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Serial adjudications: a blight on the adjudication landscape, or an inevitable consequence of the process?

If the challenge is made early in the proceedings, before the responding party has incurred substantial costs, then I am more likely to resign.

The recent cases of Birmingham City Council v Paddison Construction Ltd [2008] EWHC 2254 and Benfield Construction Ltd v Trudson (Hatton) Ltd  [2008] EWHC 2333(see PLC’s update), (and the previous case of HG Construction Ltd v Ashwell Homes (East Anglia) Ltd [2007] EWHC 144) have reminded everyone of the dangers of trying to adjudicate the same dispute more than once.

It doesn’t seem to matter how a party dresses up the subsequent “dispute”, if it can be argued that it is the same or substantially the same as one previously referred to adjudication, one party will refuse to honour the decision and a court will refuse to enforce it. This is a waste of everyone’s time and money and does little to enhance adjudication’s reputation.

But how can we ensure that the same dispute is not being referred to adjudication for a second time?

In my view, responsibility primarily rests with the referring party and its advisors. They are the ones who select the chosen course of action (and Benfield is a good example of this), but it doesn’t stop there: adjudicators should also have their wits about them. The responding party should take responsibility for bringing it to the adjudicator’s attention if the dispute has been referred before, but if a party invites the adjudicator to resign due to a lack of jurisdiction, the adjudicator has a responsibility to make the right jurisdiction decision.

This leads to the question of how the parties can help to ensure the adjudicator makes the right jurisdiction decision. In my experience, the following may help:

Make the challenge early. Unnecessary costs can be avoided if the jurisdictional challenge is dealt with before the responding party has gone to all the effort of serving a response (and I’ve gone to all the effort of reading it). However, if the challenge is contained in the response itself, I may ask the referring party to address it in its reply and I will then deal with it as a preliminary point.

If the challenge is made early in the proceedings, before the responding party has incurred substantial costs, then I am more likely to resign. In such circumstances, the referring party can re-refer if it wishes, and/or seek a declaration from the TCC.

If the parties have already made extensive submissions by the time the challenge is made, and I am uncertain on the merits of the challenge, then I am more likely to proceed. I will consider the balance of convenience in terms of proceeding, taking into account such things as the costs to the parties of me resigning at such a late stage if the challenge is wrong, and the ability of the referring party to “correct” the jurisdictional issue and (for example) re-refer. Obviously, if I believe that the challenge is correct, then I will resign in any event.

Provide relevant documents. Remember that this sort of challenge usually turns on what has happened before I was involved in the dispute and what was (or wasn’t) decided by someone else. As a minimum, the parties should therefore prepare submissions that append papers from the previous adjudications, including:

  • The notice of adjudication.
  • Extracts from the parties’ relevant previous submissions, suitably annotated and referenced.
  • The previous adjudicator’s decision.

In Benfield the adjudicator seemed to be under the impression that the partial possession argument hadn’t been run before. It’s not clear from the judgment whether he had a copy of the notice of adjudication or submissions from the previous adjudication(s).

Guidance. There is little out there to assist adjudicators, other than the case law. Benfieldis helpful as it draws the case law together neatly. I was particularly interested in the point made by Mr Justice Coulson that the party could have raised the argument before but didn’t and that a new argument based on the same facts does not necessarily alter the underlying dispute.

And finally

I find jurisdiction arguments are raised more often than not. They are “part of the job” and an interesting intellectual challenge. However, everyone should remember that they’re not the real point of adjudication.

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