Construction adjudicators can only decide one dispute at a time under the Scheme for Construction Contracts (the “Scheme”) unless explicit consent is given by both parties, the Technology and Construction Court has ruled. The decision is likely to impact how adjudicators are appointed in the future.
Beck Interiors Ltd hired Deluxe Art & Theme Ltd to supply and install joinery items as part of a London hotel refurbishment. During the works Deluxe Art approached RICS to appoint adjudicators in relation to three notices of adjudication. The first was for variations in the contract and acceleration costs. The second related to an extension of time claim and the third to retentions. RICS appointed the same adjudicator to decide all three cases, in line with its policy.
The adjudications were heard under the rules of the Scheme and the adjudicator decided in favour of Deluxe Art in all three cases. Beck settled the first claim, but refused to pay the second and third. It argued that the Scheme does not allow multiple disputes to be referred to the same adjudicator without the consent of all the parties (although this is allowed in certain other adjudication frameworks, such the Construction Industry Council adjudication rules).
The Court agreed with Beck. It said that as Beck had not consented to the same adjudicator dealing with the third adjudication at the same time as the second, the third could not be enforced.
“This was a complex case which helped to clarify the Scheme rules and the necessity of consent in relation to this issue,” said James Burgoyne, Director – Claims & Technical, Brunel Professional Risks. “The Courts viewed paragraph 8(1) of the Scheme as significant rather than a mere technicality, which has implications for nominating bodies and contracting practice. In future, different adjudicators may need to be appointed if decisions in separate disputes are to be binding, which has cost and time repercussions. It may be that other adjudication rules will be chosen by the party drafting the contract in preference to the Scheme, and we often see consent to the same adjudicator deciding related disputes written into the terms of Appointment documents. Firms will need to be alert to these approaches if they wish to maintain a different position.”