Can’t pay? Will pay: How well does the system work

It’s all very well for yours truly to say of an adjudicator’s award: “just go and get it enforced.” What does that mean and, more importantly, how can you do it? Well, the recent case of Gipping Construction vs Eaves shows the way.

Eaves is a developer. It decided to build two timber-framed homes in Ipswich. Eaves engaged Gipping under a standard JCT contract. A dispute arose over whether the two bungalows were complete and free from defects. Gipping said they were, and wanted the balance of cash due. The dispute went on until Gipping ran out of patience and called for an adjudicator. The adjudicator did his stuff and on 10 October 2008 issued a formal decision that upwards of £71,000, was payable forthwith from Eaves. But money paid was there none.

This is where “go and get it enforced” is bellowed from the crowd. For anyone who enters an adjudication makes a contractual promise that they will obey what is decided. And if Eaves won’t obey, it is in breach of contract. “Enforcement” is when the High Court is brought in to order a party to obey. The route is to ask the High Court to issue a “summary judgment” or, to us lawyers, a “part 24 application”. Now let’s see how fast this all works.

Ten years ago, the high court promised it would adopt high-speed machinery to deal with adjudication. and in those 10 years it has never let us down

Gipping got fed up of waiting for Eaves to obey. On 6 November, it issued proceedings in the High Court. At the same time, it asked the judge to order a high-speed timetable. This is called “abridged” proceedings. On 10 November, the judge ordered an enforcement hearing in two weeks’ time, on 27 November. Why so fast? Ten years ago, the High Court promised it would adopt high-speed machinery to deal with adjudication. And in those 10 years it has never let us down.

So, the hearing was hard on the heels of the non-payer. Okay, in this particular instance there was a complicating turn of events: a bereavement in the Eaves family. Eaves applied to the judge for an adjournment. The court, of course, agreed. The case came to court, therefore, on 11 December 2008.

Gipping engaged a solicitor and barrister. Interestingly, Eaves applied to explain its reluctance to obey the adjudicator’s decision via a written commentary. So in court the judge was addressed live by a barrister and on paper by the defendant. Judges take this kind of thing in their stride. Eaves said it was upset because the dispute was about defective work, but the adjudicator had not troubled to visit the Ipswich site and take a look at what he was jolly well adjudicating about. Eaves said it was unfair on them not to inspect their work, so the whole process was unfair, so please strike down the award.

The judge would have none of the objection. If the adjudicator believed he had sufficient information, who is the court to criticise?

But the judge would have none of it. If the adjudicator believed he had sufficient information to reach his decision, who is the court to criticise? Ha! Quite right. So, the challenge failed and the award is to be obeyed. When? The rules of court allow only 14 days from the date of summary judgment. Eave’s letter asked for more time to pay. Here, the judge took the opportunity to emphasise a point. He had been asked three times already in one week on three different enforcements for more time to pay, and he was getting pretty tired of it. He warned that “inability to pay” is no excuse.

So, let’s recap. Say an adjudicator orders £71,000 to be paid in seven days but it isn’t paid. The injured party must seek a comment from the non-payer. If none comes then the court will deal with the whole process of enforcement in about four weeks flat. Add another two weeks for the pay up order to expire. Six weeks. Not bad.

What about the costs of the process? Here, it was Eaves that had no good reason not to obey the adjudicator and no reason to defend the action in court. So the legal costs of Gipping’s solicitor and barrister were ordered to be paid in 14 days as well.

Neat? Yes. Tidy? Certainly. The High Court has developed confidence in the way adjudicators have shaped up after these 10 years. And the adjudicator here had the confidence to know the court would support his decision. And a jolly good job, too.