Adjudication Practice Points Over The Past Eight Months

There have been a fair few interesting adjudication decisions over the past eight months, but probably the most important and noteworthy have been those concerning the adjudicator nomination process, staying enforcement on the grounds of "exceptional circumstances" and "manifest injustice", and adjudicator's errors. This 46th issue of Insight examines each of these decisions in turn and considers what can be learnt from them in practice.

Will there be a breach of the rules of natural justice if the adjudicator fails to notice a crucial document upon which the adjudication turns?

Broughton Brickwork Limited v F Parkinson Limited [2014] EWHC 4525 (TCC)

No, unless there was a deliberate decision on the part of the adjudicator to disregard it.

The decision

This was an application to enforce an adjudicator's decision21 that F Parkinson Limited ("Parkinson") should pay its subcontractor, Broughton Brickwork Limited ("Broughton"), the sum of £96,000, being the amount claimed in Broughton's interim payment application IA12 ("IA12"). Parkinson had not issued a Payless Notice in response to IA12 but maintained that this was of no concern since it had served Payless Notices in response to the subsequent interim payment applications IA13 and IA14.

Parkinson included copies of its Payless Notices for IA13 and IA14 in its bundle in the adjudication but failed to refer to them in its Response. The adjudicator accepted he should take into account developments in subsequent payment cycles for IA13 and IA14 and noted that whilst neither party had made submissions as to the validity of the Payless Notices for IA13 and IA14, he considered he had sufficient documentation to consider whether those notices were valid. The adjudicator concluded that the subsequent Payless Notices had been served out of time and made an award in respect of IA12 in favour of Broughton.

Once the decision had been issued, the adjudicator admitted he had not spotted the IA14 Payless Notice in the bundle, and said that had he been aware of it, he would have found in favour of Broughton as the Payless Notice in response to IA14 had been served in time. No payment was made by Parkinson and Broughton commenced enforcement proceedings.

Parkinson opposed enforcement on the grounds that (i) the adjudicator ought to have invited submissions from the parties regarding the validity of the Payless Notices for IA13 and IA14, and (ii) that in failing to appreciate the validity of the IA14 Payless Notice, the adjudicator had failed to consider the documents properly, which constituted a real and serious breach of the rules of natural justice.

In relation to the first issue, the Judge found that the adjudicator was not under a positive obligation to ask the parties to clarify their respective positions on the validity of the Payless Notices. The parties had lodged submissions and submitted all relevant material, and the adjudicator was therefore entitled to reach his decision based on the evidence and submissions...