Updated Jackson ADR Handbook published

A new (second) edition of the Jackson ADR Handbook was published on 8 September 2016.

The original edition of the Handbook (see our bulletin here) was published in 2013 as one of the suite of measures recommended by Lord Justice Jackson in his 2010 Review of Civil Litigation Costs.  That Review endorsed a "serious campaign" to ensure that lawyers, judges and the public were alerted to the benefits of ADR in resolving disputes, and recommended that an authoritative handbook be prepared to provide practical and concise guidance on all aspects of ADR, and in particular the use of ADR in relation to civil claims in England and Wales.

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UK: Supreme Court clarifies time limits for court proceedings following adjudication

We previously reported (here) on the Court of Appeal’s decision in Aspect Contracts (Asbestos) Ltd v Higgins Construction plc, considering an important issue regarding the limitation periods applying in a situation where a party makes a payment pursuant to an adjudication decision and subsequently seeks to recover that payment through court proceedings.

That decision was subsequently appealed and the Supreme Court has now handed down its judgment in the case, upholding the Court of Appeal’s decision: Aspect Contracts (Asbestos) Ltd v Higgins Construction plc [2015] UKSC 38Michael Mendelblat of our Construction team considers the Supreme Court’s decision below. Continue reading

Upcoming webinar – Making the best use of Dispute Boards

We have previously reported (here) on a recent spate of court decisions in several jurisdictions which examined contractual clauses providing for the use of Dispute Boards as a dispute resolution procedure.

On Thursday 12 March 2015, at 9.00am (GMT), Mark Lloyd-Williams and David Nitek, Partners in our Construction and Engineering team in London, will deliver a webinar on ‘Making the best use of Dispute Boards‘.

Dispute Boards offer great flexibility – they may be appointed either as and when disputes arise, or for the life of a project; and can give either a (temporarily) binding decision, or a non-binding recommendation.  The webinar discussion will consider the circumstances in which Dispute Boards can add value to projects (with a focus on construction and engineering projects), techniques for maximising the advantages they can offer and the enforcement of Dispute Board decisions that are binding.

This event is part of our series of “Soundbite” webinars,  designed to update Herbert Smith Freehills LLP clients and contacts on recent developments without having to leave their desks. Once you have registered, the webinar can be accessed “live”, with a facility to send in questions to the speakers in real time, or you can listen to a recording after the event. The webinars, both live and archived, also qualify for one CPD point.

If you would like to register for the webinar, or to obtain a link to the archived version, please contact Jane Webber.

 

UK: Adjudicator’s decision not enforced due to a party’s misrepresentations in the appointment process

In a landmark decision, the Technology and Construction Court has refused to enforce an adjudicator's decision because the adjudicator had been invalidly appointed, due to misrepresentation by one party on its application to the appointing body.  The decision is a clear warning to parties that objections to adjudicators must be made honestly and not for ulterior motives:  Eurocom Ltd v Siemens plc [2014] EWHC 3710 (TCC).

In essence, the court accepted that the party's indication that various potential adjudicators had a conflict of interest was false or reckless and was designed for the purpose  of excluding those that the party did not want to be appointed    Although the courts have previously warned against improper interference with the adjudicator nomination process, this is the first decision to give that principle practical effect by refusing to enforce an adjudicator's decision on the basis of such conduct.

Read more on the decision in our Construction team's bulletin 'Appointing Adjudicators – The Limits of Objection'.

UK: Latest judgment illustrating the limited scope for challenging an adjudicator’s decision

It is well established that the courts will not review the merits of an adjudicator’s decision and will only set aside such a decision in the relatively rare cases where it is found that:

  • the adjudicator had no jurisdiction to make the decision (including because the decision made did not determine the dispute that had been referred to the adjudicator); or
  • there was a serious breach of the rules of natural justice (including the right to a fair hearing, by an impartial decision-maker).

As has been recognised in numerous judgments, any other approach would undermine the purpose of the adjudication regime, which is to provide a swift and binding (albeit provisional) resolution to a dispute and prevent ongoing argument/appeals de-railing contracts.

In a recent decision, the Scottish Court of Sessions rejected various challenges to an adjudicator’s decision which alleged that the adjudicator (i)  did not have jurisdiction to make the decision he did because he had adopted an overly restrictive review of his task by failing to entertain a relevant line of defence; and (ii) had unfairly failed to give the parties an opportunity to comment on factors taken into account in the decision.

The decision is a good illustration of the courts being astute to reject parties’ attempts to challenge the merits of adjudicators’ decisions by seeking to shoehorn the complaint into one of the above available grounds for challenge.

Bouygues E & S Contracting UK Ltd v Vital Energi Utilities Ltd [2014] CSOH 115. Continue reading

ADR Practical Guide No.1 : Common ADR processes – a snapshot

Herbert Smith Freehills has launched the first in our series of ADR Practical Guides, designed to provide practical insights into various processes falling under the banner of ADR, with a particular focus on mediation.

The first guide provides a snapshot of some of the more commonly used ADR processes, highlighting the main advantages and disadvantages of each.  The processes covered include:

1.  Mediation
2.  MedArb / ArbMed
3.  Early neutral evaluation
4.  Expert determination
5.  Adjudication
6.  Baseball arbitration

Read ‘Common ADR processes – a snapshot‘.

UK: TCC decision underlines the importance of dispute resolution provisions being clearly incorporated in contractual documentation

The Technology and Construction Court has recently granted an injunction restraining an adjudication from proceeding, on the basis of a finding that the contractual provision relied upon to appoint the adjudicator did not in fact form part of the contract that governed the parties’ dealings.  As an adjudicator’s jurisdiction is rooted in the parties’ agreement, the lack of a valid contractual basis meant that the appointment had been a nullity: Twintec Ltd v Volkerfitzpatrick Ltd [2014] EWHC 10 (TCC).

The decision highlights the importance of parties ensuring that any dispute resolution mechanism they intend to apply to their dealings is clearly incorporated in their contractual documentation – including in interim documentation intended to be superseded by a more formal contract.

Michael Mendelblat and Rory Wilson consider the case. Continue reading

UK: Court of Appeal clarifies time limits for claiming repayment in adjudication

A recent Court of Appeal decision has clarified an important issue regarding the situation where a party makes a payment pursuant to an adjudication decision and subsequently seeks to recover that payment through court proceedings.

Under the relevant statute of limitations, any such court proceedings must be brought within a specified time (generally 6 years) from the date the relevant cause of action arose. However, there has been conflicting authority on whether the cause of action in such cases arises (and time therefore starts to run) at the time the payment was made or at the earlier time of the original breach or event that gave rise to the adjudicated claim.   The Court of Appeal has now confirmed that it is the former –  meaning that a paying party has up to 6 years from the date of payment to issue its own proceedings for repayment and does not need to take precautionary steps (such as seeking a negative declaration from the court) within the first 6 years of the original events giving rise to the dispute, as the lower court in this case had suggested.

Aspect Contracts (Asbestos) Ltd v Higgins Construction plc .  Read our Construction and Engineering team’s briefing on the decision here.

UK: Collateral warranties in construction projects may attract statutory adjudication rights

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.

Natural justice in adjudication

It is now well established that the courts will refuse to enforce an adjudicator’s decision if the manner in which he has gone about his task is obviously unfair[1].  Whilst the courts have deplored attempts to comb through adjudicators’ reasons to find flimsy grounds on which to present a challenge, there will be cases where a challenge is justified.  A recent dispute in the UK Technology and Construction Court was such a case: ABB v Bam Nuttall [2013] EWHC 1983. Continue reading