Using Part 8 Can Be Used To Challenge A Wrong Adjudicator's Decision: But Care (And Speed) Needed

It can be tempting for a "losing" party in adjudication to defend itself against the winner's enforcement proceedings by arguing that the adjudicator got it wrong. Hard as it is to ignore apparent errors, such parties must remember that adjudicators' decisions - even if wrong - are binding until a court or arbitrator gives a final decision. In the meantime, the losing party must live with the decision and pay up - or face enforcement and additional costs.

Adjudication is founded on the "pay now, argue later" "principle" under which an adjudicator's decision will be enforced (even if wrong) unless the adjudicator exceeded its jurisdiction or acted in breach of natural justice. In essence, a quick answer is more valuable than the right answer: adjudication is a quick and interim solution.

This occasional "rough justice" is the price paid by the industry to keep cash flowing and businesses in the black. Parties who think the adjudicator got it wrong, must take the issue to court or arbitration for a final decision on the issue if they cannot accept the adjudicator's decision. They can only resist enforcement (by applying for declaratory relief under Civil Procedure Rules (CPR) Part 8), if they can establish a breach of natural justice or an adjudicator acting beyond its jurisdiction.

However, parties who want a final court or arbitration decision on a specific legal or contractual issue do not always have to wait for the outcome of full-blown litigation or arbitration proceedings. The quicker, Part 8 procedure is also available to those who want a court decision on a discrete legal issue involving few disputed facts - such as the interpretation of a contract or a question of law.

Hutton guidance on using Part 8

Following a spate of parties using Part 8 inappropriately to resist enforcement applications, the Technology and Construction Court (TCC) issued guidance on the use of Part 8 in Hutton Construction Ltd v. Wilson Properties (London) Ltd [2017] EWHC 517 (TCC).

The Hutton guidance emphasised the Construction Act's aim to keep project cash flowing which is achieved in part by the binding nature of an adjudicator's decision.

Exceptionally, the court might agree to review, under the Part 8 procedure, an issue arising from an adjudicator's decision which involves a short and self-contained point, requires no oral evidence or other elaboration and is suitable for a relatively short interlocutory hearing. Hutton makes clear that:

the parties can...