2020-05-12
Legal Articles

Adjudication, jurisdiction and injunctions: the courts' approach

Home / Knowledge base / Adjudication, jurisdiction and injunctions: the courts' approach

Posted by Stuart Thwaites on 01 July 2019

Stuart Thwaites - Building and Construction Lawyer
Stuart Thwaites Legal Director

Adjudications can be costly, and those costs are not recoverable from the other side. Where there are concerns that the adjudicator does not have jurisdiction to deal with the matter referred to him, there has been a growing trend to make an application to court for an injunction to prevent the adjudication from continuing.

Court refuses to grant injunction to stop adjudication

However, in what is a further sign of the courts’ disapproval of trying to involve them in ongoing adjudications, the Technology and Construction Court (“TCC”) recently refused to grant an injunction in circumstances where it was argued that the adjudicator had no jurisdiction.

The case was Billingford Holdings Ltd & BFL Trade Ltd v SMC Building Solutions Ltd and Nigel Anthony Dight [2019] EWHC 711 (TCC).

Billingford made an application to court for an urgent instruction to prevent the adjudication that had been brought against it from continuing.  The application was brought against both the referring party (SMC) and the adjudicator (Mr Dight).

Billingford had written to the adjudicator stating he did not have jurisdiction. When he replied saying he did have jurisdiction, Billingford made its application to court for the injunction.

Showing the speed with which the TCC can move, the judge dealt with the injunction application the very next day after it was issued. The defendant SMC was only notified of the hearing the night before – at 8.40pm.

Courts will rarely interfere in ongoing adjudications

The judge confirmed that the courts do have the power to intervene in an ongoing adjudication. However, the judge made clear that “It is only in extremely rare cases that the TCC will interfere by [granting injunctions or similar such orders] in ongoing adjudications.”

The judge made the point that adjudications should be allowed to continue without interference from the courts. Arguments about jurisdiction should normally only be taken up with the court at the enforcement stage, after the adjudicator has given his decision.

Policy reasons given for non-interference in jurisdiction challenges

A large part of this was for policy reasons, such as the fact that adjudication is designed to be quick and inexpensive.  There is no time within the short duration of an adjudication for the court to deal with challenges on jurisdiction without delaying the adjudication timetable. 

The judge in this case found that the arguments on jurisdiction put forward by Billingford were run-of-the mill jurisdiction arguments that did not justify the court’s intervention.  As a result, the injunction application was refused. Billingford would have been found liable for the responding parties’ costs of the application. 

Adjudication costs are irrecoverable

Unfortunately, the effect of this decision, and others like it, is that where a party believes that the adjudicator does not have jurisdiction, it has to incur the costs of engaging in that adjudication, albeit raising its jurisdictional arguments before the adjudicator. It will have to wait until the enforcement stage before addressing the court on the issue.

The drawback with this approach of the courts is that adjudication costs are irrecoverable. So even if the court finds that the adjudicator lacked jurisdiction and so his decision is unenforceable, the party will have lost its costs incurred in that adjudication.  Whilst it remains an option for a responding party in adjudication not to engage in the process at all, leaving it to argue at the enforcement stage that the adjudicator did not have jurisdiction, that is a high-risk option that is often not recommended.

About the author

Stuart Thwaites

Legal Director

Stuart specialises in construction and engineering work in relation to resolving disputes and in the drafting and negotiation of contractual documentation.

Stuart Thwaites

Stuart specialises in construction and engineering work in relation to resolving disputes and in the drafting and negotiation of contractual documentation.

Recent articles

30 July 2020 Rethinking the landlord / tenant relationship

We have been following the travails of the high street for over 12 months where changing shopping habits, business rates and rent increases have been contributing to a growing strain on many landlord / tenant relationships. The Covid-19 pandemic has not only turned a bad situation critical for many retailers and hospitality venues but has also turned the spotlight on the wider commercial sector too. Almost all businesses operating across the country have suffered financially to a greater or lesser extent as result of the economic downturn precipitated by the imposition of lockdown in March.

Read article
30 July 2020 Bankrupts fail in claim to have interests in land revested in them

The claim by Mr and Mrs Brake (Brake v Swift), heard in the High Court in May, to have a cottage and adjacent land revested in them under Section 283A of the Insolvency Act 1986, was set against a background of convoluted litigation extending over a number of years, described by Matthews HHJ as ‘complex’. The claimants had been made bankrupt in 2015 and the matter before the Court concentrated on whether or not the property concerned was, indeed, the claimants’ principal residence at the time of the bankruptcy.

Read article
29 July 2020 Remote witnessing of wills – a sign of the times

The law governing how a will is witnessed dates back to 1837 and for good reason. The requirement for two people (neither of whom can inherit from the will they are witnessing) to be physically present at the signing of a will is designed to, among other things, prevent fraud and the exercise of undue influence. That is, until the Covid-19 pandemic struck.

Read article
Contact
How can we help?
01926 732512
CALL BACK