Rogers modernised tenants' homes under a JCT80 standard form. Things didn't go to plan so Rogers compiled a loss-and-expense claim for delay and disruption. It banged in the claim at the end of the job.
Two years slipped by until the architect issued the final certificate. That was a wake-up call for the builder. First, the final certificate was for too little money, it said. Second, the JCT contract says that unless arbitration starts within 14 days of the final certificate, it is too late; the certificate is conclusive evidence of the account.
In went the notice of arbitration. The builder wanted to reserve its position and get on with arbitrating. The letter said: "As you are aware a dispute exists and it is our intention to refer this dispute to arbitration." Phew, just in time. On came the arbitrator. Rogers served its statement of case. It included claims of delay because of late information, delay because the employer allegedly failed to give possession on time, and ambiguity about "extra over" items in the bill of quantities. But, when that list was compared with the original two years before, there were new items.
Now for arbitration, or for adjudication, you first need a dispute. Moreover, you need a dispute that is already in existence before the start of the arbitration or adjudication. A mere claim is not sufficient to establish a complaint. It is no good sending me a letter complaining that I owe you money for alleged delays and immediately saying, "This is a dispute". It isn't. It is a mere claim.
It crystallises into a dispute when I have had a reasonable opportunity to consider the complaint, so I can "take a position". If I tell you to go to hell, ignore you or shilly-shally, the claim automatically metamorphoses into a dispute. Only then can you seek arbitration or adjudication.
Your claim becomes a dispute when I have had an opportunity to consider the complaint. Only then can you seek adjudication
In the Rogers case, the judge said the letter in response to the final certificate with the remark "as you know a dispute exists" was not sufficient to establish an across-the-board dispute over the contract. He wanted to see a notice that established clearly what was to be within the jurisdiction of the arbitrator. "Only matters specifically raised and already disputed could be validly referred," he said. Furthermore, the 14-day rule reigned. A judge would have a perfect right to reject a case if specific claims had not matured into a dispute on, or before, that period from the issue of the final certificate.
That judgment has been in my file for two years. I am trotting it out now because a lot of people are attempting to bring non-dispute issues to adjudication. Worse still, some adjudicators don't seem to understand that they have no power to adjudicate on issues that are mere claims rather than crystallised disputes.
Alternatively, challenges to jurisdiction at the outset of adjudication may regarded by adjudicators as a try-on by peeved respondents. Think again. What I call "threshold jurisdiction" arises only when a dispute has crystallised before calling for adjudication.
And if the respondent asserts that a claim has been made but it has not had a fair opportunity to consider the claim, take that remark seriously. If the notion that no dispute has yet arisen is frivolous, and it is obvious that the parties have taken positions or had time to, then press on. However, if the idea is arguable, examine it. Don't be tempted by your enthusiasm to earn fees from adjudication into giving the thumbs-up.
Tony Bingham is a barrister and arbitrator specialising in construction. You can write to him at 3 Paper Buildings, Temple, London EC4 7EY, or e-mail him on firstname.lastname@example.org.