The number of official referees (High Court judges who deal exclusively with construction disputes) may increase, following a landmark legal decision affecting the power of the courts to review architects' certificates. The House of Lords' decision in Beaufort Developments v Gilbert Ash NI Ltd and others overturns a decision by the Court of Appeal 14 years ago, in Northern Regional Health Authority v Derek Crouch Construction, that an architect's certificate could not be reviewed by the courts because it was binding on both parties under the relevant contract.
Attempts to avoid the implications of this decision have been pursued but with little success, commented Lewis Cohen of Nabarro Nathanson. But now the Lords has restored the previous legal position, giving courts the power to act as an arbitrator in examining a certificate. However, the position will be complicated by provisions of the Arbitration Act 1996, and parties to a contract will have to think carefully whether arbitration clauses are included.
'One of the major reasons behind the Court of Appeal's reasoning in Crouch was that the official referees' workload was becoming unmanageable,' said Cohen. 'It may be that a combination of Beaufort and the Arbitration Act 1996 will conspire to increase the or lists again.'