High Court’s health and safety ruling in IWGB case has ‘important whistleblowing implications’
Out-Law Guide | 01 Sep 2011 | 12:24 pm | 10 min. read
Since May 1998, parties to a construction or engineering contract in the UK have been able to appoint an expert in the subject matter as an adjudicator to help resolve a dispute. This process is known as adjudication.
Once an adjudicator has made a decision on a dispute, the parties are bound to comply with it. If one party does not comply with the adjudicator's decision the other party is entitled to enforce the adjudicator's decision in court -in other words, to seek a judgment from the court, ordering compliance with the adjudicator's decision. In England, adjudicator's decisions are usually enforced in the Technology and Construction Court (TCC) - a specialist branch of the High Court.
This guide explores the tactics and mechanics of getting adjudication decisions enforced, and resolving issues arising in adjudication proceedings, in the TCC. It looks at using the court process before, during and after adjudication.
As well as deciding when to go to court, you will also need to decide which procedural route you want to take: either proceedings under Civil Procedure Rules (CPR) Part 7 or CPR Part 8.
Part 7 is the conventional method of starting proceedings. Usually a conventional action between two parties can be expected to take a minimum eight to 12 months from service of proceedings to trial and judgement, although it frequently takes longer depending on the complexity of the issues involved.
In the standard procedure, the claim form and particulars of claim are served on the defending party within four months of issue. Acknowledgement of service is required within 14 days, and defence and counterclaim within 28 days. There are then rules concerning the delivery of documents, witness statements and experts' reports before the pre-trial hearing, trial and judgement.
However, the case might be decided earlier without needing trial in three types of situation:
Summary judgement will only be given if the court concludes that the other party has no real prospect of succeeding on its claims or defence. If the application fails to satisfy this test, the court will usually order that there be 'leave to defend' and the case has to go to full trial.
A claimant may use the Part 8 procedure where it seeks the court's decision on a question which is unlikely to involve a substantial dispute of fact.
A claim form is once again issued when using Part 8 procedure, but without a separate particulars of claim. The claim form must state:
The claimant must also serve all of its evidence at the same time as the claim form. Instead of serving a defence or counterclaim, the defending party must acknowledge service and serve its own evidence within 14 days. If it does not, it is not allowed to rely on any evidence unless the court gives permission.
Enforcement proceedings: section 9 of the TCC Guide is dedicated to the court's role in the business of adjudication, and in particular it sets out a special rapid procedure for enforcing adjudicator's decisions. The procedure is the same whether the adjudication arises under the HGCRA, a standard contract term or is simply being followed by the parties on an ad hoc basis.
Other adjudication business: it should be noted that the TCC Guide does not set out a full procedure to be followed for adjudication business other than enforcement application, but it recognises that such business will also need to be taken rapidly. Practitioners have been left to adapt or adopt the adjudication enforcement procedure to suit applications made in respect of other adjudication business they wish to bring before the court. It is not always the case that a case management conference will take place. It is increasingly the case that the judge will issue directions on paper as in enforcement cases, with liberty to apply.
Other adjudication business will normally involve applications for declaratory relief (sought under Part 8) arising out of the commencement of a disputed adjudication. These might concern:
It could also be appropriate to apply to court for a ruling on the effect of a contractual term or to determine whether or not a compliant withholding notice was served.
The effect of the court's judgment on issues such as these may be to 'stop' an adjudication from continuing. If, for example, the responding party in adjudication obtains declaratory relief from the court that the appointed adjudicator does not have jurisdiction, then any decision of that adjudicator will not be enforceable, and the adjudication ought to be discontinued. Adjudication enforcement proceedings normally seek a monetary judgement, so CPR Part 7 proceedings are usually appropriate. However, if the enforcement proceedings are known to raise a question which is unlikely to involve a substantial dispute of fact and no monetary judgement is sought, CPR Part 8 proceedings may be used instead.
What types of dispute are suitable for Part 7 and Part 8? Any claim for enforcement of an adjudicator's decision is appropriate for Part 7 and Part 24 summary judgement. Additionally, where there is a substantial dispute of fact, the case will be suitable for Part 7 – especially disputes concerning:
However, it should not be assumed that every Part 7 claim that relates to adjudication business will also be appropriate for Part 24 summary judgement. Cases which involve the issue of whether there was a valid contract, or cases in which the terms of the contract are in dispute, are likely to require a full trial.
Cases which are suitable for the alternative procedure in Part 8 include disputes as to:
Where enforcement proceedings have begun under the usual Part 7 proceedings, parties should avoid issuing competing Part 8 claims and should instead tailor the Part 7 procedure to deal with the various issues involved.
A further practical issue that arises in adjudication enforcement is whether some part of an adjudicator's decision can be enforced where another part of that decision has been tainted by lack of jurisdiction or breach of natural justice. The established view that decisions were not severable on enforcement has now been challenged.
In a case decided in 2008 Mr Justice Akenhead decided that an adjudicator's decision could be severable provided that two or more disputes had been determined and the successful challenge only affected one of those disputes. In the case, the contractor, Cantillon, claimed extensions of time and loss and expense for two separate periods of 13 and 16 weeks respectively. The employer company, Urvasco, successfully argued that the first of these claims could not be recovered because the additional works which caused delay had occurred during a later period than that identified by Cantillon, and the adjudicator awarded the employer costs for the later period. During the ensuing enforcement proceedings, Urvasco argued that the adjudicator had exceeded his jurisdiction and failed to comply with the rules of natural justice by awarding damages for delay during a period other than the specific 13-week period previously identified.
The judge outlined the following principles:
In this case the judge concluded that even if he had found there had been a breach of natural justice he would have enforced the unaffected remainder of the decision because there were at least two disputes, each of which related to different facts and were presented by the parties and determined by the adjudicator separately.
The effect of this decision was thought to be limited, as few challenges to adjudicators' decisions on grounds of natural justice succeed and it is rare for more than one dispute to be referred to adjudication. However, a further decision by the same judge has suggested that the concept of severability could have wider application than first envisaged.
In this case the contractor, Bovis Lend Lease, had brought a successful claim for an extension of time and consequent loss and expense. The employer, the trustees of the London Clinic, challenged the adjudicator's decision on both natural justice grounds - as they argued they had had insufficient time to deal with the claim - and jurisdiction. The judge rejected both of these arguments, but concluded that:
This was a significant decision because the employer had not suggested at any stage that the claimant had referred more than one dispute to adjudication. Further, this is a case where - had this been in issue - it is highly likely that the court would have concluded that only one dispute had been referred.
In other cases, losing parties have sought to achieve the effect of severance by seeking a Part 8 declaration that part of the decision was wrong in substance, in circumstances where the whole decision was made within jurisdiction, so that only the remainder is enforced. In 2009, in a case between Geoffrey Osborne Ltd and Atkins Rail, both parties had agreed that part of the adjudicator's decision was wrong. The losing party applied under Part 8 for a declaration that the adjudicator had had no jurisdiction to issue the decision and that he had erred in law and/or fact. The judge held that the decision was enforceable, but refused to order any money to be paid over on the basis that the adjudicator had been wrong to award the sum he did. The judge held that an adjudicator's decision could be enforced in part only if there is part of the adjudicator's decision that can be isolated and determined by the court, but he made no reference to the cases discussed above under severability.
However, later judgements have indicated disapproval of this approach. Where successful parties seek enforcement of a decision through Part 7 then, increasingly, the TCC will be prepared to award enforcement of part of that decision if the remainder is tainted providing that the individual parts of the decision can be clearly identified and dealt with separately. However, if the losing party seeks to challenge an adjudicator's decision by applying for a similar declaration under Part 8 it is less likely that party will be successful. The TCC will be slow to allow a party to escape enforcement by only arguing with a particular part of the decision.
High Court’s health and safety ruling in IWGB case has ‘important whistleblowing implications’