As a supposed alternative to litigation, Adjudication has consumed a lot of Court time recently. The theme continues to be that the parties should “pay now and argue later” when it comes to Adjudication awards in one party’s favour. In other words, it is likely that the Court will uphold and enforce the decision of an adjudicator.
At the end of the adjudication process, the parties will have an Adjudicator’s decision which is generally binding unless and until it is challenged by subsequent litigation or arbitration.
Enforcement of, and challenges to, an Adjudicator’s decision generally takes place in the specialist Technology and Construction Court (the ‘TCC’).
Enforcing an Adjudicator’s Decision
If a party wants to enforce an Adjudicator’s decision in the TCC, it will generally need to issue proceedings seeking a monetary judgment, alongside an application for what is called ‘summary judgment’ i.e. the enforcement will be decided without a full trial.
The TCC aims to resolve enforcement issues quickly. A TCC judge should provide directions within three working days and the enforcement hearing itself should be listed within six to eight weeks of those directions being made.
The TCC discourages two parallel sets of proceedings where the ‘winning’ party commences adjudication enforcement proceedings, whilst the other commences proceedings to challenge the award.
Resisting an Adjudicator’s Decision
The grounds for resisting enforcement are limited. Those seeking to resist a decision must persuade the TCC that either (1) the Adjudicator had no jurisdiction to determine the dispute, or (2) the Adjudicator has materially breached the rules of natural justice.
Resisting on natural justice grounds is rarely successful. It succeeded last year in the case of AZ -v- BY (2023) EWHC 2388, in a relatively exceptional example of an Adjudicator considering inadmissible ‘Without Prejudice’ material in coming to his decision. However, it failed in Home Group v MPS Housing Ltd (2023) EWHC 1946 where the resisting party was unable to establish a breach of natural justice on the basis that 19 days was insufficient for it to respond to an Adjudication referral notice totalling 127 double sided lever arch files of documents.
There may be grounds for a party to apply for a stay of (not a defence to) enforcement proceedings, often attempted on the basis of another adjudication going ahead and / or the claimant’s financial position suggesting that it may be wound up after the money is paid. However, further cases last year such as Alun Griffiths (Contractors) Ltd vs Carmarthenshire County Council (2023) EWHC 2269 once again demonstrated limited scope for these arguments.
The above cases are a few of many examples of the TCC confirming the high bar for resisting adjudication enforcement including the common argument that there has been a breach of natural justice which requires such a breach to be material to the outcome of the adjudication. When considered alongside the TCC’s reluctance to stay enforcement of adjudication decisions, the emphasis remains that adjudication is an expedited – and difficult to challenge – process for the resolution of construction disputes.
Berry Smith is regularly instructed in enforcing, resisting or challenging Adjudication awards. Should you wish to discuss this with our construction team, please do not hesitate to contact us on 029 2034 5511 or at disputeresolution@berrysmith.com