Following a wave of recent cases throughout the UK, the thorny topic of adjudication enforcement is once again making headlines.
According to the Adjudication Society and King's College London's 2024 report Construction Adjudication in the United Kingdom: Tracing trends and guiding reform, the TCC has issued 219 adjudication decisions since 2011. The report cites that of these, 77% enforced the adjudicator's decision in full. The report does not contain statistics for the equivalent courts in the UK as a whole, with the High Court of Northern Ireland and the Court of Session in Scotland omitted from its findings. However it does indicate that courts are significantly more likely to rule in favour of enforcement than against.
This is unsurprising, with the courts' approach clear from the outset. Dyson J, delivering his decision in the first ever adjudication enforcement action in 1999 (Macob Civil Engineering Ltd v Morrison Construction Ltd), dismissed the challenge on the basis of policy. Adjudication was intended to be a quick method of resolving disputes, which would necessarily result in an element of "rough justice". To allow the courts to distort this process would be contrary to the intentions of parliament.
The TCC in 1999 could not foresee the lengths that disgruntled parties would go to in order to resist enforcement. The grounds upon which parties may seek to resist enforcement will be familiar to most readers with any experience of construction disputes: (i) lack of jurisdiction of the adjudicator or (ii) a material breach of the rules of natural justice. A challenge to the adjudicator's jurisdiction must be made at the outset of proceedings and reserved if the challenging party continues to participate in the adjudication. A challenge on the grounds that the adjudicator breached the rules of natural justice however can only be made once the decision has been issued.
An increasingly hardline approach is emerging from UK courts against those seeking to resist enforcement.
In October 2024 the TCC issued its judgment in Essential Living (Greenwich) Limited v Conneely Facades Ltd. In this case, the court heard arguments by Conneely that the adjudicator's decision was a material breach of natural justice. Conneely argued that in his rejection of its disclosure application the adjudicator had made a determination about the strength of Conneely's case and was accordingly biased. The court found that the adjudicator was entitled to regard the application as he did, and that it was open to both parties to make submissions on the substance of the dispute and the need for disclosure. It ruled that Essential was entitled to summary judgement and in addition that it was appropriate to award indemnity costs. Delivering his judgment Mr Adrian Williamson KC (sitting as Deputy High Court Judge) criticised the waste of court time; arguments on "unmeritorious points"; and "that the defendant has chosen to make an attack upon the way in which this very experienced adjudicator went about his dues, which seems to be to have been wholly inappropriate." The Court of Session in Scotland issued a strikingly similar decision the following month.
Similar arguments were deployed in 2023 in Bexhill Construction Ltd v Kingsmead Homes Ltd, where Kingsmead argued before the TCC that the adjudicator's decision did not address an argument in its rejoinder. HHJ Kelly found that there was no evidence that the adjudicator had failed to consider Kingsmead's submissions. In a similar situation to Essential, Kingsmead had the opportunity to address Bexhill's subsequent submissions but elected not to do so. The adjudicator was not obligated to give reasons for his decision on every point raised.
Parsing an adjudication decision line by line searching for minor inconsistences upon which to mount such a challenge is now commonplace. This activity is not aways carried out in anticipation of a successful challenge, but as part of a process now effectively weaponised to force settlement with the ostensibly successful party. In the case of payment disputes this course of action operates as a chokehold on cashflow and can result in the downfall of a party with the victorious decision in its hands.
Essential Living and Bexhill are but two examples among many, and serve as a warning to the common tactic by the unsuccessful party in an adjudication of seeking to mount a challenge to enforcement by technical arguments on the minutiae of the adjudicator's decision. Whilst this has been utilised most commonly as a tactic, the courts are showing an increasing intolerance to this approach. As the courts have shown, they are quite prepared to reprimand the unsuccessful challenger by means of expenses where necessary.
