Adjudication Update

In Elanay Contracts Ltd -v- The Vestry, HHJ Havery QC became the first judge at the TCC to comment on the applicability of the Human Rights Act to adjudication. Although the judgment is dated 30 August and so was given prior to the Act coming into force, his comments are still of great interest and value.

The defendant alleged that the short time limit within which the adjudicator had to complete the adjudication infringed the defendant's right under Article 6 of the Human Rights Convention to have a reasonable opportunity to present its case and thus to a fair trial. HHJ Havery QC rejected this argument noting that Article 6 does not apply to an adjudicator's award or to proceedings before an adjudicator because although they do represent a determination of civil rights, they are not a final determination. Adjudication is expressed in the HGCRA to be an interim remedy only.

The defendant sought and was given leave to appeal. Even if that right is not exercised here, it is highly likely that the point will be taken sooner rather than later.

In Maymac Environmental Services Ltd -v- Faraday Building Services Ltd, Maymac, having obtained an adjudicator's decision, sought to enforce it. The matter came before HHJ Toulmin QC. On the basis of a letter from Maymac, which was not put before the adjudicator, Faraday complained that there was no written contract and/or no contract and therefore that the dispute was not covered by the HGCRA.

Further, Faraday alleged that the contractual position advanced before the adjudicator was clearly not correct as a consequence of this letter. Maymac's position was that there was indeed a contract to which the HGCRA applied or alternatively, that Faraday should in any event be estopped from now maintaining that there was no contract since it had not raised the letter during the course of the adjudication.

The Judge found that on the facts there was a contract to which the HGCRA applied. He went on to say that in the event he was wrong, Faraday were estopped from now maintaining that the adjudicator's decision was not enforceable because there was no written contract. Any points which a party wants to make as to whether the adjudicator has jurisdiction or not, must be raised during the adjudication itself. Here, the failure by Faraday to bring the Maymac letter to the adjudicator's attention, which raised doubt as to the existence of an agreement, was crucial.

In Edmund Nuttall Ltd -v- Sevenoaks DC, the court confirmed (considering Bloor -v- Bowmer & Kirkland) that an adjudicator had the power to correct a decision after it was delivered, providing that correction was made within a reasonable time of giving his decision. Further it said that it was not an implied term of the contract between the parties that liquidated and ascertained damages could be deducted from a payment following a decision of an adjudicator where a claim to deduct those damages had not been made at the relevant time in accordance with the contractual machinery.

Natural Justice

As the Discain decision (reported in the last month's edition) made clear, adjudicators must take care to ensure that they do not breach the rules of natural justice. Often guidance can be found in tribunal or disciplinary hearing cases.

In Brabazon-Drenning -v- UK Council for Nursing, the Divisional Court held that the decision to proceed with a misconduct hearing without the appellant who had provided medical evidence that she was unfit to attend, was contrary to the rules of natural justice. Equally the Administrative Court held that Haringay LBC in two applications for judicial review bought by Age Concern and one other had adopted an unfair procedure in assessing whether to reduce the level of the applicants' state grants. Here the applicants were not given the opportunity to make adequate representations before the final decision was made.

Other Cases From the TCC

In London Electricity Plc -v- Quattro UK Ltd HHJ Seymour QC found that the defendant, who during the course of excavation work, cut live electricity cables, had been negligent. Following evidence from the Health & Safety Executive, repeat checks should be made with a cable detector when excavating around live cables. However, although the claimant was able to recover the cost of repairing the damaged cables, it failed in its claim for a contribution towards its overheads and to the cost of maintaining supplies to customers. These represented pure economic loss.

HHJ Seymour QC noted, when considering the various elements of the claimant's claim, that as the claim was one for damages for negligence, it was not possible to include in any award any sum, which represented what is not or could not be properly considered to be a cost arising directly out of the need to repair any physical damage. Any loss suffered by the claimant in the shape of the cost of maintaining supplies of electricity to consumers, represented pure economic loss, which was not directly connected with the physical damage caused by the defendant.

In Baxall Securities Ltd & Anr -v- Sheard Walshaw Partnership, HHJ Bowsher QC had to consider whether the defendant was liable for flood damage caused by the inability of a drainage system to cope with heavy falls of rain.

He held that SWP did owe a duty of care in respect of latent defects in the building where the claimant had no reasonable opportunity of inspecting. Thus SWP were not liable for flooding caused by a combination of blockages which were not their responsibility and the absence of overflows which could reasonably have been discovered by the clamant.

However SWP were liable for a flood caused by the absence of overflows and under-design on their part, which would not have been revealed by any inspection. Therefore on the ordinary principles of liability in tort, SWP were responsible for the whole of the loss arising from this second flood.

Health & Safety

In Parker -v- PVC Flooring Supplies Ltd, the claimant alleged that the company had breached item 13(4) of the Workplace (Health & Safety) Regulations 1992 by failing to display notices warning of the dangers of going up onto a roof. Here, the claimant had gone on to a roof to remove some cabling. No one had gone on the roof before. There was no rule preventing this, nor were there warning signs about the potential dangers. Yet the claimant knew that had he asked for permission, it would have been refused. He also acknowledged there was a risk since the roof was slippery and he was wearing unsuitable footwear. However, the claimant accessed the roof on a ladder supplied by the defendant. The only reason for the ladder appeared to be for the purpose of accessing the roof. Also, the claimant's actions were, in part, in the interests of the company since they had a security element. Therefore liability was apportioned on a 50/50 basis.

The amended Construction (Design and Management) (Amendment) Regulations 2000 came into force on 2 October 2000. Their purpose is to clarify that the legal duties on designers to build safety into a design applied not only to a design prepared by them personally, but also to a design prepared by an employee or other person under their control.

This followed a decision of the CA in January 2000 allowing an appeal by Paul Wurth SA against their conviction for contravening the CDM Regulations following a fatal accident during the installation of a conveyer at British Steel's Port Talbot works. The CA made it clear that the then wording of Regulation 13(2)(a) meant that no duty arose when a designer arranged for other people, including his/her employees, to prepare designs. The amendment now clarifies that designers do have a responsibility for health and safety on all designs that they directly, and their employees, prepare.

Other Cases of Interest

The decision of the CA in Rickards & Another -v- Jones is an example of just how far the courts are prepared to embrace alternative forms of dispute resolution. Here, in a case involving the alleged negligence of a firm of solicitors to ensure that a property was subject of NHBC cover and where the CA felt that the true issues had not been explored at trial, the CA agreed and decided that the appropriate course was to allow the parties to pursue ADR. The CA felt that even if ADR did not resolve the points at issue, it would at least aid the parties in determining some of the matters at issue.

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