There’s no excuse for lateness

In litigation, deadlines are often missed but fortunately the court can extend time. adjudication is less forgiving.

Several old Technology and Construction Court (TCC) decisions suggested that a minor slippage of timetables would not make an adjudicator’s decision unenforceable.

However, the case of Ritchie Brothers vs David Philp in the Scottish court seems to have changed that, and a quartet of recent cases (Hart vs Fidler, Cubitt vs Fleetglade, Epping Electrical Company vs Briggs & Forrester and Aveat Heating vs Jerram Falkus Construction) show that the TCC is less flexible than it was.

This is the combined message from these four decisions:

First, the adjudication timetable must be strictly observed. In the Hart case, Judge Coulson said: “The whole point of adjudication is that speed is given precedence over accuracy. What matters is a quick decision, not necessarily a correct one.” So, the court will not generally disregard non-compliance unless it has been sanctioned by the parties.

An agreement that provides for an adjudicator’s decision to remain valid even if it is late does not comply with the Construction Act. Such provisions, which exist in the CIC and GC/Works adjudication procedures fall away, because they do not comply with the act’s “minimum adjudication requirements”. In this case, the Scheme for Construction Contracts applies instead. That decision is prompting some frantic amendments to these standard forms!

The scheme provides that “the referring party shall not later than seven days from the date of the notice of adjudication, refer the dispute in writing to the adjudicator”. This deadline is mandatory. The date of the Referral Notice means the date of its receipt by the adjudicator. Adjudicators cannot disregard any failure to comply with this seven-day period as they are not “seized” of the adjudication until the referral notice is served to them. However, this timetable has to be “operated in a sensible and businesslike way”. Where there is a delay of one day, and that delay is not the fault of the referring party (say, because a nominating body failed to appoint an adjudicator promptly) then the court may disregard non-compliance.

In adjudication speed is give precedence over accuracy. What matters is a quick decision, not necessarily a correct one

An adjudicator must make a decision within 28 days unless the referring party extends this period by 14 days or both parties agree to a longer period. Failure to comply will result in the decision being null and void.

There is a two-stage process involved in an adjudicator’s decision. Stage one is the reaching of the decision. Stage two is the communication of that decision to the parties. The act only obliges the adjudicator to “reach” a decision. However, the JCT98 contract states that the adjudicator should “reach a decision and forthwith send that decision in writing to the parties”. In such circumstances, where an adjudicator reaches a decision on time but issues it to the parties half a day late, that the decision is still issued “forthwith”.

Adjudicators should not seek to exercise a “lien” over their decisions (that is, withhold them) until fees are paid. If they do, and a party loses its rights (that is, it is out of time for issuing fresh proceedings) then clauses giving the adjudicator immunity from suit will probably not apply!

Finally, when calculating deadlines in adjudication:

• The provisions of the Civil Procedure Rules do not apply
• No account is to be taken of fractions of a day, and “day” does not mean “business hours”.

The message to adjudicators is clear. Do not delay the process of reaching and issuing your decision. If you feel you need more time then you must get consent from both parties. If you are worried about being paid include a requirement in your terms for payment well in advance of the deadline for your decision. However, do not withhold your award.

If you are a referring party make sure you have finalised your referral notice before you issue your notice of adjudication. Factor in any problems in nominating an adjudicator and delivering the referral notice. If you are subject to the current GC/Works or CIC adjudication terms then notify the

responding party that you intend to follow the Scheme for Construction Contracts instead. However, if you do fall foul of the seven-day period, ask the responding party to waive the irregularity before spending further time and money proceeding with the adjudication. If the respondent does not agree, you will probably need to serve a fresh adjudication notice.