Adjudication – More Than One Dispute?

It has always been the case that a party to a qualifying construction contract can only refer a single dispute to an adjudicator when operating pursuant to the provisions of section 108 of the Housing Grants, Construction and Regeneration Act 1996. If the adjudication was under a contractual provision rather than the Act and the supporting Scheme for Construction Contracts then it is possible that a provision in the contractual mechanism could act to allow more than one dispute to be referred at a single time. This comment is made in order to highlight that the provisions of a contract may act to change the statutory provisions albeit that most contracts follow the statutory requirements fairly closely.

As a result of this position there has been a lingering question about what constitutes a single dispute. There has been some earlier case law which touches on this issue but which does not give a detailed answer. That position has now been remedied by the judgment of Mr Justice Akenhead in the case of Witney Town Council v Beam Construction (Cheltenham) Limited [2011] EWHC 2332 (TCC) (12 September 2011).

The facts of the case describe an all too familiar scenario to most experienced construction professionals. The job for was the construction of a community hall. The job encountered some delays that the contractor contended constituted grounds for an extension of time; the Employer’s Agent (“EA”) did not agree and no extension was awarded. The contractor submitted valuations of various variations; the EA valued these variations at a lower value. The contractor claimed loss and expense related to the prolongation caused by the delays; the EA determined that no loss and expense was due. The contractor claimed that the Works had reached the state known as practical completion; the EA disagreed and continued to deduct the full retention percentage. Subsequently the employer terminated the contractor’s employment under the contract.

Beam commenced adjudication proceedings and included all of the above factors (plus extras such as interest) into its Referral Notice, requesting decisions in relation to each one from the Adjudicator. The Adjudicator awarded a sum to Beam and gave a Decision as to when the amount should be paid. Witney did not pay and so Beam started enforcement proceedings.

Witney’s defence was that the Adjudicator did not have jurisdiction as more than one dispute had been referred to him. To this end Witney argued that the extension of time argument was a dispute; the loss and expense claim was a dispute; the value of the variations was a dispute; and so no in respect of every question that Beam had asked the Adjudicator to decide.

In his judgement Mr Justice Akenhead reviewed the relevant previous cases and then brought all the threads together. His finding was that there was in essence only a single dispute, that being the sum of money that Beam were due under the Contract. The various issues which Witney had attempted to classify as single disputes were, in fact, simply threads of the overall dispute. In other words the determination of the extension of time, the loss and expense, the value of the variations and whether practical completion had been achieved or not were all factors which determined the payment due to Beam. As these issues were all related to this single factor then they were simply part of the one dispute. This clear and very readable judgment has provided us with a helpful summary of a point which has been argued many times by parties to adjudication references; hopefully this should remove another of those wasteful categories of jurisdictional arguments and allow parties and adjudicators to concentrate on the real issues at hand.