Stop right there!

Subcontractor E Squared very recently began an adjudication under the new act against Workplace Technologies. It very nearly didn't get off the ground. That's because Workplace reacted quite differently than most folk when E Squared called for the referee. (By the way, label this Case 17 in the list if you keep a record.) The different reaction was to dash immediately into court in an attempt to stop the adjudication by way of a court injunction. It was a clever idea, and it's worthwhile finding out what happened.

First, though, here is a bit of background. The Bluewater shopping centre is in Dartford, Kent.

It has a great deal of special cabling across the site, for which Workplace was the appointed installation contractor. A significant amount of the work was sublet under a sub-sub contract to E Squared. I think it is all to do with some swish lighting schemes. Their dispute is ordinary and legitimate. They can't agree on the value of an interim account. E Squared sent an application for payment; Workplace seemingly overlooked the need to send the important notice of sums due (the green notice), so E Squared said the application becomes the amount due.

That question is something for the adjudicator, John Riches, to deal with. But Workplace said that its subcontractor had no right to call for the adjudicator at all. Reason? It says the contract came into effect before 1 May 1998 and therefore too early for the Construction Act.

Now, it isn't unusual to challenge the adjudicator's jurisdiction. Usually, the challenger would continue to play adjudications while laying down a marker that it was all a waste of time. Ordinarily, the adjudicator has no power to decide his own jurisdiction and bind the parties to such a decision. My expectation is that Riches would only stop his work if it was plain and obvious that he had no right to be on the pitch. In these circumstances, the parties would adjudicate, then go to court for what is known as enforcement proceedings. Instead, Workplace said: "We want to stop all this before going to any expense." Almost as soon as Riches was appointed, Workplace began court proceedings.

Let me tell you how injunction proceedings work. Within a day or two (sometimes within hours), one party can go to the judge and argue for a temporary injunction. Special arguments have to be deployed. If successful, the court will expect the other party to turn up a few days later for what is called an interparties hearing. The court might then lift the injunction or keep it in place until a trial on the reason for an injunction.

Workplace reacted differently than most folk when E Squared called for the referee. It immediately dashed into court to stop it

But none of this is in the spirit of new adjudication. The referee and the parties only have 28 days to get around the buildopoly board and decide the dispute. It's no good having injunctions interfering with the process. On the other hand, you can see how sensible an injunction is if (say) it was plain to the court that the contract was not subject to new adjudication at all.

When Workplace went for its injunction on the Friday morning, the judge said he could hear the argument about whether the contract was pre- or post- the Construction Act on the next Tuesday. That's quick. The parties couldn't be ready by then. But they came on the Thursday. This is still lightning speed.

The upshot is interesting. First, the judge decided that the contract was signed after 1 May 1998. So, the adjudication was correct to proceed. More interesting is what was said about using an interim injunction to try to stop everything. The judge said that an injunction can only apply to protect someone when a legal or equitable right is threatened. Mere harassment by unfair or futile proceedings is not enough. It has to be harassment of a legal right. The key starting point is to identify some legal wrong, then go for an injunction. In this E Squared case, the court couldn't find one.

Perhaps that's right, but it would be interesting to take it on appeal. However, the judge also said that he wouldn't have given an interim injunction even if he had been entitled to. The reason is that it would have caused more injustice to stop the adjudication than to let it continue. This is called "the balance of convenience". An interim injunction would be interfering with what may be a valid right to adjudicate.