Under the Construction Act adjudication decisions are intended to be binding on an interim basis (meaning they can be finally determined in court or other proceedings). However in this case, the court decided the parties had agreed that any adjudication decision would be finally binding.
In somewhat unusual circumstances, the parties (residential occupier and contractor) entered into an adjudication agreement after a dispute had arisen, agreeing that the dispute would be referred to adjudication using the Scheme. The contract was a printed form of unknown origin which provided only that any dispute concerning amounts owed should be referred to an independent QS, but had no other dispute resolution provisions. As the contract was for a residential development, the mandatory requirements of the Construction Act, providing for adjudication to be binding on an interim basis only, did not apply.
When the dispute arose, the parties agreed that it should be referred to a QS, using the provisions of the Scheme "save that the decision of the independent structural quantity surveyor shall be binding on the parties".
Following an attempt to summarily enforce the decision, the matter came before the court again for a decision as to whether the dispute had been finally determined or could be the subject of court proceedings. The judge decided that, given the context in which the decision was expressed to be 'binding' i.e. as an effective derogation from the default position under the Scheme whereby decisions are only temporarily binding, it was the intention of the parties that the decision would have a permanently binding effect. The judge considered the application of the UCCTR but decided that the provision was individually negotiated and in any event not unfair.
The case highlights the importance of understanding all the ramifications of agreeing to an ad hoc dispute resolution procedure.
To view the full text of the decision, please click here.