Adjudication Review, Spring 2018

Our latest adjudication review considers recent cases dealing with the adjudication timetable and extensions of time, the problems that arise when adjudicating parties are relying on an oral contract and declaratory relief applications.

THE IMPORTANCE OF COMPLYING WITH THE ADJUDICATION TIMETABLE

The Technology and Construction Court (TCC) has reminded parties - and adjudicators of the importance of engaging when asked for an extension of time and of complying with the adjudication timetable.

In Baldwin and another v. Pickstock Ltd [2017] EWHC 2456 (TCC), the claimant, Mr Baldwin (the adjudicator), had been appointed as adjudicator in an adjudication in which the defendant, Pickstock Ltd (Pickstock), had been the referring party. The adjudication was subject to the Scheme for Construction Contracts (England and Wales) Regulations 1998 (SI 1998/649) (the Scheme).

For various reasons, including a jurisdictional challenge, the adjudicator needed more time to deliver his decision. He asked the parties for various extensions on which there was correspondence from all involved. The responding party agreed to the final extension, to 7 June, but Pickstock (through its solicitors) remained silent. Pickstock's solicitors later advised that they could not get instructions on the extension request. Given the timing, the adjudicator stopped work before reaching a decision. He resigned on 9 June and claimed £28,303.92 for his fees from Pickstock.

In the subsequent TCC proceedings, the adjudicator's claim for those fees failed. The judge held that Pickstock had, by failing to respond to the adjudicator's extension request, effectively agreed to the 7 June 2016 extension for the delivery of the decision. Unfortunately, the adjudicator's resignation, coming two days after that deadline, was therefore ineffective: his position as an adjudicator had already lapsed on 7 June and he had lost the right to claim his fees.

There are lessons for both adjudicators and parties here.

Adjudicators must reach their decision within the timetable

Adjudicators are subject to an absolute obligation to reach their decision within the timescales permitted under the Scheme. They have no jurisdiction to extend the deadline without the express agreement of the parties.

The judge referred to Cubitt Building & Interiors Ltd v. Fleetglade Ltd [2006] EWHC 3413 (TCC) in which Coulson J stated that a decision given "out of time and without an agreed extension may well be a nullity", and a "failure to complete within the agreed period [represents] a complete failure on [the adjudicator's] part to discharge [his] functions at all".

In Baldwin, the adjudicator's terms and conditions enabled the adjudicator to resign "at any time" before reaching his decision if his jurisdiction was validly challenged. In such a scenario, he was entitled to his fees and expenses from the referring party. However, on the facts, "at any time" meant the adjudicator could only resign up to the time and date he was due to deliver his decision: that is, while he still had power to act as an adjudicator. After that date, his appointment lapsed and there was nothing to resign from.

The judge was slightly baffled as to why the adjudicator had not resigned before 7 June 2018 given what he knew of Pickstock's position. He did, however, note that Pickstock's conduct, through its solicitors, may have been designed to "run the clock down" towards the decision deadline - which he regarded as "reprehensible". The fact remained that, had the adjudicator resigned before midnight on 7 June, as he was entitled to do in the circumstances, then "the outcome would have been very different": he would have recovered his fees.

A party's silence, in the face of an adjudicator's request for an extension, can amount to agreement

In Baldwin, the latest extension agreed to (by implication) by Pickstock had been 27 May 2016. The adjudicator's further request for an extension to 7 June 2016 was needed partly because the adjudicator needed time to consider a further submission by Pickstock. Pickstock knew that and the court concluded it was therefore "incumbent on [Pickstock] to make its position clear by responding to [the adjudicator]". Without that response, the adjudicator was entitled to treat Pickstock's silence as agreement to the date of 7 June 2016.

Parties should endeavour to respond to requests for extensions and give reasons for any refusal in a timely fashion. Failure to do so may give rise to an inference that the failure to respond at all or adequately is a tactical manoeuvre to "run the clock down".

Practical points for adjudicating parties arising from Baldwin

Ensure you confirm any agreement relating to the adjudication timetable in writing. If you do not respond to an adjudicator's request for an extension, the adjudicator may, depending on the facts, be entitled to treat your silence as consent. An adjudicator does not have to press you for a response to an extension request. An adjudicator's entitlement to rely on silence as consent to an extension request will be stronger where...