REUTERS | Yves Herman

Do deficiencies matter?

I have recently read Ramsey J’s judgments in OSC Building Services v Interior Dimensions and PT Building Services v ROK Build in adjudication enforcement proceedings and I was intrigued by what I read. I think we may be witnessing a move away from the court’s strict interpretation of what constitutes “the dispute” referred to adjudication.

It is a long established principle in adjudication that if the adjudicator tries to decide matters that were not referred to him then he is acting outside his jurisdiction and his decision will not be enforced (Bouygues v Dahl-Jensen). As a result, referring parties have had to ensure the referral notice is consistent with the notice of adjudication.

In both of these cases, Ramsey J allowed some leeway on the “deficiencies” between the notices of adjudication and referral notices.

OSC Building Services v Interior Dimensions

Here the court was prepared to determine the nature of the dispute referred to adjudication by reading the notice of adjudication, the referral notice and the parties’ earlier correspondence together. On the facts, the adjudicator’s decision was enforced, despite:

  • The claimant claiming a different figure (£23,000 and £24,000) in the notice of adjudication and referral notice.
  • The notice of adjudication and referral notice referring to a failure to serve a “valid withholding notice” in relation to a “final account”; the adjudicator’s decision referred to an interim account.

PT Building Services v ROK Build

The sub-contractor referred to a document labelled as an “anticipated final account”. The adjudicator’s decision referred to interim amounts payable. Ramsey J agreed with the sub-contractor that the dispute referred was essentially about what sums were due to it and enforced the adjudicator’s decision. However, the court could have determined that the “anticipated final account” dispute referred to adjudication only allowed the adjudicator to rule on a final account basis.

So, what does this all mean in practice?

Would I have resigned in either case, based on the principles in Bouygues? Would I be less inclined to resign now?

Without knowing the full facts (I’ve learned that what is presented to the adjudicator and what is presented to the court and/or referred to in enforcement judgments aren’t always consistent!), it’s difficult to say. However, based on the perhaps more liberal application of what constitutes a dispute, I would speculate that the result of these judgments is that this is yet another example of the widening of an adjudication’s congregation.

On a different day, with different facts, the court could have determined both disputes differently. Does this mean there is now more uncertainty and Ramsey J has “muddied the waters”?

I can’t help feeling that these are merits based judgments, so, yes, this is likely to make things more uncertain in terms of predicting the outcome of enforcement proceedings.

and how would I deal with this?

In H&G v Ashwell, Ramsey J said that an adjudicator should satisfy himself that he had jurisdiction including, if necessary, by acting on his own volition. However, does this extend to identifying inconsistencies before they are raised by a responding party?

In my view, if a responding party is represented then I am less likely to raise a point. However, if the party was unrepresented and/or unsophisticated and/or unfamiliar with the adjudication process and I spotted an obvious and easily correctable discrepancy, I would be more likely to note it in correspondence and invite both parties to comment.  Even if I elected to raise a point, I certainly would not resign until after inviting and receiving comment on whether it was appropriate to do so.

On a practical note, if the discrepancy was spotted early enough then the impact on the time for the decision could be minimal and corrected with minimal cost – in contrast with it being spotted late. The question of whether I will be potentially putting one or both of the parties to unnecessary cost is, in my view, one of the most important factors to take into account.  For this reason, the time when a discrepancy is spotted is key.

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