In reality we are down to two arguments. The adjudicator has acted unfairly, "in breach of natural justice", is one that works. If that complaint doesn't wash, then challenge the adjudicator: if you can show that they didn't have the authority to make the decision they made, you are out of trouble.
Challenging the adjudicator has become a ritual opening gambit – a party defending an adjudication starts off by announcing that there is no jurisdiction for the adjudicator to proceed. If there is not an obvious reason for saying so, make one up. Standard objections include: "There isn't a dispute"; "There might be a dispute, but it isn't the one that you've been told about"; "There's no contract"; "There's a contract, but it isn't a construction contract."
The game is becoming ever more sophisticated and expensive. Judge Thornton had to face a particularly fine-tuned argument in Pegram Shopfitters Ltd vs Tally Weijl (UK) Ltd. This was all about a shopfitting contract. Tally wanted its Oxford Street premises refurbished, in a hurry. The architect had introduced Pegram as a shopfitter, and work started on 9 June 2000. There was no attempt to draw up a contract, but six days after start on site everyone met and more or less agreed ("in a non-contractual sense," said Judge Thornton) that a contract would be drawn up on the JCT Prime Cost form. Tally and the architect would produce a schedule of work, and Tally would send a letter of intent.
The work went ahead. Tally wrote saying it wanted JCT Prime Cost to apply, but Pegram wrote back saying that it preferred its own standard terms. The work was completed without any clear acceptance by either party of any contract.
The parties could not agree the final account, so Pegram started an adjudication. It maintained that it had been working on its own conditions, which did not contain an adjudication clause. Therefore, it said, the statutory Scheme applied and the parties should proceed under these rules.
Adjudication is supposed to be quick and inexpensive. Arguments about enforcement should not be necessary
But Tally said they'd been working on the basis of the JCT contract with the standard JCT adjudication rules. As the adjudicator had been appointed under the wrong rules, he had no jurisdiction.
The adjudicator noted the position that was being taken by Tally, but carried on regardless. He decided that Tally should pay £95,484 plus interest.
Tally did not pay and objected to enforcement on the same grounds as it had objected to the adjudicator – wrong rules, invalid appointment, no jurisdiction. It also tried running the argument that there was no contract for the work, but as it had previously argued that the JCT conditions applied, this did not impress Judge Thornton.
The judge went on to sort out which rules should be applied. Both parties had originally accepted that there was a construction contract. If there was a contract, but there was no clear adjudication clause, the contract did not comply with the Construction Act. In that case, the Scheme applied. So the adjudicator had been right to carry on under his appointment.
All this sounds like common sense, but teams of expensive lawyers have been needed to get there. The adjudication process is supposed to be quick and should be inexpensive. Arguments like this about enforcement should not be necessary.
John Redmond is head of construction at solicitor Osborne Clarke in Bristol.