The recent case of Deluxe Art & Theme Limited –v– Beck Interiors Limited [2016] EWHC 238 (TCC) addressed the issue of multiple adjudications at the same time involving the same adjudicator. The message for those considering whether to bring multiple concurrent adjudications is to think carefully before doing so, and check whether it is permitted under the adjudication rules in question; if the Scheme for Construction Contract (the “Scheme”) applies, it is not permitted without the opposing party’s consent.

The facts

Deluxe Art & Theme Limited (“Deluxe”) was engaged as subcontractor by Beck Interiors Limited (“Beck”), who was the main contractor for refurbishment works at the Lanesborough Hotel, London. As the parties approached completion, Deluxe launched three adjudications in succession. The second and third of these (“Adjudications 2 and 3”) were the subject of Deluxe’s claim for enforcement.

In each case, the same adjudicator was appointed by RICS, in accordance with its policy of appointing the same adjudicator to deal with disputes arising from the same contract. In each adjudication, he decided in Deluxe’s favour.

On 22 October 2015, Deluxe started Adjudication 2, claiming an extension of time and associated loss and expense. On 4 November 2015 (before the adjudicator had made his award in Adjudication 2), Deluxe started Adjudication 3, requesting that Beck reduce the retention as practical completion had been reached. At that time, and subsequently in court, Beck objected to Deluxe referring two disputes concurrently to the same adjudicator on the basis that Part 8, Paragraph 1 of the Scheme provides:

The adjudicator may, with the consent of all the parties to those disputes, adjudicate at the same time on more than one dispute under the same contract.

As Beck had not consented to the adjudicator’s appointment for Adjudication 3, this was in clear conflict with the provisions of the Scheme.As Beck had not consented to the adjudicator’s appointment for Adjudication 3, this was in clear conflict with the provisions of the Scheme.

The decision

The court addressed the apparent conflict between s.108(2)(a) of the Housing Grants, Construction and Regeneration Act 1996 (the “Act”) and Part 8, Paragraph 1 of the Scheme. S.108(2)(a) provides that a party may “give notice at any time of his intention to refer a dispute to adjudication”. Part 8 of the Scheme, with its requirement to obtain consent from the parties to concurrent adjudications, would appear to impose a precondition on a party referring a dispute at any time.

Mr Justice Coulson held that the wording of the Scheme was clear; the adjudicator did not have jurisdiction to hear Adjudication 3. Despite the apparent conflict between the Act and the Scheme, Coulson held that the requirement for consent “does not unreasonably fetter or impinge upon the underlying right to adjudicate at any time”. However, the decision in Adjudication 2 still stood.

Counsel for Deluxe had argued that the judge should apply the reasoning in Willmott Dixon Housing Limited v Newlon Housing Trust [2013] EWHC 798 (TCC), in which the TCC held that a party can refer two disputes concurrently to the same adjudicator. However, in that case the contract incorporated the Construction Industry Council Model Adjudication Procedure (“CIC Rules”). By incorporating the CIC Rules, the contract excluded the Scheme. As the CIC Rules do not contain an equivalent requirement to Part 8 of the Scheme, two disputes could be concurrently referred to the same adjudicator.

Key take-aways

When dealing with multiple adjudications, the question of which rules apply should be at the forefront of your mind. Does the Scheme apply (in effect, the default provisions) or have the parties elected to use a different set of rules, or their own bespoke rules? Do those rules place restrictions on concurrent adjudications?

If the Scheme applies, the referring party should seek the responding party’s consent to bring more than one adjudication at the same time. If that consent is not forthcoming, as may well be the case, it might be wise to delay commencing a subsequent adjudication where one is already underway. If that were not possible, the referring party could consider appointing different adjudicators to hear the disputes, or flagging the issue with the nominating body before it makes its appointment. RICS follows a policy of appointing a single adjudicator to all disputes under the same contract, although they may now change that policy in light of this decision.

For those involved in drafting adjudication provisions, bear in mind that if you incorporate the Scheme wholesale, or if your provisions are not compliant with the adjudication provisions in the HGCRA, as amended, it will have this effect.

And finally…

The case contains some helpful guidance for practitioners on keeping paperwork to a minimum:

As practitioners experienced in this sort of work, I know [counsel] will have shared my consternation that a relatively simple enforcement dispute was the subject of no less than six full lever arch files. Four of these files were never referred to. It is exceedingly rare that any adjudication enforcement dispute requires more than one lever arch file of documents. The time is fast approaching when, unless the parties and their solicitors cooperate properly and comply with the TCC Guide, the court will simply refuse to hear cases with such promiscuous and unnecessary bundling.