Construction Adjudication: Breach Of Natural Justice

"It is only too easy in a complex case for a party to comb through the adjudicator's reasons and identify points upon which to present a challenge under the labels "excess of jurisdiction" or "breach of natural justice". So said Chadwick LJ in Carillion v Devonport [2005] EWCA Civ 1358. On the other hand, "save in the plainest cases" the judge went on, such a challenge "is likely to lead to a substantial waste of time and expense". A recent decision of the Scottish courts, again involving a Carillion company (against SP Power Systems), may encourage parties considering such a move to feel that the odds are now rather more in their favour.

Background

The case was one of two which were concerned with a dispute as to how works carried out by Carillion under a utilities framework agreement should be valued. The dispute was referred to adjudication and the adjudicator decided that nearly £3 million was due to Carillion. SP refused to pay and resisted enforcement on the ground that the method which the adjudicator had adopted to quantify Carillion's claim had resulted in a breach of natural justice. In SP's...