There have been a number of cases where the court has been asked to decide whether an adjudicator has jurisdiction to deal with a dispute when a similar or the same dispute has already been decided by an adjudicator.
In the recent case of Jacobs UK Limited v Skanska Construction UK Limited , the parties did not get as far as an adjudicator’s decision. Skanska withdrew from the adjudication part way through because its counsel was no longer available and it was unable to serve its reply by an agreed deadline. It then started a second adjudication some months later containing the same claims as previously, although it had withdrawn part of a claim and narrowed various other issues.
Jacobs applied to court for an injunction to restrain Skanska from proceeding with the adjudication and a declaration it was entitled to be paid its costs of the first abandoned adjudication.
Issues for the court to consider
The court had to decide:
- Whether a party to an adjudication could withdraw from that adjudication unilaterally and then start a second adjudication in respect of substantially the same dispute;
- Whether the court could grant an injunction to restrain the second adjudication;
- Whether the court should grant an injunction on the facts of this case;
- Whether Jacobs was entitled to its wasted costs.
Skanska argued that there was no concept of abuse of process in adjudication and so a referring party was free to obtain whatever tactical advantage it could. Effectively this would mean that a referring party could keep starting and then withdrawing from adjudications as many times as it wished.
The judge’s decision
The judge reviewed previous case law from which he distilled the following principles:
- There was nothing in the Construction Act or the Scheme which prevents a party from withdrawing a disputed claim which has been referred to adjudication.
- A party can withdraw even after the referral, regardless of the motive for the withdrawal and that did not preclude the referring party from pursuing the claim again in a subsequent adjudication.
- The concept of abuse of process does not apply to adjudication.
Having said the above, the judge found that it did not follow the court would never intervene to prevent a party from proceeding with an adjudication – it could do so to prevent a party from starting or continuing with an adjudication which was unreasonable and oppressive. He was of the view that subjecting a party to serial adjudications could amount to unreasonable and oppressive behaviour but each case turned on its own facts.
In this case the judge found that Skanska’s withdrawal from the adjudication was unreasonable – the unavailability of counsel was rarely a good excuse, particularly when Skanska was the referring party who controlled the timing of the process. However, the conduct had to be both unreasonable and oppressive. The judge concluded that the inconvenience and additional costs here were not so severe or exceptional as to warrant an injunction. A large part of the work already undertaken could be reused in the second adjudication.
As far as the costs were concerned, the judge noted that the parties had entered into an ad hoc adjudication agreement because of an earlier disagreement about whether the contractual adjudication agreement complied with the Construction Act. In those circumstances he decided that Jacobs was entitled to its wasted and/or additional costs, if any, caused by Skanska’s failure to comply with the agreed adjudication timetable.
Points to note
Although the case does not create any new law, it provides a helpful reminder of the circumstances in which the court will intervene to restrain a second adjudication from being commenced following the withdrawal of an earlier adjudication. Whilst each case will be determined on its own facts, referring parties will need to be alive to the risk of needing to pay wasted costs in the event they withdraw from an adjudication before a decision is reached, particularly if they have agreed to an ad hoc adjudication process.
For more information about the issues raised in this article or to find out more about how the Construction team can help you please contact Rowan Turrall on 0118 952 7206 or email [email protected].
Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.