Adjudication was introduced to enable parties in the construction industry to resolve their disputes in a quick and cost-effective manner. As George Boddy says, it stands in contrast to litigation or arbitration, where proceedings take far longer and are more costly.
Indeed, the speed of obtaining a decision is central to the concept and takes precedence over the “correctness” of the decision. Adjudicators’ decisions are usually upheld by the courts even where the adjudicator has made an error. The threshold to prevent enforcement where there has been an adjudicator error is a high one. As Chadwick LJ stated in Bouygues UK Ltd v Dahl-Jensen UK Ltd[1], “the need to have the ‘right’ answer has been subordinated to the need to have an answer quickly”. The original purpose of adjudication was, of course, to improve cash flow in the industry; it was not, according to Chadwick LJ, introduced to “provide definitive answers to complex questions”. In theory, this is mitigated by the temporarily binding nature of adjudicators’ decisions. If a party feels really aggrieved, then it is open to them to commence litigation or arbitration to overturn the adjudicator’s decision.
Given the need for speed, the adjudication process inherently involves tight timescales and short deadlines for serving submissions. Responding parties often have a maximum of 7 to 14 days to set out their case in full, and shorter timescales are common for any subsequent submissions, although in practice the statutory 28-day timetable is often extended by agreement between the parties. In any case, parties to adjudication are almost always required to prepare their cases with haste.
For referring parties, the opportunity to put an opponent under pressure by launching an unexpected adjudication is an important tactical device, particularly if it is suspected that the responding party is not well prepared or if its position appears poorly substantiated. In those circumstances, the referring party will want a tight timetable that affords the responding party as little time as possible to serve its submissions.
However, what happens if, after the timetable for the conduct of the adjudication is agreed or directed, the responding party fails to serve its submissions on time? What recourse does the referring party have if the responding party repeatedly breaches the timetable by serving its submissions hours or even days late, without warning or good reason? This would afford a responding party a significant advantage – more time – which it is not supposed to have; adjudication is meant to be quick.
In the context of litigation, if a party misses a deadline imposed by the court, that can carry serious consequences. The precise nature of those consequences will depend on the nature of the deadline that has been breached, but the party in default will likely have to apply to the court to seek relief and explain the reasons for its failure to comply.
The consequences of failing to serve a submission on time in an adjudication are potentially as severe. However, the severity of the consequences is likely to depend on the nature of the failure and the attitude of the adjudicator. Under paragraph 15 of the Scheme[2] rules, in the event that, without showing sufficient cause, a party fails to comply with any request, direction or timetable of the adjudicator made in accordance with his powers, fails to produce any written document or written statement requested by the adjudicator, or otherwise fails to comply with a requirement of the Scheme rules, the adjudicator has three options. They can:
- Continue the adjudication in the absence of that party or of the document or written statement requested;
- Draw such inferences from that failure to comply as the circumstances may justify; or
- Make a decision on the basis of the information before them, attaching such weight as they think fit to the evidence submitted outside of the period directed.
In other words, if a responding party repeatedly breaches an agreed timetable, then under the Scheme rules, the adjudicator has wide discretion as to how to proceed. We would suggest that the option chosen by the adjudicator will depend on the factual circumstances, including their view of the breach, the position taken by the referring party, the nature of the failure and whether there is a good (or any) reason for it.
Other adjudication rules contain similar provisions in circumstances where a party does not comply. For example, the TECSA rules permit the adjudicator to establish the procedure and timetable for the adjudication and “may proceed if one party does not participate or cooperate”.[3] The CIC Model Adjudication Procedure[4] gives the adjudicator complete discretion as to how to conduct the adjudication, to establish the procedure and timetable, and to proceed with the adjudication and reach a decision even if a party fails to comply with a request or direction of the adjudicator.
It seems that, by virtue of paragraph 15 of the Scheme, or the similar provisions in other adjudication rules, an adjudicator would be entitled to proceed to make their decision without considering a submission that one party has submitted out of time. However, in adopting such a course, the adjudicator would need to ensure that they are acting fairly between the parties and have taken into account the rules of natural justice. Whether such a course would amount to a breach of natural justice would depend on the surrounding circumstances. If, for example, a submission was only late by a matter of hours, then that is unlikely to cause the opposing party prejudice, assuming that the timetable can be altered or extended to accommodate any further submissions.
In circumstances where a submission is late by significantly longer – such as days or even a week – and there is no good reason for the delay, and the delay has caused considerable disruption to the timetable, then an adjudicator may well be entitled to proceed to make his or her decision without taking the late submission into account. Clearly, it will depend on the exact factual circumstances, but given the courts’ willingness to enforce adjudicators’ decisions and the high bar for claims of breaches of natural justice, we would expect a court to be sympathetic to the party seeking to enforce the decision.
This approach is evident from:
- GPS Marine Contractors Ltd v Ringway Infrastructure Services Ltd,[5] where Ramsay J held that if an adjudicator advises a party not to serve a submission and that party still serves it, the adjudicator is entitled to disregard the submission and will not be in breach of the rules of natural justice.
- The short shrift given by the courts to complaints by parties that they did not have enough time to respond. The courts have consistently rejected arguments from responding parties that they did not have enough time to respond, in cases such as CSK Electrical Contractors Ltd v Kingwood Electrical Services Ltd,[6] where the Court rejected the argument that a 28-day timetable was too quick.
- The courts’ general lack of sympathy with the argument that the referral notice is too large or too complicated to deal with in the time allowed. For example, in Home Group Ltd v MPS Housing Ltd,[7] Constable J rejected an argument by the responding party that dealing with a large referral consisting of 88 pages, five witness statements and over 2,300 other files in a period of 19 days amounted to a breach of natural justice.
In conclusion, if one party fails to comply with an adjudication timetable without good reason, there are options open to the other party and to the adjudicator. Given the trend in cases on breaches of natural justice, we would expect a court to be unsympathetic to a party that has failed to comply with an adjudication timetable without good reason.
[1] [2000] EWCA Civ 507.
[2] The Scheme for Construction Contracts (England and Wales) Regulations 1998, SI 1998/649.
[3] TECSA Adjudication Rules Version 3.2.3, 30 November 2023, paragraph 17.
[4] The Construction Industry Council Model Adjudication Procedure, fifth edition, paragraph 17.
[5] [2010] EWHC 283 (TCC)
[6] [2015] EWHC 667 (TCC).
[7] [2023] EWHC 1946 (TCC).
