Adjudication Update

In Edmund Nuttall Ltd v R G Carter Ltd, HHJ Seymour QC refused to enforce the decision of an adjudicator since there was no jurisdiction. When Nuttall commenced adjudication proceedings, the notice included a claim for an extension of time based on a claim document prepared in May 2001. When the Referral Notice was served, it included a delay analysis prepared by an expert on behalf of Nuttall, which made a claim for an identical extension of time. However, the justification for the extension was different to that put forward in the May claim.

The question the Judge had to answer was not whether there was a dispute between Nuttall and Carter as at the date of the Adjudication Notice, but whether the dispute upon which the adjudicator adjudicated was that which was the subject of the Adjudication Notice. The Judge rejected the submission that the dispute should be identified by reference, at least principally, to what was being claimed. Nuttall suggested that it was enough that the extension of time being sought was always the same and irrelevant that the facts and arguments relied upon in the expert report were significantly different from the facts and arguments relied upon in the previous claim.

The Judge said:-

"the whole concept of adjudication is that the parties to an adjudication should first themselves have attempted to resolve their differences by open exchange of views and, if they are unable to, they should submit to an independent third party for decision the facts and arguments which they have previously rehearsed amongst themselves. If adjudication does not work in that way there is the risk of premature and unnecessary adjudications in cases in which, if only one party had had a proper opportunity to consider the arguments of the other, accommodation might have been possible".

Here, as the adjudicator had considered the expert report, the Judge ruled that he had considered and made decisions upon something, which had not been referred to him for a decision. The decision was made without jurisdiction and was therefore unenforceable.

In Chamberlain Carpentry & Joinery Ltd v Alfred McAlpine Construction Ltd, HHJ Seymour QC had to consider arguments being made by McAlpine to resist enforcement. The Chamberlain Notice of Adjudication listed eight heads of claim. Thus McAlpine argued that Chamberlain had sought to refer not a single dispute but a number of disputes. HHJ Seymour QC (just as HHJ LLoyd QC had in McLean v Swansea - see Issue 18) accepted that it is possible to contemplate a substantial dispute with a number of different elements. Here it was plain that the dispute referred by Chamberlain was how much it was due to be paid by McAlpine.

McAlpine had included its own adjudication rules as part of the contract. These included that the referring party (provided it was not McAlpine when each party would bear their own costs) should be responsible for all of the costs incurred by all of the parties in the adjudication on a full indemnity basis. Thus one of Chamberlain's requests, following these rules, was that the adjudicator made an assessment of the costs incurred by McAlpine. McAlpine said this was a separate dispute. The Judge disagreed saying that requesting an assessment of costs was a natural consequence of the referral.

It is of interest that in considering the interpretation of the Notice, the Judge referred to the guidance from Lord Hoffman in the case of ICS v West Bromwich Building Society. Lord Hoffman stated:-

"Interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties.the meaning of a document is what the parties using those words against the relevant background could have reasonably been understood to mean."

Here it was clear that Chamberlain were referring a dispute as to how much it should be paid and that, on no sensible interpretation, were they seeking any form of declaration.

Finally McAlpine suggested that, since the adjudicator had to go "hunting through" the material presented to him by Chamberlain to find out which the relevant interim application was, the dispute had not been identified with sufficient clarity. This was given short shrift, although of course any documentation should be submitted to an adjudicator in as "user-friendly" a way as possible.

In Watkin Jones & Son v Lidl UK GmbH, HHJ LLoyd QC had to consider an application to restrain an adjudication. Previously, Watkin Jones had been awarded almost £350k on the basis that no notice had been served by Lidl against application 11 in accordance with clause 30.3.3 of the JCT Standard Form of Contract with Contractor's Design. By clause 30.3.5, without such a notice, the sums applied for became due and payable.

Lidl said that the new dispute related to the question of what was the properly calculated sum due under application 11. HHJ LLoyd QC held that the subject matter of the new adjudication was a dispute about the value of application 11. That issue had been resolved in the first adjudication where the adjudicator had considered the application for payment and the terms of the contract. Accordingly, there was no dispute.

In Parsons Plastics Ltd v Purac Ltd, the CA considered an appeal from the judgment of HHJ Kirkham. Parsons had been successful in an ad hoc adjudication carried out in accordance with the terms of the sub contract and not pursuant to the HGCRA. Six days after the adjudicator's decision was given and before paying any money pursuant to that decision, Purac served a withholding notice pursuant to the contract. Purac claimed that the costs to complete the works exceeded the sum owing under the adjudication decision. The CA, agreeing with the Judge, held that under the terms of this particular contract it was open to Purac to set off against the adjudicator's decision any other claim they had against Parsons, as long as that claim had not been determined by the adjudicator.

Expert Evidence

Austen v Oxfordshire County Council confirms that where a single joint expert is appointed, a Court can permit cross-examination if it was in the interests of justice. Here, whilst both parties had appointed their own medical experts to assess the physical injury, a psychiatrist was appointed as a joint expert. Although that report conflicted with the claimant's expert medical evidence, the trial judge declined to let the claimant cross-examine the psychiatrist. Brown J held that in refusing the application to cross-examine, a potential injustice had been caused to the claimant.

Other Cases of Interest

The outcome of Hayes v Stewart & Anr, a claim for just under £6k is of interest, since although the CA ordered a re-trial, that re-trial was not to be listed until the parties had tried to resolve the matter through ADR.

Health & Safety

In McGarvey v Eve NCI Ltd & Anr, the CA held that a main site contractor does owe employees of a sub contractor a duty of care if that contractor had advised the employee to use equipment which was inappropriate for the task at hand. The employee, who was working alone, had fallen from a ladder. His employer, the first defendant, had been sub-contracted by the second defendants. The employee had been told by the sub contractor to use a ladder to get to some cables. The ladder, which was not attached to the building and not footed, was dangerous and inappropriate for the task. The employee had not yet received any safety training. It was too long. There was no basis to criticize the Judge's apportionment of two-thirds liability to the employer (there had been no safety training) and one-third liability to the sub contractor (the ladder was unsafe).

In Nixon v Chanceoption Developments Ltd, the CA considered an appeal by the claimant against a judgment dismissing his claim for damages when he fell from scaffolding. The trial judge had held that the claimant had been responsible since he had climbed onto the scaffolding on a very windy day. The CA considered that the judge had been wrong to concentrate on what had caused the accident (ie the weather) rather than the fact that he had fallen. There were a number of breaches of the Construction (Health and Safety & Welfare) Regulations 1996 in relation to the scaffolding. The regulations were there to protect individuals from causing their own misfortune. The defendant was in breach of its statutory duty. The defendant was liable to the claimant.

On 8 April 2002, the HSE launched its new Construction Division. The new division has been centralised. The aim of the restructuring is to refocus the HSE's activities on achieving a reduction in accidents within the construction industry. There will be four construction units reporting direct to the Chief Inspector. The units are London, East and South East; Yorkshire and the East Midlands; Scotland and the North of England; and Wales, South West and West Midlands.

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