OUT OF TIME
We all know that construction adjudicators are required to give their decision within 28 days, writes Kim Franklin. But what if they don't? This is not an idle, jurisprudential musing.
Disputing parties invest considerable time, energy, and, let's face it, money into obtaining an adjudicator's decision. If it is provided late, they need to know whether to rush to uphold it, or throw it straight in the bin.
Adjudicators, particularly those grounded in the practices of arbitration, may want to hold on to their decision until they are paid. Can they do that, if the delay pushes them beyond the time limit?
These questions were recently explored in Epping Electrical Co v Briggs and Forrester Plumbing (Judgment 19.01.07).
A dispute arose between Briggs, M&E contractor for a residential development in Westminster, and Epping, its electrical subcontractor. The adjudicator was required to reach a decision by 1 November 2006. The parties agreed to extend time to 14 and then 21 November. At 4:43pm on 21 November, the adjudicator told the parties that the decision was complete and would be released 'immediately upon full payment of the enclosed invoice'. Epping and Briggs put aside their differences in the face of what they saw as a moving of the goal posts. The adjudicator's engagement did not provide for payment as a condition of releasing the decision. The time frame was unreasonable.
Adjudication may be all about 'pay now, argue later', but in the case of the adjudicator it should be 'decide now, get paid later'.
The adjudicator relented and sent his decision, which required Briggs to pay Epping £372,000, at 8:08am on 23 November. Was it valid?
This was not the first time that the courts have been troubled by this question.
Earlier cases distinguished between the time when the decision was finalised and subsequent delays experienced in communicating it to the parties. Famously, in one case, a high-profile adjudicator concluded his decision in time, but, despite the array of communication methods now available to the modern adjudicator, sent it via the Document Exchange private mail network. It arrived one day too late. In such cases, the judges were minded to excuse delays of a day or two.
Since then, however, there has been a call for a general sharpening-up of the adjudicator's act. The Court of Appeal in Scotland pointed out that the objective of a speedy outcome is best achieved by adherence to strict time limits. Certainty, they said, is not achieved by leaving parties in doubt about where they stand after time has run out.
The TCC judge in the Epping case agreed with these sentiments. He held that the parties had only agreed to extend time on the condition that the decision was issued by 21 November. As the adjudicator had failed to do so, the decision was not valid.
Adjudicators beware: be clear about your payment terms before you start on the case. Parties: make sure you stipulate the consequences of any delay when agreeing to extend the timetable.
Kim Franklin is a barrister and chartered arbitrator at Crown Office Chambers in London. Visit www.crownofficechambers. com