The Technology and Construction Court enforces, what was in reality, a “vanilla ‘final account’” adjudicator’s decision

Adjudication enforcement proceedings are rare, not least because the grounds on which an adjudicator’s decision can be challenged are limited. 

In a recent case (Home Group Limited v MPS Housing Limited [2023] EWHC 1946 (TCC)), in which Devonshires acted for Home Group, the Technology and Construction Court (the TCC), enforced an adjudicator’s decision where the Defendant sought to argue that the subject matter was too complex for adjudication and the Defendant did not have sufficient time to analyse and respond to the information in the Referral.

Background  

The parties entered into an amended JCT Measured Term 2011 contract (the Contract), which required the Contractor to carry out maintenance and repair works to the Employer’s properties in the south-east of England.  The contract provided for a 12 month break period should the Contractor wish to terminate the Contract early.  In a first adjudication decision (which was not challenged), the Contractor was found to have repudiated the Contract in terminating the Contract seven months after serving its break notice.

A second adjudication took place between the parties in relation to the losses which the Employer suffered as a result of the Contractor’s repudiation of the Contract. In broad terms, those losses related to the completion of works not yet carried out by the date the Contract was repudiated plus the costs of third parties carrying out works during the remainder of the notice period.

Various jurisdiction arguments were raised by the Contractor during the adjudication, all of which were rejected by the Adjudicator.

On 28 April 2023, the Adjudicator issued his decision ordering that the Contractor pay a sum of £6,565,831.94 plus interest and 85% of the Adjudicator’s fees. The Employer made demands for payment following the Adjudicator’s decision, however the Contractor confirmed that it would not make payment as it considered it had valid grounds to resist enforcement of the decision.

Therefore, Devonshires (on the Employer’s behalf) promptly commenced adjudication enforcement proceedings in the TCC. The Contractor sought to resist the enforcement of the Adjudicator’s decision asserting that it was unable to properly digest and respond to the material served with the Referral; and this was a breach of natural justice which had led to a material difference to the outcome of the adjudication.

The Judgment

Mr Justice Constable enforced the Adjudicator’s decision rejecting the Contractor’s arguments. The Judge found that the Contractor rightly abandoned its argument (raised during the adjudication) that the dispute was too complex per se for adjudication and confirmed that such an argument would have failed. 

Despite the Adjudicator’s decision requiring payment of a substantial sum, the Judge found that the complexity should not be over-stated; the dispute was significantly more straightforward than many final account adjudications involving not only money claims but also complex disputes relating to extensions of time.

Instead, in circumstances where the Adjudicator has considered the position and expressed the ability to render a fair decision, the question will inevitably centre upon the timing and provision of material to the responding party and its ability to fairly respond to the case it has to meet.

Having considered the provision of information by the Employer prior to the adjudication together with the offers made to the Contractor to attend the Employer’s offices to access the underlying electronic information, the Judge rejected the Contractor’s submissions. The Judge noted that “it was never realistic” that it would be necessary to provide detailed information on each and every line item of the claim and to use this as a reason to refuse to engage in an analysis of the claim. By the time of the Referral, the Judge found that the Contactor had been in possession of a draft expert report for 5 weeks and amended appendices for 3 weeks. That, he found on the facts, was sufficient time for the Contractor to engage with and analyse the claim.

Conclusion

We are pleased to have secured this outcome for Home Group after two successful adjudications – first, in relation to the Contractor’s repudiation of the Contract, and second, the losses arising as a result of the repudiation. 

The case has reinforced the TCC’s robust approach to the enforcement of adjudication decisions.   While the Judgment does not close the door to parties being able to rely on insufficient time to prepare its case as a valid ground for resisting enforcement, the success of such arguments will be a matter of fact and degree and will be viewed with scepticism by the court.

We consider it right, in circumstances where the Contractor itself artificially stymied the timetable in the adjudication unless it was granted 3 months to provide its response, that the court ought to be sceptical to allow the Contractor to resist enforcement on this ground. Indeed, the decision reinforces that parties should proactively engage with claims, rather than refusing to engage unless each and every piece of supporting information is provided.

It is also unsurprising that the Judge confirmed that the dispute was not too complex to be decided by adjudication. The TCC is adept with dealing with complex disputes; so too are adjudicators. The typical disputes on construction projects were known well before adjudication was introduced by parliament, and complexity is unlikely to be a valid bar to enforcement of an adjudicator’s decision unless the adjudicator decides they have insufficient time to do broad justice between the parties.

Key takeaways 

For any party faced with a seemingly large adjudication either by virtue of the sums in dispute or the various issues or evidence before it, paragraph 50 of the judgment is well worth a read. In summary:

• The default position is that an adjudication decision is enforceable.
• If there is a breach of natural justice and the breach is material - in that it has led to material difference in the outcome - the adjudication decision will not be enforced. The court examines such defences with a degree of scepticism.
• Complexity and time constraints are inherent in the adjudication process. These are not bars in themselves to enforcement.
• If the adjudicator has given proper consideration at each stage to the issues and concludes that he or she can do broad justice between the parties, the court will be reticent to conclude otherwise.

For more information about this case or adjudication and its enforcement in general, please contact Karen Morean or Adam Mathewson.