Stop at nothing

A recent decision of the Outer House of the Court of Session in Scotland throws light on what remains the main unresolved issue in adjudication. This is, how extensive are the powers of the court to investigate the conduct of an adjudicator when deciding whether to enforce a decision?

This case is also important in two other respects. First, it highlights the differences between English and Scottish law in this context. Second, it shows the desirability of adopting the Technology and Construction Solicitors Association's adjudication rules.

Here are the facts of the case. "A" was engaged by "B" (unusually, the firms were unnamed in the judgment) as a subcontractor for the design and installation of roofing and cladding works. Firm A later commenced adjudication proceedings and was awarded an extension of time and substantial loss and expense. When B refused to pay, A went to the Scottish courts to enforce the award.

B relied on two defences in the proceedings, only one of which need concern us here, that based on the terms of the subcontract. This was a standard form with bespoke amendments that incorporated the then TeCSA adjudication rules.

One of those amendments provided that neither party would make any application to the court "in relation to the conduct of the adjudicator or the decision of the adjudicator" until the completion of the main contract work. It seems likely that this provision was inserted to frustrate the primary purpose of the Construction Act, namely to improve the cash flow of parties doing the work. That is the way that Lord Drummond Young saw matters when, predictably, B argued that A's application to enforce the adjudicator's decision fell foul of the provision.

In rejecting that analysis, Lord Drummond Young drew an important distinction between two different types of application that can be made by parties in Scotland. First, an application for judicial review, where the unsuccessful party wishes to challenge the decision on the grounds that the adjudicator exceeded his jurisdiction or was guilty of some form of misconduct. The second type of application, that would obviously be made by a successful party, is to enforce the adjudicator's decision.

The decision throws up a number of questions with which lawyers north of the border will now have to wrestle

The judge used this distinction to give some meaning to the clause in the subcontract, but at the same time to allow him to back the claim for enforcement. What he did was to say that the clause did apply to an application for judicial review, but did not apply to an application for enforcement.

In coming to this conclusion, the judge paid heed both to the terms of section 108 of the Construction Act and the TeCSA rules. He noted that the section clearly envisaged that an adjudicator's decision be binding, albeit on a provisional basis, and that the TeCSA rules require an adjudicator's decision to be implemented immediately. This allows either party to obtain summary enforcement, regardless of jurisdictional or natural justice issues.

Had the case been decided under English law, different considerations would have applied. This is because, unlike the position in Scotland, the remedy of judicial review is not available to a party seeking to challenge an adjudicator's decision. That type of remedy is confined to decisions of public bodies.