Carillion vs Smith: Adjudicating the same dispute

It is a well established principle that an adjudicator cannot decide the same dispute as a previous adjudicator. If they try to do so, their decision will be a nullity. The difficulty, of course, is how this apparently simple proposition can be investigated by the court. There have been a number of cases in this area and it is notable that the court often reiterates that the resolution of this issue is a matter of “fact and degree”. This is another way of saying that ultimately each case will turn on its own facts. It may, however, be possible to draw some broad conclusions about the way that the court will go about looking into this question.

The fact that different or additional evidence over and above what was relied upon in the earlier adjudication is deployed in the later claim will not usually alter what the essential dispute is or has been

A very recent case in this area, which helpfully sets out a number of factors that can be used by the court, is Carillion Construction Ltd vs Stephen Andrew Smith. Tony Bingham considers a particular aspect of this case in more detail overleaf, but briefly Carillion raised a number of objections to the adjudicator’s jurisdiction. One was that out of three adjudications the third was essentially the same dispute as the second. The adjudicator and Mr Smith were invited to stay the proceedings pending determination of this issue but declined to do so. Carillion applied for a declaration in relation to these issues while the adjudication was ongoing.

In the court’s judgment the following factors, among others, can be used in considering whether the same or substantially the same dispute has been referred to or resolved in an earlier adjudication:

• What is, and was, the ambit and scope of the disputed claims that are being and were referred to adjudication? While this of course varies from dispute to dispute a reasonably broad brush approach has to be taken
• The fact that different or additional evidence over and above what was relied on in the earlier adjudication is deployed in the later claim will not usually alter what the essential dispute is or has been. This is an important point which earlier cases such as Benfield Construction Limited vs Trudson (Hatton) Limited [2008] have established, namely that new or different evidence does not of itself equate to a different dispute
• The fact that different or additional arguments are used in a later adjudication does not usually of itself mean that it is a different dispute, even if better arguments are deployed in a later adjudication
• The fact that quantum is different or claimed on a different quantification basis does not necessarily mean that the dispute
• is different
• Simply because the second dispute involves a very much larger amount of documentation again does not mean that this is a different dispute
• It is also legitimate to look at the expressed motivation of the party bringing the second adjudication and the reasons given for the basis of formulation of the later adjudication claim. In the Carillion case, the referring party expressly stated that the production of documentation by Carillion during the course of the second adjudication led to the way in which the third adjudication was formulated. It was clear that the third adjudication was not a new dispute but instead an elaboration of issues raised in the second adjudication, based upon an extensive re-examination of documents already disclosed in the second
• Notices of adjudication and referrals are not required to be in any specific form and should not therefore be interpreted as if they were contracts, pleadings or statutes. These are not of themselves going to determine whether the disputes are the same
• A strong pointer as to whether disputes are substantially the same is whether essentially the same causes of action are relied upon in the earlier and later notices and referrals, bearing in mind that one dispute may encompass more than one cause of action.

In the Carillion case the court found that the third adjudication covered the same dispute as the second and accordingly the adjudicator’s decision was unenforceable.

This case demonstrates that when considering whether the same dispute has been referred to adjudication twice, the court will look at the essential nature of the dispute and the causes of action that the referring party relies upon. Simply repackaging the same issues in a different format, even employing better and more extensive argument and evidence, does not mean that the dispute itself is different.

Simon Lewis, a partner at Dickinson Dees, acted for Carillion in this case