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Adjudication Matters December 2015: Festive Edition – Part 2

Welcome to Part 2 of the festive edition of Adjudication Matters

Below are the correct answers from our Christmas Quiz.

1. The slip rule under the Scheme for Construction Contract 1998 allows an adjudicator to correct a typographical or numerical error in his decision. Within how many days from the date of delivery of his decision to the parties can the correction be made?

The adjudicator can correct an error in his decision within 5 days of the date of delivery of his decision to the parties: Paragraph 22A(2) of the Scheme for Construction Contracts 1998.

2. The parties may agree who will pay each other’s legal costs of an adjudication before the notice of adjudication has been served. True or false?

False. An agreement as to who will pay each other’s legal costs will only be valid if it is made after the notice of adjudication has been served: Section 108A of the Construction Act 1996.

3. If the adjudicator’s terms and conditions do not set out the circumstances in which the adjudicator is entitled to be paid, and the court declines to enforce an adjudicator’s decision, is the adjudicator still entitled to be paid his fees and expenses?

No. The Court of Appeal held in PC Harrington Contractors Ltd v Systech International [2012] EWCA Civ 1371 that an adjudicator was not entitled to payment of his fees and expenses in circumstances where his decision was unenforceable due to a breach of natural justice. However, many adjudicators will now include a provision in their terms and conditions that they will still be entitled to payment of their fees and expenses, even if the decision is not enforceable. If the parties continue with the adjudication after having received such terms and conditions, then the adjudicator’s fees will be payable irrespective of whether or not the decision is enforceable.

4. Can an adjudicator refuse to issue his decision until his fees have been paid?

No. See Mott Macdonald Ltd v London & Regional Properties Ltd [2007] EWHC 1055

5. If a responding party reserves its position on jurisdiction and refuses to sign the adjudicator’s terms and conditions, but participates in the adjudication, can the adjudicator still recover his fees from that party?

Yes. See Linnett v Halliwells LLP [2009] EWHC 319 (TCC)

6. Within how many days will the TCC aim to list adjudication enforcement proceedings?

28 days see section 9.1.3 of the TCC Guide.

7. Can the referring party amend a notice of adjudication after it has been served?

No. See Vision Homes Ltd v Lancsvills Construction Ltd [2009] EWHC 2042 (TCC)

8. Can an adjudicator’s decision be severed so that only part of it is enforceable?

Yes. See Cantillon Ltd v Urvasco Ltd [2008] EWHC 282 (TCC)

9. Does the Contracts (Right of Third Parties) Act 1999 grant a third party the right to adjudicate a dispute arising under a construction contract?

No. See Hurley Palmer Flatt Ltd v Barclays Bank plc [2014] EWHC 3042 (TCC)

10. The Construction Act 1996 only applies to ‘construction contracts’. Which 2 of the following activities are not ‘construction contracts’ under the Construction Act 1996?

A and E are not construction contracts. B,C and D are construction contracts. 

  • a. A contract to find and negotiate a land purchase
  • b. The erection of scaffolding
  • c. The installation of a large conveyor belt system
  • d. Fabricating plant on one site in England, prior to it being transported to a second site in England to be installed
  • e. The construction of an off shore wind farm anchored to the sea floor
    • A structure anchored to the sea floor or the sea bed does not form part of any ‘land’ so is not a construction contract – Stavely Industries plc v Oldebrecht Oil & Gas Services Ltd (2001) 98 (10) L.S.G 46.

11. Does the Scheme for Construction Contracts allow the adjudicator to determine his own jurisdiction?

No. Under the Scheme the parties must ask the adjudicator if they wish him to determine his own jurisdiction.

12. Do the TeCSA adjudication rules allow the adjudicator to determine his own jurisdiction?

Yes. Paragraph 12 of the TeCSA adjudication rules grants the adjudicator an express right to determine his own jurisdiction.

13. What is the limitation period for challenging an adjudicator’s decision?

The Supreme Court held in Aspect(Asbestos) Ltd v Higgins Construction Plc [2015] UKSC 38 that the limitation period to challenge an adjudicator’s decision was 6 years from the date of payment of the amount awarded in the decision.

14. If the contract states that the parties must attempt to negotiate any disputes, can a party choose to refer the dispute to adjudication before any negotiations have taken place?

Yes. The contractual provisions cannot fetter the parties’ right to adjudicator a dispute ‘at any time’: City Basements Ltd v Nordic Construction UK Ltd[2014] EWHC 4817 (TCC)

15. In adjudication proceedings, if a party wished to reply to a Rejoinder, what would that submission be called?

A Surrejoinder. The adjudication submissions in order are Referral, Response, Reply, Rejoinder, Surrejoinder, Rebutter, Surrebutter, Rebutter, Surrebutter, and so on…