In 2004, Higgins, a main contractor, engaged Aspect to conduct an asbestos survey for a property in London. Higgins subsequently engaged a subcontractor for asbestos removal and demolition. In 2005, Higgins made a claim against Aspect saying that more asbestos had been discovered than Aspect had reported which meant it had to pay the subcontractor more than originally planned and it had also caused a critical delay to the works.

In 2009, Higgins commenced adjudication against Aspect on these issues. The Scheme for Construction Contracts applied. In July 2009, the adjudicator decided that Aspect should pay to Higgins the sum of £658,017, which Aspect paid in August 2009. In February 2012 Aspect commenced legal proceedings against Higgins to recover the monies paid. The proceedings had been commenced more than six years after Aspect’s supposed breach of contract or duty in 2004 but less than six years after making the payment following the adjudicator’s decision.

Four preliminary issues were referred, of which three are relevant:

(i) Was it an implied term of the parties’ contract that an unsuccessful party to adjudication would be entitled to seek a final determination by litigation and, if successful, recover payment made?
(ii) If there was such an implied term, what was the applicable limitation period for a claim seeking to enforce it?
(iii) What was the limitation period applying to Higgins’ claim?

The Judge decided that there was not an implied term, although he did find that if there had been such an implied term then the applicable limitation period would have been six years from the date of the payment made. As to issue (iii), the Court held that Higgins’ claim for negligence was time barred. Aspect appealed on issue (i) and Higgins appealed on issue (iii).

The Court of Appeal overturned the Judge’s decision and decided that there was an implied term that a successful party to an adjudication would be entitled to seek a final determination by litigation and if successful, recover payment made. It agreed with the Judge that the applicable limitation period for such implied terms would be six years from the date of the payment made.