Westminster Building Company Ltd v Beckingham
The provisions for adjudication in the contract between the homeowner and the contractor for work on his dwelling were not binding on him on the ground that they were unfair within the meaning of the Unfair Terms in Consumer Contracts Regulations 1999
20 February, 2004
WESTMINSTER BUILDING COMPANY LTD v BECKINGHAM
Technology and Construction Court
His Honour Judge Anthony Thornton QC
20 February 2004
The Construction Act was not applicable to the contract between the contractor and the homeowner insofar as it excludes from its ambit contracts with residential occupiers. Disputes were referred to adjudication on the basis of the adjudication provisions in the contract. The adjudicator decided in the contractor's favour which brought proceedings to enforce the decision. One of the grounds on which the homeowner opposed enforcement was that the adjudication provisions were not binding because they were unfair within the meaning of the Unfair Terms in Consumer Contracts Regulations 1999. The Regulations were applicable to the contract insofar as the homeowner was a consumer, acting outside his trade, business or profession. They provide that if a term is unfair it (1) was not individually negotiated (2) was contrary to the requirement of good faith (3) caused a significant imbalance in the parties' rights and obligations arising under the contract to the detriment of one of the parties as consumer or (4) unfair taking into account the nature of the goods or services for which the contract was concluded, the circumstances when the contract was entered into and all the other contractual terms. Judge Thornton held that the adjudication provisions were not unfair. They were couched in plain and intelligible language. They did not contravene the requirement of good faith insofar as they were decided upon by the homeowner's surveyor as his agent (and he therefore had available to him competent and objective advice as to the existence of the adjudication provisions before he entered into the contract). The contractor did no more than accept the contract terms offered by the homeowner's surveyor and had no reasonable need to draw to the homeowner's attention the potential pitfalls to be found in the adjudication provisions and in their operation during the course of the work. Finally they did not significantly exclude or hinder the consumer's rights to take legal action or other legal remedy or restrict the evidence available to him.
This case closes yet another potential loophole to the enforcement of decisions in "contractual" (as opposed to "statutory") adjudications. Adjudication provisions in contracts are not unfair within the meaning of the Unfair Terms in Consumer Contracts Regulations 1999.