When the adjudicator “gets it wrong”, what should you do?
In this blog we look at a recent TCC decision with which we were involved concerning an important aspect of procedure following an adjudicator’s decision: Hutton Construction Limited v Wilson Properties (London) Limited (2017).
In Caledonian v Mar City (another FE case) the court decided, amongst other things, that where there was a key “short point of law” relied upon in reaching an adjudicator’s decision it may, in very limited circumstances, be appropriate for the court to deal with it as part of the enforcement proceedings without the need for separate proceedings to be issued.
It is often the case that a losing party in adjudication proceedings (the defendant) feels the adjudicator got it wrong. As many of you will know, in the vast majority of cases (“99 out of 100”) this simply is not relevant. The purpose of adjudication is that the paying party complies with the decision: “pay now, argue later”.
" It is often the case that a losing party in adjudication proceedings (the defendant) feels the adjudicator got it wrong. As many of you will know, in the vast majority of cases (“99 out of 100”) this simply is not relevant."
In spite of this, reliance on the approach adopted in Caledonian has become increasingly common. Accordingly, Mr Justice Coulson, the Judge in charge of the TCC, used the Hutton judgment to clarify the limited circumstances in which it may be used, and the applicable procedure.
The Hutton judgment guidance will be applicable where the defendant identifies a discrete, short point of law erroneously decided by the adjudicator which it feels brings it within the very narrow Caledonian exception, and so is minded to rely on the guidance given at paragraph 9.4.3 of the TCC Guide, and Caledonian judgment paragraphs 12–13.
In Hutton, Wilson sought to rely on paragraph 9.4.3 of the TCC Guide on the basis, it suggested, that a more informal approach was appropriate. However, there was no consent allowing the court to deal with the point as Hutton did not accept there was an error or a short point suitable for resolution at the enforcement hearing.
So what’s the current position?
Where a defendant feels there is a short point that can be dealt with at the enforcement hearing, but there is no consent by the other party for the court to deal with it in this way, the defendant should first issue a Part 8 claim setting out the declaration it seeks; Mr Justice Coulson referred to this approach as the “best option”. In the alternative, the defendant must, at the very least, provide a detailed defence and counterclaim in the enforcement proceedings, setting out the declaration sought.
The Hutton judgment makes clear that the guidance given in the judgment supersedes paragraph 9.4.3 of the TCC Guide. Hutton has provided an increased degree of clarity and certainty for those wishing to challenge an adjudicator’s decision that they feel is wrong. However, this short point of law option needs to be viewed very carefully given the court’s primary stance; where an adjudicator has decided the issue referred, and has acted in accordance with the rules of natural justice, the court will enforce the decision, even if the adjudicator is shown to have made an error.