But sometimes it is not quite that simple.
To pick one example, the Limitation Act 1980 would mean that an adjudicator's decision would have to be enforced within six years under a simple contract (or within 12 years if it was signed as a deed). By definition, such a case is not likely to be significant until after 1 May 2004, when the act will have been with us for six years!
In a slightly different setting, I want to look at the right to adjudicate in the context of name-borrowing clauses in a construction management contract, where the real disputants may not have a direct contractual relationship.
What is name borrowing, you ask?
Well, about 38 years ago, FASS/NFBTE, a body that used to represent the interests of subcontractors, published the "green form".
This was intended for use by nominated subcontractors engaged by main contractors under the then JCT63. It expressly allowed the subcontractor to use a contractor's name, and if necessary required the main contractor to join with the subcontractor in arbitration proceedings, subject to the subcontractor giving the main contractor a suitable indemnity.
As a piece of draftsmanship, it was pants.
It gave rise to anomalies of interpretation that took decades to resolve. As Lord Donaldson once said: "Every conceivable complication will arise if the main contractor disagrees with the case put by the subcontractor."
This is well illustrated by the case of an employer going bust after the subcontractor had borrowed the main contractor's hat and "won" a recovery for "itself". Is the main contractor obliged to pay the subcontractor the amount so awarded? In CWS Limited vs Birse (1997), the courts decided it was.
As Judge Hawser said in 1986, the legal relationship created by name borrowing is unique. Judge Forbes, in a case in 1990, amplified this: "Undoubtedly, the name-borrowing provisions are very difficult to construe and any interpretation does give rise to grave difficulties … quite what is the nature of the relationship between the real main contractor and the subcontractor using the main contractor's name, I hesitate to say."
So, against the backdrop of these problems, why has the JCT, in the latest edition of its management contract, chosen to incorporate near identical provisions to the green form?
At present, I am waist-deep in a name-borrowing dispute arising under clause 4.27 of the works contract, which allows the works contractor, if it has a dispute over the amount certified to it under an interim certificate, to borrow the management contractor's name and adjudicate against the employer.
Although it has been argued that such a mechanism cannot operate where the management contractor's interest conflicts with that of the works contractor, there is no authority on its operation in an adjudication – but there might be shortly!
Potentially, the management contractor may be asked to join with the works contractor against the employer. Admittedly, the operation of this device is subject to an indemnity from the works contractor to the management contractor to protect it from the exposure the process might attract. This makes for tensions when dealing with the financial aspects of extensions of time under the works contracts as a result of the different powers of contractor and architect.
The name-borrowing provisions in adjudication can thus strain to breaking point the relationships of the management contractor with its employer and works contractors – and nowhere is this more stark than when its name is borrowed to launch an attack on the employer after the architect is alleged to have undercertified.
Watch this space for the second part of this nail-biting sequel and, possibly, some new law on the subject.
Postscript
Simon Tolson is a partner in solicitor Fenwick Elliott.
