Stuck to your guns?

The recent decision of Judge Seymour in RG Carter vs Edmund Nuttall has caused a flutter in the world of adjudication. Unless altered on appeal it is likely to present adjudicators with some problems.

Carter was the main contractor on a project in Norwich. It engaged Nuttall as subcontractor for the concrete works. Delays occurred and Nuttall sought extensions of time and payment of loss and expense. In May 2001, Nuttall sent details of its claim, which totalled £1.98m. This became known as "the May claim". It was supported by an appendix listing a large number of occurrences. Those that were said to have caused delay were identified, along with the amount of delay caused. The sums claimed were split into headings such as off-site costs, overtime, disruption and so on.

In correspondence between August and October 2001, Carter rejected Nuttall's claims almost entirely. In December, Nuttall's solicitor served a notice of adjudication. The relief sought was a declaration that Nuttall was entitled to the extension previously claimed and an award of £1.48m, or such other extension and sum as the adjudicator might consider appropriate.

The notice of adjudication was followed by a referral notice, accompanied by a report by a Mr Caletka. This sought to justify the extension asked for in the May claim, and demanded payment of £1.25m. Although the same extension was sought, the sum claimed had changed again. More significantly, the detailed back-up in the Caletka report was very different from that in the May claim. New occurrences were listed and new causes of delay identified. Occurrences that had been relied on as causing delay were abandoned, and not only was the money different, but so was the breakdown.

An absolute bar on new arguments and evidence seems unduly restrictive. Guidance is needed

Carter objected to the adjudicator considering the Caletka report on the basis that it was a new claim. However the adjudicator decided that it was appropriate for him to base his decision on it and proceeded to do so. He awarded a substantial sum to Nuttall, who sought to enforce the award. Carter resisted this on the grounds that the adjudicator had decided something that had not been referred to him for decision; in other words, he had no jurisdiction to make the decision he did.

The judge agreed with Carter. He held that the dispute that had been referred to adjudication was the May claim. The Caletka report was significantly different from the May claim – indeed, it was dated after the notice of adjudication.

The judge said that, in order for a dispute to arise, "there must have been an opportunity for the protagonists each to consider the position adopted by the other and to formulate arguments of a reasoned kind". He concluded that what constitutes a dispute is not only a claim that has been rejected but "the whole package of arguments advanced and facts relied upon". This means that a party can refine its arguments and abandon weak points, it cannot abandon wholesale facts and arguments previously relied on and advance new ones. The judge concluded that the Caletka report was not part of the dispute referred to adjudication and that the adjudicator had acted outside his jurisdiction.