The use of weapons: Throwing in brand new arguments

Oh for heaven’s sake! Three times the adjudicator said he would serve up his award on 19 January. And when it came to the parties bang on the 19th, the loser said it was outside the 28-day timetable and therefore a nullity. So “cock-a-doodle-doo” crowed the loser: we won’t pay.

The fight was between Sterling Building Company and Letchworth Roofing. At the end of it, the adjudicator awarded the roofer £47k. And Sterling was right, the award rolled in after the 28th day. But their argument was hopeless, said the judge. When the adjudicator said it would come on the 19th, neither party whinged. Now, you can’t keep the whinge up your sleeve and run it once you’ve lost. Truth to tell, some arguments to resist the effect of an award are not worth powder and shot.

Sterling ran another point, which is more interesting. There is a developing line of adjudication cases where the respondent serves up a defence full of brand spanking new arguments in the form of hitherto unmentioned ideas for counterclaiming cash from the referring party. That lot arrives on day seven of the 28-day 100-miles-an-hour dash. The remaining 21 days are supposed to belong to the adjudicator. It’s his time. That’s for him to adjudicate the referral bumf and respondent bumf. But he can’t even begin, if the response has a kit-bag full of new arguments. Let me come back to all that. Let’s look at the Letchworth case.

The judge is not saying you can run any defence you like. He is saying you can run any defence to the claim with which the adjudicator is dealing

The main contract was for roofing work at South Hill Church, Hemel Hempstead. Sterling sublet the task to Letchworth. There was a quarrel about £56k. Letchworth called for

the adjudicator. He delivered his award. The dispute identified in the notice of adjudication was Letchworth’s interim account for gross £117k. Sterling raised a cross-claim for delay. Letchworth said in its notice that the issue was “whether a valid notice of withholding was in place”. If it was not, it is all over and goodnight for Sterling. So, Sterling argued that irrespective of the want of a withholding notice, it had a good argument for late completion and therefore damages. Sterling said it could run any defence it liked. And I can tell you that I keep seeing that type of mentality coming into adjudications. If it is right, it is a nightmare.

Folk keep pointing to a case last year called Cantillon vs Urvasco and using it to make a mountain out of a molehill. In it, one party tried, unsuccessfully, to upset the adjudicator’s award. The judge explained what can be allowed into a response. “It includes and allows for any ground open to the responding party that would amount in law or fact to a defence of the claim.” Well, well, says many a respondent, and brings into his defence his pots and pans. Then they point to something else the judge said: “In my view, one should look at the essential claim that has been made and the fact that it has been challenged as opposed to the precise grounds upon which it has been rejected. Thus it is open to any defendant to raise any defence. Similarly, the claiming party is not limited to the arguments, contentions and evidence put forward before the dispute crystallised. The adjudicator or arbitrator must then resolve the referred dispute, which is essentially the challenged claim or assertion but can consider any argument, evidence or other material.” Take great care with all this. The judge is not saying you can run any defence you like. He is saying you can run any defence to the claim with which the adjudicator is “dealing”. He is only dealing with the dispute in the notice.

I can tell you that i keep seeing that type of mentality coming into adjudications. If it is right, it is a nightmare

So, in the Letchworth case the dispute with which the adjudicator was dealing was whether there was a valid withholding notice. It is open to the respondent to argue that issue only. In this case, the adjudicator did his job and that’s that. Pay up.

It’s all very well to allow in any argument when the issue in the notice of adjudication is an “easy” one, such as whether Tuesday follows Monday. Most adjudications are more complex and “new stuff” is, as I said, a reliable nightmare. The legislation aims to get all done in 28 days. There is no chance of that if anything can come in that’s brand new. Yes, yes, I know that’s what we do in litigation when no time limits apply. But adjudication is a 28-day game. Very different.

Credit: Simone Lia