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A good use of Part 8 in adjudication

In the long, slow days of the summer court recess, it was interesting to read Ramsey J’s judgment in Hurley Palmer Flatt v Barclays Bank plc.

From my perspective as an adjudicator, the judgment demonstrates a good use of CPR Part 8 during an adjudication and, as we rarely see the Third Party Rights Act 1999 before the courts, some may even consider it a bit of a treat!

Hurley Palmer Flatt v Barclays Bank

The case concerned a data hall at a data centre that was being built for Barclays plc. In 2008, Hurley Palmer Flatt was employed as the engineer to provide the mechanical and electrical engineering design services. The appointment provided for limited third party rights to be given to an “affiliate” of Barclays plc and for disputes to be referred to adjudication under the terms of the Scheme for Construction Contracts 1998.

Somewhere along the way (the judgment isn’t too clear on the detail of this), Barclays Bank plc became involved (as a third party or affiliate, in the language of the contract). Perhaps it was simply that they took possession of the data centre and were the ones suffering when a dispute with the engineer arose over the data centre’s chilled water system (said to be valued in the region of £4 million). Whatever the reason, it was Barclays Bank plc that served a notice of adjudication on 11 August and an adjudicator (Finolla O’Farrell QC) was duly appointed.

The engineer objected to the adjudication started by Barclays Bank plc. On 26 August, it commenced its Part 8 proceedings, asking the court for declarations to the effect that as Barclays Bank plc was not entitled to start an adjudication, the notice of adjudication was ineffective and the adjudicator lacked jurisdiction.

So far, this all seems relatively straightforward. We have often seen Part 8 declaratory relief proceedings used to clarify points part way through an adjudication.

Was the adjudication stayed?

As all this occurred towards the end of August and the hearing before Ramsey J took place on 9 September, it was a pretty quick turnaround from issue of proceedings to the hearing. As the referral was served on 18 August, that still gave the adjudicator and the parties time, if time was needed, before the adjudicator’s decision was due.

One thing the judgment doesn’t mention is whether both parties agreed to a stay of the adjudication pending the outcome of the declaratory relief hearing. I probably don’t need to remind anyone that, unless both parties agreed to this, the adjudicator and the parties would be required to plough on concurrently with the court application.

This has happened to other adjudicators. For example, see the judgment in WW Gear Construction Ltd v McGee Group Ltd. On that occasion, the court refused to grant permission for the adjudicator to get a copy of the judgment before he reached his decision. It also came up in Glendalough Associated SA v Harris Calnan Construction Co Ltd, where the same judge did want part of the judgment communicated to the adjudicator before the adjudicator made his decision.

I discussed both judgments last year. I said then that:

“I can see the rationale in both cases, but I would prefer to have my decision consistent with a judge’s (binding) finding if possible. I would prefer to know what the court has decided, even if I only have (to borrow from Edwards-Stuart J in McGee), ‘just over one working day’ to make my decision. I accept that that is a very short time but, in adjudication, we often work against the clock, with very little time, because the parties insist of providing submissions at the eleventh hour. The court may have thought it was an ‘unacceptable imposition on an adjudicator and one that may well result in unfairness, misunderstandings or mistakes’, but it’s not unusual (to borrow a line from Tom Jones).”

In this case, I guess it may not have mattered too much whether there was a stay, since Ramsey J held that Barclays Bank plc was not entitled to start an adjudication, which meant the notice of adjudication was ineffective and the adjudicator lacked jurisdiction.

This is yet another example of how effective the TCC is at supporting and policing adjudication, making sure the process works and the parties keep their houses in order. That has to be a plus for adjudicators and users alike.

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