Bryen & Langley Ltd v Boston (Part I)

The contention that adjudication generally or the adjudication provisions in JCT 98 in particular caused unfairness within the meaning of the Unfair Terms in Consumer Contracts Regulations 1999 was difficult to sustain

Technology and Construction Court
His Honour Judge Richard Seymour QC
4 November 2004
Contracts with homeowners are specifically excluded from the application of the adjudication provisions of the Construction Act. However, homeowners often unwittingly enter into standard forms of contract, such as JCT 98, for work on their properties that incorporate adjudication provisions. Sometimes they argue that the adjudicator did not have jurisdiction because such an incorporation is "unfair" within the meaning of the Unfair Terms in Consumer Contracts Regulations 1999.
Regulation 4(1) applies in relation to "unfair terms in contracts concluded between a seller or a supplier and a consumer and a consumer". Regulation 5(1) provides that a contractual term not individually negotiated is to be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract to the detriment of the consumer.
Even if a homeowner could be regarded as a "consumer", Judge Seymour was doubtful whether adjudication provisions could properly be regarded as "unfair". Adjudication was not a compulsory means of dispute resolution under the JCT forms of contract insofar as it was merely one option and if there was a dispute about the quality of work or the time taken to do it, adjudication might prove a quick and relatively cheap means for a "consumer" to obtain redress. The fact that Parliament did not see fit to include "residential occupiers" within the ambit of adjudication was not relevant to whether a term providing for adjudication was unfair if a "consumer" agreed by the contract to that term. In Director General of Fair Trading v First National Bank (2001) a term that in effect deprived a "consumer" of a statutory benefit without alerting him to the existence of that potential benefit was found not to be unfair. Also it was difficult to see that a contractual term whereby a "consumer" was bound to serve a notice of intention to withhold payment by a specified date so as to be entitled to exercise a right of set-off, at least if the specified date was fixed along the lines required by clause of JCT 98, created a significant imbalance in the parties' rights.
Advice Note
Judge Seymour's remarks show that jurisdictional challenges by homeowners on the ground that they did not realise that adjudication provisions were incorporated into a standard form of contract are becoming increasingly difficult to sustain.