It is a well-known principle that a party to a "construction contract" (as defined by the Housing Grants Construction and Regeneration Act 1996 (the Act)) may refer a dispute to adjudication "at any time".

It is equally well-known that the wording of this right is key – if it refers to a "dispute", and not "disputes", then a party may only refer only one dispute to adjudication. This is the wording used in the Scheme for Construction Contracts, as well as some industry rules, such as the TeCSA Rules. 

The Court has taken a fairly lenient approach to what a "dispute" is; however this has led to parties carefully drafting Notices of Adjudication to ensure they refer to a single "dispute".  Where a party was in any doubt, it would split the disputes and refer them separately by serving separate adjudication notices. This was normally done at the same time, under the same timetable and in front of the same adjudicator. Often, a responding party would also raise a counter-adjudication before the first adjudication had been decided. This was often to minimise the impact of an expected decision against it in the preceding adjudication. 

However, the recent case of Deluxe Art & Theme Limited v Beck Interiors Limited [2016] EWHC 238 (TCC) has turned this approach on its head. 

Deluxe Art & Theme Limited v Beck Interiors Limited 

The Scheme for Construction Contracts refers to a right to refer "a dispute".  Mr Justice Coulson has held this means that a party cannot refer more than one dispute to the same adjudicator at any one time – and it is irrelevant whether the disputes are in the same Notice of Adjudication. 

Three adjudications

Let's look at the facts of this case. Beck Interiors Limited (Beck) had been employed to refurbish a hotel. Beck in turn sub-contracted the joinery works to Deluxe Art & Theme Limited (Deluxe).  Various disputes arose between the parties and Deluxe referred three disputes to adjudication as set out below. On each occasion Deluxe applied to RICS who appointed Mr Matthew Bastone as adjudicator:

  • Adjudication 1: The adjudicator reached his decision on 10 July 2015, in favour of Deluxe. Beck paid the sums due under the decision.
  • Adjudication 2: Deluxe referred the second adjudication on 22 October 2015. The adjudicator reached his decision on 4 December 2015, in favour of Deluxe. 
  • Adjudication 3: Deluxe referred the third adjudication on 9 November 2015 (before the decision in the second adjudication). At this point Mr Bastone had two adjudications between Deluxe and Beck in front of him. The adjudicator reached his decision in the third adjudication on 11 December 2015, in favour of Deluxe. 

Beck refused to pay the sums awarded in adjudications 2 and 3. It claimed the adjudicator did not have jurisdiction because more than one dispute had been referred to him at one time. In particular, Beck relied on paragraph 8(1) of the Scheme which states:

“[t]he adjudicator may, with the consent of all the parties to the disputes, adjudicate at the same time on more than one dispute under the same contract.” 

Deluxe applied to the Court for summary judgment to enforce the decisions.

"More than one dispute"

Deluxe relied on the case of Willmott Dixon Housing Limited v Newlon Housing Trust [2013] EWHC 798 (TCC). Here, the contractor had commenced two adjudications on the same day, under the Construction Industry Council (CIC) rules. The contractor applied to the CIC for the appointment of adjudicators in both disputes and the CIC appointed the same adjudicator to both disputes. 

The Court held that, although a party could not refer more than one dispute to adjudication in the same Notice of Adjudication, there was nothing in either s.108 of the Act or the CIC rules to prevent a party referring two disputes at the same time before the same adjudicator, as long as they were in separate Notices. 

The Court in Beck considered the Willmott Dixon case, but disagreed with Deluxe. The Court held that the decision in Wilmott Dixon applied only where there was nothing in the rules of the adjudication preventing the same adjudicator deciding more than one dispute under the same contract, at the same time. There was no such provision in the CIC Rules. However, paragraph 8(1) of the Scheme did prevent this. This was incorporated as a contractual term, meaning that any of the parties could reasonably withhold their consent to the appointment of the same adjudicator in two related disputes. 

The Court stated it was following the decision of Pring & St Hill Limited v C J Hafner t/a Southern Erectors [2002] EWHC 1775 (TCC). In that case, the Court considered the application of paragraph 8(2) of the Scheme. This is similar to paragraph 8(1) of the Scheme, but instead applies to related disputes under different contracts. The Court in Pring decided that the adjudicator had no jurisdiction because the parties had not agreed to the same adjudicator adjudicating at the same time on related disputes under different contracts.

Following this reasoning, the Court refused to enforce the decision in adjudication 3, on the basis the adjudicator did not have jurisdiction to adjudicate on more than one dispute under the contract at the same time, without the consent of the parties (which Beck had not given). The Court did enforce adjudication 2, deciding that the adjudicator had jurisdiction when the dispute was first referred to him. The fact that a later adjudication was started before he reached a decision did not invalidate that jurisdiction. 

The Court specifically commented that this decision does not hinder the parties' right to refer a dispute to adjudication at any time; it only prevents them using the same adjudicator, if the other party has not consented.  

What Next?

It is common practice for nominating bodies to refer related disputes to the same adjudicator, without requiring explicit consent to this approach. This is logical as the adjudicator will have useful background information about the history between the contacting parties and it will be much more cost effective for the same adjudicator to be re-appointed.

Indeed the ICE application form specifically states that, if the application relates to a new dispute on a contract where an adjudicator has previously been appointed, the ICE may reappoint the same adjudicator unless both parties are in agreement not to reappoint.

It is not clear what would happen when a contract names a specific adjudicator. In that case, would a party not be able to refer a second adjudication until the first has been decided? What about a party wanting to raise a counter-adjudication? Must it also wait? That seems like a restriction on the right to adjudicate at "any time", although in Beck the judge explained it was not.

The key pieces of advice for a referring party following the Beck case are:

  • Check your adjudication rules. If it is the Scheme, or contains wording similar to paragraph 8(1) of the Scheme, then be wary of multiple adjudications or a simultaneous counter-adjudication. 
  • Get the consent of the other party to the appointment of the same adjudicator. However, be conscious of time limits and make sure your Notice of Adjudication does not expire. 
  • If the other party won't consent, then make sure the nominating body knows the same adjudicator must not be appointed. This is a direct contrast to the ICE's current position. Otherwise, the same adjudicator may be appointed and the nominating body will have to re-appoint. This can take time and may invalidate the Notice of Adjudication.