Adjudication Matters December 2017: Festive Edition – Part 2

18th December 2017

Welcome to Part 2 of the festive edition of Adjudication Matters.

The results are in – thank you for all of your entries.

We will contact the winner direct regarding your prize which we hope you enjoy over the Christmas period!

We won’t keep you in suspense any longer! The answers are below.

Merry Christmas!

1. A party trying to recover its legal costs under the implied term of s5A of the Late Payment of Commercial Debts (Interest) Act 1998 can do so even if the implied term is caught by S108A of the Construction Act 1996. True or False? (1 mark)

False – Enviroflow Management Ltd v Redhill Works (Nottingham) Ltd (unreported)

 Enviroflow Management Ltd v Redhill Works (Nottingham) Ltd

2. The Construction Act provides that a construction contract must include a written provision giving the Adjudicator the power to correct clerical and typographical errors in his decision. What is the name of this rule? (2 marks)

The slip rule

3. A Pay Less notice must state that it is a pay less notice for it to be valid. True or False? (1 mark)

False – Surrey and Sussex Healthcare NHS Trust v Logan Construction (South East) Ltd [2017] EWHC 17 (TCC)

Surrey and Sussex Healthcare NHS Trust v Logan Construction (South East) Ltd [2017] EWHC 17 (TCC)

4. Under the Construction Act 1996, a “construction contract” means an agreement with a person for which of the following (3 marks):

• a. The carrying out of construction operations.
• b. Arranging for the carrying out of construction operations by others, whether under sub-contract to him or otherwise.
• c. Providing his own labour, or the labour of others, for the carrying out of construction operations.
• d. All of the above.

(d) All of the above – S104 Construction Act 1996

5. A party to a Construction contract always has the right to refer a dispute to Adjudication, whether these rights are in writing or not. In relation to a party’s right to refer disputes to adjudication, give 4 provisions that the Construction Act 1996 states should be included in writing in the contract (4 marks).

Any four of the following from S108 Construction Act 1996:

• The contract shall enable a party to give notice at any time of his intention to refer a dispute to adjudication.
• The contract shall provide a timetable with the object of securing the appointment of the adjudicator and referral of the dispute to him within 7 days of such notice.
• The contract shall require the adjudicator to reach a decision within 28 days of referral or such longer period as is agreed by the parties after the dispute has been referred.
• The contract shall allow the adjudicator to extend the period of 28 days by up to 14 days, with the consent of the party by whom the dispute was referred.
• The contract shall impose a duty on the adjudicator to act impartially.
• The contract shall enable the adjudicator to take the initiative in ascertaining the facts and the law.
• The contract shall provide that the decision of the adjudicator is binding until the dispute is finally determined by legal proceedings, by arbitration (if the contract provides for arbitration or the parties otherwise agree to arbitration) or by agreement.
• The contract shall also provide that the adjudicator is not liable for anything done or omitted in the discharge or purported discharge of his functions as adjudicator unless the act or omission is in bad faith, and that any employee or agent of the adjudicator is similarly protected from liability.

6. Under the Construction Act 1996, which of the following are not “construction operations”? Tick all that apply (3 marks):

• a. Drilling for oil or natural gas.
• b. The installation of artistic works.
• c. Painting or decorating the internal or external surfaces of any building or structure.
• d. All of the above.

(a) and (b) – see s105 Construction Act 1996

7. A provision in a construction contract making payment conditional on the payer receiving payment from a third person is ineffective, unless that third person is insolvent. True or False? (2 marks)

True – s.113 (1) Construction Act 1996

8. An adjudicator cannot obtain the assistance of a third party when making his decision. True or False? (1 mark)

False – John Sisk & Son Limited v Duro Felguera UK Limited [2016] EWHC 81 (TCC). An Adjudicator can obtain assistance from third parties, provided that he does not delegate his decision making function. In this case the adjudicator had validly obtained valuation assistance from a quantity surveyor.

John Sisk & Son Limited v Duro Felguera UK Limited [2016] EWHC 81 (TCC)

9. It is possible to accept an adjudicator’s agreement by conduct.True or False? (1 mark)

True – Christopher Linnett Ltd v Harding (t/a M J Harding Contractors) [2017] EWHC 1781 (TCC). Parties should therefore raise any objections to particular provisions in the adjudicator’s terms and conditions at the outset.

Christopher Linnett Ltd v Harding (t/a M J Harding Contractors) [2017] EWHC 1781 (TCC)

10. Does an adjudicator have jurisdiction to decide which parties have entered into a contract? (1 mark)

No – Dacy Building Services Limited v IDM Properties LLP [2016] EWHC 3007 (TCC) – The court said that it is necessary to make clear which parties are entering in to a contract as if there is any scope for dispute as to the identity of the parties then adjudication might not be an appropriate forum to resolve the dispute.

Dacy Building Services Limited v IDM Properties LLP [2016] EWHC 3007 (TCC)