Fraud And Adjudication Enforcement

The Current Landscape

The challenge for unsuccessful parties in adjudications is often to come up with ingenious arguments to avoid making payment pursuant to the adjudicator's decision. These arguments are either to the effect that the adjudicator's decision should not be enforced because it is invalid, e.g. because the adjudicator lacked jurisdiction, or because there are other reasons (e.g. the insolvency of the referring party) for not allowing it to be enforced straight away even if it is a valid decision.

The grounds on which the enforcement of an adjudicator's decision may be opposed are not closed, and the courts are constantly having to grapple with inventive arguments regarding enforcement. A decision made last Thursday by the Court of Appeal in Speymill considered such an argument, this one being based on fraud.

Summary of Facts

The employer engaged the contractor to convert a country house hotel into the employer's home. The contractor was engaged on JCT 98 terms (Private With Quantities) that incorporated the JCT adjudication procedure (which is not used in the current 2005 suite). As the contract was for the construction or alteration of a dwelling, the Construction Act did not apply, but the parties "opted in" by using the JCT 98 form. The contractor made various claims for payment, which were certified by the project architect. The employer paid the...