Enforcing adjudication decisions – punishment of spurious defences

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Facts

AMD was carrying out work for Cumberland Construction on a hotel in London.  The parties fell out over the final account and after protracted correspondence the Claimant went to adjudication and was awarded £77,000.  Cumberland refused to pay, AMD issued enforcement proceedings in the High Court.  Cumberland’s defences were:

  1. no dispute had crystallised and therefore it was premature to start adjudication;
  2. Cumberland had asked for more particulars of the claim which had not been supplied; and
  3. the adjudicator had acted contrary to natural justice in requesting further information from the Claimant, and taking account of such information in his decision.

Held:

  1. There had been more than enough time for claims to be made and for the Defendant’s unwillingness to pay to become apparent. Thus a dispute existed.
  2. Defendants often seek to postpone payment by more and more requests for particularisation. Generally the Courts will regard this with scepticism.
  3. The adjudicator has a duty to seek any further information which he believes to be of assistance in reaching his decision, and is empowered by Section 108 of the Construction Act to do so.
  4. Accordingly Cumberland was ordered to pay up in full PLUS interest at 6% (about double the normal rate); and to pay costs on an indemnity basis.

Comment

The Judge remarked that the adjudicator’s Decision should have been honoured some time ago, and that most of the Defendant’s arguments were “hopeless”.  Mr Justice Coulson is a very senior specialist Technology and Construction Judge; he is clearly laying out a policy line that spurious excuses for non-payment of adjudication Decisions will be punished by additional awards in respect of both interest and legal costs.

For more information, contact Robert Langley on 0191 211 7957 or at [email protected].