Tony Bingham says respondents’ habit of trying to halt an adjudication three days in needs to be taken more seriously
I call it the day three running jump. The adjudication starts, the referral is served, then on day three the respondent tells the adjudicator to take a running jump: “Dear Adjudicator, no offence meant, but go away. You have no jurisdiction, this adjudication is not allowed, so take a hike.” We adjudicator folk have got used to this day three (or four, or five) interruption. It goes with the territory. We don’t get niggled or aerated; we just get on with it. Almost always the adjudicator says, “No chance – because it’s a look-n-sniff observation only,” and almost always the respondent shrugs and says, “We will press on without prejudice,” sometimes adding, “We will deal with the point on enforcement if we lose.” Then if they do lose, the jurisdiction point is batted back and forth with the winner (it’s part of the territory again) and sometimes goes no further. If it does end up in court, so be it.
The mood of the judges in the Technology and Construction Court tea room is – how shall I put it – to give very limited encouragement to doing this
But now that adjudicating has become a lawyers’ playground, it doesn’t surprise anyone when the respondent tries a knock-out blow by calling for an emergency injunction on day three to put the adjudicator back in their box.
Billingford Holdings Ltd tried it. It had had a quarrel with the builder on its project, SMC Building Solutions Ltd, which then sent a notice of adjudication. RICS appointed the adjudicator, and SMC served the referral bundle. Day three, Billingford told the adjudicator: go away. Tish-tosh, said the experienced adjudicator, Mr Nigel Dight. Under the adjudication rules, the adjudicator wasn’t required to make an in-depth inquiry; he was only required to make an “observation” as to his own jurisdiction. It is not intended to be anything but a quick glimpse.
So Billingford issued an emergency injunction at 8:40pm in the High Court one night for a hearing the next morning. It’s that quick. But the mood of the judges in the Technology and Construction Court tea room is – how shall I put it – to give very limited encouragement to doing this. Putting a spoke in the wheel of adjudication takes some doing. “It will only be appropriate in rare cases for the TCC to intervene in an on-going adjudication,” said Mr Justice Fraser. I sense the door to obtaining an injunction to put a stop to an adjudication is only just a tiny bit ajar.
More from Tony Bingham:
He explained “powerful policy reasons” why adjudications that are under way should, for the most part, be allowed to continue through to a decision, with challenges to jurisdiction being made only after the decision. The judge said, “Adjudication is designed to be quick and inexpensive, and adjudicators are expected to reach a decision within 28 days, or 42 days if extended. There is simply no time within that duration to factor in applications to the court, with complex points on jurisdiction, without causing serious disruption and delay to the timetable set down by parliament for an adjudicator to reach a decision.”
Earlier I said day three jurisdiction challenges are ever so ordinary. The odd one is new, clever or difficult, but by and large these challenges are run of the mill. Let’s face it, we have been at this construction adjudication business for more than 20 years, and adjudicators have become pretty sharp at sniffing out “gamesmanship” challenges. I do have two suggestions, though.
First, that we ramp up intensive adjudicator training and retraining courses on “threshold jurisdiction” points, and then (and only then) leave the jurisdiction decisions in the hands of well-trained adjudicators. Give them jurisdiction to decide jurisdiction. That shuts out any idea of going to court for an injunction.
Second, I am no longer satisfied it is correct for the TCC to rest on the notion that “adjudication is quick and inexpensive”. That is no longer true. It used to be a QS knocking the two project QSs heads together – a sort of valuation exercise on site. Now it has gone potty: it is attempting to litigate for an accurate result. The representatives spend huge sums producing files and more files and witness statements and expert reports, with argumentative lawyers devoting oodles of hours to law and evidence.
Somehow – amid all that – we must accurately deal with threshold jurisdiction points on day three. Crucial, in my view, is that if the jurisdiction challenge really is valid, then adjudication and all its expense should be stopped on day three. And, if the court is reluctant to interfere, save in plain and obvious cases, it’s necessary for the adjudicator to decide arguable cases and be competent and confident to do so.
I am not arguing with the court’s policy to not interfere with adjudication and not injunct the adjudication. Going to court for a specifically prepared jurisdiction case is far too expensive. Better by far is to equip adjudicators with the right to decide the point. It is then binding in the same way as the substantive decision on the dispute. I am confident that adjudicators will make a fair fist of deciding their own jurisdiction.
Oh, and one other thing. These adjudicators double as arbitrators as well – and guess what? The Arbitration Act 1996 authorises the arbitrator to decide on its own substantive jurisdiction. So the idea is already well embedded.
Tony Bingham is a barrister and arbitrator at 3 Paper Buildings, Temple