Silence isn't golden

It's odd what lawyers find to argue about. The latest dispute is about whether your argument amounts to a dispute, or whether it is just an exchange of contrary views. A bit like the Monty Python "argument" sketch, in fact. Everyone knows that the right to go to adjudication kicks in when you have a dispute. Very straightforward, you might think. But you would be wrong. The lawyers have got some complicated arguments going about when a dispute is not a dispute and it almost always seems to hinge on whether or not your opponent has made a formal response to the claim.

There are a lot of cases looking at whether just doing nothing in the face of a claim is enough to get a dispute going. The difficulty we have is that the cases say different things. So if the judges are in dispute (or should I say, are having an exchange of contrary views), is there any chance of getting clear guidance on whether the fight is officially on?

In the recent case of Watkin Jones & Son vs Lidl UK, Judge Mosley had to decide whether an adjudication taken by Watkins on an interim account was valid, even though Lidl believed that the claim was about the final account, and that time for payment had not yet come. Lidl lost the adjudication because it hadn't served any notices or responded at all to the interim account submission. And, of course, it didn't seem to matter that Lidl was defending a different ball game. It went on to defend Watkin's enforcement proceedings on the basis that since both parties were talking about different things, there was no dispute within the meaning of the Construction Act.

The adjudicator, Lidl claimed, was out of order in making any decision at all. The judge rejected Lidl's claim that its failure to respond and its mistake meant there was "no dispute". He said that doing nothing in the face of a claim was enough to get a dispute going.

He also said that, in his view, Judge Thornton QC in Fastrack Contractors vs Morrison Construction was actually wrong to say that "a dispute only arises when the claim is rejected in clear language". In the view of Judge Mosley, the failure of Lidl to respond to the claim – even in error – and the fact that there had been no rejection of the claim did not stop the claim amounting to a dispute. The adjudicator had therefore been properly appointed and his decision stood.

You can't blame Judge Thornton, though.

In making his pitch, he just repeated what the Court of Appeal had said in Monmouthshire County Council vs Costelloe & Kemple. No response – no dispute.

Alright, so the Court of Appeal said the opposite in Halki Shipping Corporation vs Sopex Oils. In that particular case, the judges said that a dispute could arise even where there had been no formal response to a claim. If money is claimed, there will be a dispute about it unless and until it is paid. If Judge Thornton QC says no dispute until you've notified your response, and the Court of Appeal in Halki says there will be a dispute even if you haven't notified your response, who are we supposed to listen to? How about Judge Seymour in Edmund Nuttall vs RG Carter? At first glance, he ignores Halki and stands with Judge Thornton in Fastrack. Yes, he says, for there to be a dispute, there has to be a chance for both sides to consider the issues and formulate arguments. But then he goes on to say that it would still be a dispute even if one party refused to tell the other side about his arguments. In other words, he appears to be endorsing the Halki line. All things considered, it looks like we are now three to one in favour of silence in the face of a claim being enough to get a dispute going.

So what do you do if you want to avoid being forced into an adjudication when you haven't yet decided what response to make to a claim? It goes without saying that all relevant notices must be served on time, whatever the circumstances. If you need more time to consider the claim, say so in writing. Nothing in this game is actually foolproof, but the clearer your correspondence, the better chance you have of fending off a hijack.