REUTERS | Aly Song

The meaning of “dispute”

The meaning of “dispute” in section 108 of the Construction Act 1996 is not something that often comes before the courts. After all, everyone knows that if a party refers more than one dispute to adjudication, the adjudicator will not have jurisdiction (unless the parties have agreed otherwise).

However, when the issue does arise, it is usually left to the court to interpret the situation on an enforcement application. That is precisely what Akenhead J did in Witney Town Council v Beam Construction recently.

Here the parties were is dispute over the usual things (value of the contractor’s final account, whether practical completion had been achieved and what impact the employer’s possession of the building had on practical completion, release of retention, a claim for an extension of timeprolongation costs, the list goes on…).

The adjudicator, Tony Bingham, was asked to look at all of these issues by the contractor in its notice and in the referral. It seems to me that at the heart of all of these issues is the question: “what sum of money is the contractor entitled to?”. From the judgment, it looks like that is what Tony thought too, as he rejected the employer’s challenge to his jurisdiction “emphatically and very promptly”.

As is so often the way in adjudication, the employer refused to comply with the adjudicator’s decision (which awarded more time and a sum of money to the contractor) and the contractor went off to court to enforce it.

The court had to decide whether there really was only one dispute, which it did. I found a couple of Akenhead J’s points particularly useful for the parties (and adjudicators) when they are asked to look at this issue:

  • A dispute can be a single issue, or comprise any number of issues within it. (This dates back to the 2000 judgment of HHJ Thornton QC in Fastrack v Morrison.)
  • A construction contract is a commercial transaction and the parties would not contemplate that each issue between them would be referred to a separate adjudication. (The example given for this was a contractor claiming £100,000 for 50 variations, which was certified as £80,000 because the architect didn’t agree with the amount claimed for each variation or the work done. Is there one dispute with 100 sub-issues, or are there 100 disputes?)
  • There were clear links between the final account and some of the other matters in issue. (For example, the prolongation claim could not be resolved without deciding if the contractor was entitled to an extension of time; the insurance claim, level of retention and prolongation costs could not be determined until the date of practical completion had been established.)

To borrow from Akenhead J, parties should remember that a dispute is like a snowball rolling down a hill: it will gather more nuances and issues as time goes by, just like the snowball will gather more snow. Very rarely will the dispute be “like the proverbial rolling stone gathering no moss”. It is important to remember that this doesn’t mean there is more than one dispute.

Leave a Reply

Your email address will not be published. Required fields are marked *

Share this post on: