The first time that the courts were asked to consider the question of enforcement of an adjudicator’s decision arose only 10 months after the Housing Grants, Construction and Regeneration Act 1996 came into force. However, frequent users of adjudication will likely be familiar with the fact that a court will not interfere with an adjudicator’s decision except in very limited circumstances.
Lord Dyson explained in the first enforcement case before the courts (Macob Civil Engineering Limited v. Morrison Construction Limited) that the intention of Parliament “was to introduce a speedy mechanism for settling disputes in construction contracts on a provisional interim basis, and requiring the decisions of adjudicators to be enforced pending the final determination of disputes by arbitration, litigation or agreement”. Some 23 years after the 1996 Act came into force, it is an encouraging endorsement of the adjudication process that the courts continue to enforce decisions in the majority of cases.
The success of adjudication over the years has meant that more and more disputes have been referred to the process. Rather unsurprisingly, this has led to an increasing number of enforcement actions passing through the courts each year. The construction industry has become so accustomed to adjudicating that parties often progress to adjudication and inevitably on to an enforcement action without considering whether adjudication is really the correct forum for resolution of their dispute in the first place. Adjudication can be an effective tool for resolving disputes – but only when used appropriately.
If the positions of the parties are entrenched, and the relationships have long since broken down, it seems almost inevitable that the losing party will seek to find something in the adjudicator’s decision to resist enforcement. Referring complicated disputes to adjudication places considerable pressure on adjudicators to cover all the ground and reach a reasoned decision within 28 days. Adjudicators are usually willing to accept that challenge. Nevertheless, alternative ADR processes, such as mediation or structured negotiations ahead of arbitration or litigation, might be a more appropriate step given the court’s support for enforcing adjudication decisions, and the risk of wasting costs.
Enforcement actions might be seen by some as undermining the 1996 Act’s aim to provide a “speedy mechanism for settling disputes”. However, they are in fact integral to that purpose. Without a means of enforcing an adjudicator’s decision, the parties would remain in deadlock and the adjudication process would not achieve its aim.
Further, the courts do approach enforcement actions in the spirit of the 1996 Act by putting them on a fast track procedure where possible. In addition, the courts have generally refused to widen the grounds upon which an adjudicator’s decision can be challenged (parties remain curtailed to challenges on the grounds of a failure of jurisdiction or breach of natural justice), which provides further endorsement of the process. It is in fact very important that matters of jurisdiction and natural justice are regulated. Without this, adjudicators might be inclined to take less care over the way in which they conduct the adjudication process, resulting in a dilution of its integrity.
This article was first published in Construction Law on 4 May 2021.