Trends suggest fast-moving courts can undercut adjudication
Adjudication has been around for a bit now and the number of cases that have reached the courts has exceeded the 20 mark. Is it now possible to stand back and detect a few trends?
Despite the body of case law that has grown during the past year or so, it is probably too early to distil anything useful from the decided cases for a number of reasons:
There are any number of different contracts available to the parties and a wide variety of adjudication schemes. Every case involves a different combination of facts and contracts.
Although most of the cases are heard by the Technology and Construction Court (TCC) judges, some are not. Even within the TCC, individual judges adopt their own approach and procedures. It is not easy to detect trends.
New cases are reaching the courts at an alarming rate. Conventional law reporting systems are unable to keep up.
The biggest obstacle to drawing any worthwhile conclusions from the existing material is that no adjudication case has yet been considered by the Court of Appeal. This will soon be remedied. A small clutch of first-instance decisions, including Bouygues UK Ltd v Dahl-Jensen UK , is to be heard by the appellate court before the end of the summer. The Bouygues case, you will remember, is the one where the adjudicator made an obvious mistake with his arithmetic which resulted in the wrong party being successful. Justice Dyson decided that the courts should enforce adjudicators' decisions even if obviously wrong.
That this might cause injustice was plain hard luck. Until reviewed by the Court of Appeal there remains a question mark over the approach the TCC has adopted.
Leaving all this aside, I suggest the following propositions from the cases decided to date:
The courts are keen to enforce adjudicators' decisions. They will do so by way of summary judgment and will even shorten the timetable for applying for judgment, as they did in the Macob and Outwing cases.
The decision, even if it is obviously wrong, can only be reconsidered in arbitration or after full-scale litigation.
Even counterclaims are frowned upon as a means of defeating an adjudicators' award. In cases such as VHE Construction v RBSTB Trust and Northern Developments v J& J Nichol, the courts held that there could be no set-off against an adjudicator's decision unless the necessary withholding notices had been served.
However, without jurisdiction an adjudicator is powerless to deliver a binding award. Jurisdictional challenges have therefore become fertile ground for avoiding enforcement. In cases such as Lathom Construction Ltd v Moss, the court has refused to give summary judgment where there has been an arguable issue on jurisdiction.
Up to this time the popular method of challenging jurisdiction has been for the defendant to reserve their position and then sit tight, using the jurisdictional challenge later as a defence against enforcement. But a more pro-active approach was spelt out in Fastrack Contractors Ltd v Morrison Construction Ltd in which H H J Thornton QC invited defendants to go to court at the outset to seek a declaration that the adjudicator lacked jurisdiction, emphasising that the TCC can 'resolve questions of that kind within days of them being referred to it'. Such a declaration would effectively bring an adjudication to its knees.
There would be no point in a claimant proceeding when the court had already declared the adjudicator had no jurisdiction. An alternative option of seeking an injunction to restrain an invalid adjudication was explored, but rejected, inWorkplace Technologies plc v E Squared Ltd .
A party looking to delay by raising an arguable jurisdiction point should note that the TCC, as may be surmised from its invitation in Fastrack , is not overburdened with work. This, combined with its enthusiasm for adjudication, means any delay might be minimal. In the case of Atlas Ceiling and Partition Co Ltd v Crowngate Estates Ltd there was an arguable jurisdiction issue which needed a trial with witness evidence. Demonstrating a remarkable turn of speed, the court said it would be able to accommodate a trial the next day. Whoever said the wheels of justice turn slowly?