Construction Disputes ' To Adjudicate Or Not To Adjudicate?

• Published date: 24 August 2021
• Subject Matter: Litigation, Mediation & Arbitration, Food, Drugs, Healthcare, Life Sciences, Real Estate and Construction, Arbitration & Dispute Resolution, Construction & Planning, Landlord & Tenant - Leases
• Law Firm: Shakespeare Martineau
• Author: Ms Jayne Meakin

Construction disputes

In most construction disputes there is a familiar proposition that when seeking to settle a dispute, adjudication tends to be a preferred route as it is quicker and cheaper than court proceedings.

However, in a recent case of Toppan Holdings Ltd and Abbey Healthcare (Mill Hill) Ltd v Simply Construct (UK) LLP [2021] EWHC 2110 (TCC) the Technology and Construction Court (TCC) has clarified the entitlement to adjudicate according to a collateral warranty.

What is adjudication in construction?

Adjudication in construction is a faster and less formal route of dispute resolution than resorting to relatively slow and expensive court proceedings.

The case - Toppan Holdings Ltd and Abbey Healthcare (Mill Hill) Ltd v Simply Construct (UK) LLP

The collateral warranty in question was to Abbey Healthcare, a tenant who had taken a long lease on a property built by Simply Construct.

It was executed four years after practical completion and eight months after remedial works had been carried out by another contractor.

Following an adjudication, Simply Construct resisted enforcement on the grounds that Abbey's warranty was not a 'construction contract' and therefore the adjudicator had no jurisdiction. The TCC agreed, although this is the first instance and may be subject to appeal and change.

Critically, the TCC held that whilst the warranty was drafted to state that Simply Construct 'has performed and will continue to perform diligently its obligations under the Contract', the reality was that the works had already been completed and, even latent defects had been remedied by other contractors.

Therefore this particular warranty could not be a construction...