Adjudicating Two Disputes at the Same Time, Unintended Consequences

Adjudicating Two Disputes at the Same Time, Unintended Consequences

Paragraph 8(1) of The Scheme for Construction Contracts (England Wales) Regulations 1998 as amended by The Scheme for Construction Contracts (England Wales) Regulations 1998 (Amendment) (England) Regulations 2011 (“the Scheme”) says;

“The adjudicator may, with the consent of all the parties to those disputes, adjudicate at the same time on more than one dispute under the same contract”. But what exactly does this mean? For many years adjudicators have had to wrestle with jurisdictional challenges where a Responding Party alleged that more than one dispute had been referred for a decision in contravention of paragraph 8(1).

If an adjudicator decided that more than one dispute had been referred to adjudication in the same adjudication then that was a problem. The practical answer, it was believed, was to encourage the Parties to reach an agreement for the Adjudicator to proceed to decide the two or more separate disputes at the same time, usually in exchange for an extended period for submission of the Response. If agreement could not be reached then the Referring Party was forced to issue separate notices of adjudication in respect of those separate disputes. It was believed that there was nothing wrong with this approach as a way forward. That is, until now.

The judgement handed down in Deluxe Art & Theme Ltd v Beck Interiors Limited [2016] EWHC 238 (TCC) now makes clear that paragraph 8(1) of the Scheme must be given a literal interpretation and an adjudicator cannot adjudicate two disputes at the same time, even if they are the subject of different notices and procedures, unless the Parties so agree.

This is an important decision and there are some unwelcome implications that arise from this judgement which Parties will need to keep in mind for future possible adjudications.

An Adjudicator Nominating Body (“ANB”) will usually look to appoint the same adjudicator in multiple disputes between the same Parties on the same contract. They do so because it is understood that an adjudicator that has already dealt with one dispute should be able to deal with further disputes between the same Parties on the same contract in a more timely and cost-efficient manner than a new adjudicator would. I am not sure that approach will change. However, as a result of this judgement, ANBs will have to take care not to nominate the same adjudicator where he or she is yet to issue a decision in a previous adjudication. It is noticeable that the ANBs have already started to amend their procedures for nominating adjudicators.

Although serial adjudications in which the same adjudicator is appointed are not prohibited, the reality is that they will have to be conducted “end on end” rather than simultaneously. In practice a Responding Party in one adjudication could prevent the same adjudicator being appointed in a follow-up adjudication by starting the follow-up adjudication prior to a decision being issued in the preceding case.

And what if the cases overlap? An adjudicator is bound by the decision of a previous adjudicator. Will this mean that Parties will rush to obtain a decision in order to gain a tactical advantage in another adjudication that is ongoing?

All this does is increase uncertainty and I can’t help but wonder if this is really what Parliament intended when drafting the Scheme. Perhaps an amendment is needed? We will have to wait and see if Parliament has an appetite for correcting the Scheme in order to address what appears to be an unintended consequence.

Peter Vinden is a practising Arbitrator, Adjudicator, Mediator and Expert. He is Managing Director of The Vinden Partnership and can be contacted by email at pvinden@vinden.co.uk.

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Peter Vinden

Peter is an experienced professional in the construction industry with particular expertise in quantity surveying and the commercial management of contracting organisations. 

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