The Court of Appeal this week confirmed that an adjudicator’s decision will be enforced even if it contains an obvious blunder.
The landmark decision was welcomed by specialists as upholding the original wording of the Construction Act.
The judgment was on a case involving giant French contractor Bouygues and one of its subcontractors, Dahl-Jensen. In the original adjudication, Dahl-Jensen ought to have payed Bouygues £141 254. However, as the result of an arithmetical error, Bouygues was ordered to pay Dahl-Jensen £207 741. This decision was subsequently endorsed by the Technology and Construction Court.
Federation of Construction Specialists chief executive John Huxtable said the decision upheld the rough-and-ready nature of adjudication. He said: “Adjudication is a quick fix to protect cash flow – it has to focus on that. I am very pleased that the court is holding on to that line.
“My concern is that smart lawyers find ways of dragging these cases down into a long slow legal process. That would open up the floodgates.”
John Deacon, partner in solicitor Hammond Suddards Edge, who acted for Dahl-Jensen, said the decision was good news for the industry.
He said: “The Court of Appeal has supported the regime established by parliament. Adjudication is ‘quick and dirty’ but none the worse for it.”
Deacon said the judgment also clarified concerns about a new defence in adjudication cases.
A court ruling arising out of the adjudication between Herschel Engineering and Breen Property suggested that a losing party may be able to suspend payment if it can show that the claimant is threatened by insolvency.
Deacon said: “The loser has to make a claim with the winner’s liquidator which will then look at the merits of the claim. If there is no merit, the loser still has to pay. It’s good news.”
Simon Tolson, partner in solicitor Fenwick Elliott, said a lot of construction lawyers had expected the decision to be overturned.
Tolson said the decision would worry big contractors, but was concerned that small firms could be hit by the insolvency defence.
He said: “Clearly, this judgment indicates that the legal team of a defendant can look at the insolvency defence as a means of protecting their backsides. This is a side of the law that needs to be looked at.”