Adjudicator's decisions, delay and the CIC Adjudication Rules

Epping Electrical Company Ltd v. Briggs and Forrester (Plumbing Services) Ltd

Practice Points

• An Adjudicator must not only 'reach' his decision within 28 days of the referral (as extended by agreement).  He must also give the decision to the parties within that time.
• If the decision is late, it is not enforceable.
• It is doubtful whether the CIC Adjudication Procedure complies with the 1996 Act, because it purports to make even late decisions enforceable.
• Because one part of the adjudication procedure may not comply, the whole is jettisoned and the Scheme for Construction Contracts applies.
• If you have a contract that adopts the CIC rules, safety suggests that you base any adjudication and referral notices on the statutory scheme as well as the contractual dispute resolution procedure.

A dispute arose between Epping and Briggs, which Epping referred to adjudication.  In terms of the contract the adjudication was to be conducted in accordance with the third edition CIC adjudication procedure. 

For one reason or another two extensions were given to the deadline in which the adjudicator was required to make his decision.  The finally agreed deadline was 21 November 2006.   In advance of the deadline the adjudicator advised that he would issue his decision following payment of his invoice.  The adjudicator issued his invoice on 21 November 2006 and requested payment before issuing his decision.  Both Epping and Briggs were of the view that the adjudicator was not entitled to insist on payment prior to issuing his decision.  Following some correspondence on the matter the adjudicator released his decision, making an award in favour of Epping. 

Briggs did not pay and Epping raised court proceedings to enforce the adjudicator's decision. 

Briggs defended the enforcement action arguing that the adjudicator had issued his decision after the agreed extended deadline, so it was a nullity.  Previous cases supported that argument but Epping thought they had a joker up their sleeve.  The CIC adjudication procedure provides (at paragraph 25) that a late decision shall be effective provided it is reached before the referral of the dispute to a replacement adjudicator.  Epping pointed out that no replacement adjudicator had been appointed in this instance and therefore the late decision of the adjudicator was still to be regarded as effective. 

The court did not agree. 

The court held that the adjudicator's decision was not enforceable.  Why?  The CIC Procedure was inconsistent with the adjudication requirements laid down in the Housing Grants Construction and Regeneration Act 1996.  The Act provides a mandatory time limit in which adjudicator's must issue a decision.  A failure to issue the decision within that time limit would render any subsequent decision a nullity.  Paragraph 25 of the CIC is at odds with the mandatory time limits set down in Act given that it suggests a late decision may be effective.  On that analysis the CIC Procedure fell to be replaced by the procedure and mandatory time limits provided by the Act and Scheme. 

As the adjudicator had not complied with the time limit in this case his decision was a nullity.

	Colin Fraser Partner Construction & Engineering Team			Craig Morrison Senior Solicitor Construction & Engineering Team
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