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Instincts could lead you astray in the jungle of adjudication

legal matters

A recent clutch of adjudication cases demonstrates that it is a procedural jungle out there, teeming with traps for the unwary.

Furthermore, you can no longer trust your instincts in response to an adjudication problem. Instead, you have to pick your way through the forest of decided cases and map out a path between those factors that may influence the courts to support an adjudicator's decision and those that may not.

And the forest is sprouting at an alarming rate.

A useful website - www. adjudication. co. uk - now lists nearly 100 cases on adjudication decided since Macob v Morrison in 1999.

In the case of RJT Consulting Engineers Limited v DM Engineering (NI) Ltd (Judgment 8.3.02/AJ 30.5.02), the Court of Appeal held that for a contract to be a contract in writing as required by the Housing Grants Construction and Regeneration Act (HGCRA), all of its terms, or at least all of the terms relied upon by the referring party, should be recorded in writing.

When giving their decision, the Court of Appeal did not consider the case of Total M and E Services Ltd v ABB Building Technologies Limited Ltd (Judgment 26.2.02), in which the same point was taken a stage further. The defendant argued that because the construction contract was required to be in writing, it could not be varied orally: any variation had to be in writing. In that case, the contract defined the original works but contained no mechanism for additional work or variations.

The defendants maintained that oral variations prevented the contract from being a contract in writing, which in turn excluded the adjudication provisions of the HGCRA.The judge disagreed and found instead that the adjudicator's decision was based on a single written contract as varied orally by the parties. Your instincts may support this as the common-sense approach. On the face of it though, the Court of Appeal in RJT Consulting has a different view.

In the Total M and E Services case, the judge also decided that the fact that the claimants had started the adjudication in the name of 'Total Mechanical and Electrical Services Limited' did not preclude them from reaping the benefit of the adjudicator's decision. This, despite the fact that Total M and E Services was a different company from Total Mechanical and Electrical Services, registered at a different time with different directors.

The judge decided that as the parties were aware all along of the true identities of the contracting parties, no one had been misled.

Instinctively, a mere typographical slip ought not to deny a claimant justice, but if it is to apply to all wrongly named parties, this decision may raise more problems than it solves.

If the decision is given in favour of the wrong party, can it be enforced by the right party? If not, against whom should the losing party commence subsequent arbitration or litigation proceedings? Against the right party with whom they have a contract? Or the wrong party who has the benefit of the adjudicator's decision? Is an adjudicator entitled to rectify the referral notice and to change the name of the referring party if it is discovered that the adjudication has been started in the name of the wrong party? Certainly in court proceedings, substituting parties after the start of the action is not straightforward, but then should the same rules apply to adjudication?

Your instincts may tell you that there is no analogy between court proceedings and adjudication. In RG Carter Ltd v Edmund Nuttall Ltd (judgment 18.4.02), the judge found that for an adjudicator to determine a dispute without a referral notice is much like a judge saying that he is going to try an action having only received what used to be called a writ, with no statement of claim or defence. In fact, he held, until the referral notice has been served, the adjudicator has no obligations and no jurisdiction. Like I say, it's a jungle out there. Don't rely on your instincts to guide you.

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