The UK Technology and Construction Court has recently delivered a judgment that has the potential to increase the use of adjudication as a means of dispute resolution in the construction industry.
The decision addresses for the first time in the UK the question of when a collateral warranty given in connection with a construction project will itself be considered a 'construction contract' and thereby covered by the Construction Act (Housing Grants, Construction and Regeneration Act 1996, Part II). The decision indicates that some (but not all) collateral warranties will indeed be covered by the Act. Where that is the case, then either party to the warranty will have the statutory right to refer disputes under it to adjudication and court proceedings may be stayed in favour of the adjudication process.
Click here to read more on the decision.