Parties to oral construction contracts entered into since 1 October 2011[1] have the right to refer a dispute under such oral contract to adjudication.  However, ever since this extension of the 1996 Construction Act to oral contracts was first proposed, questions have been raised in relation to the limits of an adjudicator’s powers and jurisdiction in respect of such disputes.  The recent case ofWycombe Demolition Ltd v Topevent Ltd [2015] EWHC 2692 (TCC) provides some guidance and confirms that an adjudicator will have considerable latitude to draw his or her own conclusions as to the nature and terms of the contract.

Topevent Ltd (“the Employer”) appointed Wycombe Demolition Ltd (“the Contractor”) to carry out demolition works.  Although neither party disputed the existence of the contract, they could not agree when it was made.  

A dispute arose over a number of the Contractor’s unpaid invoices and the Employer contested that some of the works had not been substantially completed.  An adjudicator decided that the Employer should pay the Contractor £144,000.  The Contractor issued proceedings in court for the enforcement of the adjudicator’s award and the Employer sought to defend the claim for enforcement by arguing a number of points.

The Employer’s first two arguments (that the adjudication concerned more than one dispute and that the adjudicator breached the rules of natural justice) were rejected.

The Employer’s third argument was considered the most compelling, but ultimately it was also rejected. The Employer argued that the adjudicator had proceeded on a frolic of his own when determining the final valuation because he did not rely on submissions from either party, but rather interpreted the facts for himself (and thus the parties did not have an opportunity to comment upon his findings).

The Court held that an adjudicator has a multitude of options when determining the value of the works and can only do the best with what he or she is provided. Furthermore, the adjudicator is not bound to accept the figures advanced by either party and may, as in this case, draw his or her own conclusions.

This case confirms that an adjudicator will have considerable latitude to draw his or her own conclusions as to the nature and terms of the contract, even where there is no written contract and therefore there is inherent uncertainty. Accordingly, a party to such a contract should be concerned to provide the adjudicator with as much information as is possible in support of its position regarding the nature and terms of the contract.