agreed time limit. Both the employer and the adjudicator were interested in upholding the decision and applied to the court accordingly.
Technology and Construction Court Judge Seymour QC agreed that the draft decision was only a provisional decision in respect of the matters referred. It was not signed or dated and was clearly marked as being 'for the parties' comment'. A final decision had not, therefore, been produced in time. This, however, did not mean that the decision, produced a week later, was not binding on the parties. Neither the Housing Grants Act nor the scheme prescribe a final, long-stop date, by which a decision should be given, once the parties had agreed to an extended timetable.
An adjudicator's decision, whenever given, is binding on the parties unless the adjudicator's engagement under the adjudication agreement had been terminated for failure to produce a decision in time. It is unlikely, however, that either party would rush to sack the adjudicator for being out of time, as they would thereby guarantee that they would not receive a decision in their favour.