Adjudication Update

In Joseph Finney Plc v Vickers & Vickers HHJ Wilcox considered an application for summary judgment. The claimant contended that there was clear and unambiguous evidence of a compromise agreement whereby the defendant had agreed to pay a sum of money and on the strength of that promise the claimant had agreed not to pursue his remedy to recover that money by way of adjudication.

The judge held that a promise not to adjudicate was good consideration. An adjudication would quite clearly involve expenditure of money, time and resources. As the defendant had repudiated the compromise and not paid up, the claimant was not bound by the promise not to adjudicate and was entitled to summary judgment for the sum claimed.

In Scotland, Watson Building Services Ltd (having previously objected to the appointment) brought a Petition objecting to the decision of the adjudicator. Lady Paton held that the adjudicator could and indeed should consider the contract terms (the dispute being whether a particular appointing body's terms had been incorporated) and make decisions accordingly. Disputes often arise in the course of a project about the meaning and effect of the contract. This might include terms going to dispute resolution procedures.

The dispute involved the true construction of the contract terms. Thus the adjudicator had power to determine the meaning of the contract terms even if this resulted in his determining a dispute about his appointment and thus his jurisdiction. Here, whilst he had that power and authority, the petitioners by their response actually placed the issue of the proper construction of the terms of the contract (and thus the consequential matter of the procedure for his appointment) before the adjudicator. They accepted that the dispute over the proper construction of the contract terms was to be treated as a "dispute arising under the contract" which the adjudicator was competent to resolve. Lady Paton also reconfirmed the options for those who challenge jurisdiction as set out by HHJ Thornton QC in Fastrack v Morrison.

1. Agree to widen the jurisdiction of the adjudicator so as to refer the dispute about jurisdiction to the same adjudicator;
2. Refer the dispute about jurisdiction to a different adjudicator;
3. Seek a declaration from the court that the purported adjudicator had jurisdiction;
4. Reserve their position, participate in the adjudication then challenge any attempt to enforce the decision on jurisdictional grounds.

Here, whilst the petitioners might have intended to adopt the fourth ground, the court found that they had adopted the first.

Nick Raynsford has just announced the government's proposals for adjudication. These include:

1. Better guidance and training of adjudicators so that they understand the full extent of and the limitations on the powers and duties provided by the Scheme;
2. Better guidance to lay parties on their rights and on how to use the adjudication system effectively;
3. Amending the Act to outlaw the practice of putting into contracts requirements that a party that refers a dispute to adjudication should bear the other party's legal costs.

Human Rights/Arbitration

In Doherty Contracts Ltd v Moon & Anr HHJ Seymour QC was asked to consider the effect of the European Convention on Human Rights in relation to the conduct of arbitration proceedings. It was suggested that the arbitrator had breached his duty under Section 33 of the 1996 Arbitration Act to act fairly and Article 6 of the ECHR since he had not ruled that costs followed the event. The judge said that there was no justification to consider Article 6 of the ECHR when considering the conduct of arbitration proceedings. The terms of the 1996 Arbitration Act are sufficiently wide to cover all aspects of the conduct of arbitration proceedings.

Cases From the TCC

In Leicestershire County Council v Gordon Hewitt Associates & ADW Partnership, HHJ Bowsher QC had to consider questions of causation. The defendant architect and consulting engineer had made allowance for the fact that the first floor concrete slab would sag due to its weight. The extent of the sagging had actually been set out in the specification.

However, the Council also installed a closing aisle shelving system on the floor. The weight of the system and the documentation it held caused the floor to sag more so that the shelves "self-rolled" and could not be operated. The judge held that it was for the suppliers of the system and not the defendants to establish whether or not the system could have been installed effectively given the extent of the sagging to the slab as per the specification and the additional sagging which might be caused by the system itself.

In Scottish & Newcastle plc v GD Construction (St Albans) Ltd, HHJ Seymour QC had to consider whether under a standard IFC 84 Contract, the defendant's liability for a fire allegedly caused by its negligence was excluded by clause 6.1.2 which stated that the contractor was not liable for "loss or damage to any property required to be insured thereunder caused by a specified peril." The employer had to take insurance against specified perils including fire. The judge held that the inclusion of fire in the list of specified perils did not include fire caused by negligence. Therefore, fire was not subject to the exclusion.

Coincidentally, the Scottish Court in European and International Investments Inc v C.V. McLaren Building Services Ltd reached a similar conclusion under the Scottish Minor Works Contract 1986. Here, the reference to "joint names cover" did not include loss and damage caused by the negligence of the contractor (or any sub-contractor for whom the contractor was responsible).

In Video London Sound Studios Ltd v Asticus Ltd and Anr, the claimant claimed for damage to electronic recording equipment caused by debris, which fell on to the equipment during demolition works. The defendant claimed that they could not be liable in nuisance because they had taken all reasonable steps to avoid any harm occurring to the claimant.

HHJ Wilcox held that whilst the damaged equipment was a fitting and not a fixture, where there was actual damage to property, taking all reasonable steps to avoid harm did not provide a defence to nuisance. The damage was foreseeable and the claim allowed.

Expert Evidence

In Kranidiotes v Paschali & Anr, the CA had to consider the actions of a judge who had appointed a single joint expert to prepare a report on the market value of shares. A fee cap of £10,000 was set. The expert realised that the extent of the material supplied was such that he could not prepare a report within the cap and accordingly sought directions from the judge.

The judge decided he had to achieve a fair result and also one which was proportionate to the issues in dispute. The maximum sum recoverable by the claimant was £80,000. The expert suggested that his costs could amount to £70,000. Therefore, the judge decided to use his discretion and dispense with the service of the first expert and appoint a cheaper one.

The CA declined to interfere with this case management decision since it felt that the judge had not exceeded his discretion. The judge believed that the cheaper quote would still ensure that guidance could be given at trial on the claims being made. The sum of money in issue had not warranted a payment of substantial costs and the judge had stressed at all times the need to achieve a fair and proportionate result.

Health & Safety

London Underground Ltd and Tilbury Douglas were fined a total of £95,000 (plus costs of £35,000) following an incident where a crane and jib fell through a house roof while a family slept below. Both parties pleaded guilty to breach of duty under section 3(1) of the Health and Safety at Work Act in failing to protect others not directly in their employment.

Other Cases of Interest

In County Fire Officer v City Logistics Ltd, Turner J considered the Fire Precautions Act 1971. He held that a fire officer was entitled, when deciding whether or not to issue a fire certificate for a building, to consider not only means of escape but also means of fighting a fire. Here, the judge upheld the requirement of the fire officer for CL to install a sprinkler system.

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