Payment disputes often arise in the construction industry where claims are made with little or no supporting detail. If the dispute turns into an adjudication, a respondent will often cry foul and complain that the claim was so nebulous and ill-defined that a "dispute" had not arisen. Despite arguments over "nebulous and ill-defined" claims being made in adjudications, there was until very recently no court authority on how detailed or defined a claim must be before it can be adjudicated.
VGC Construction fell into dispute with Jackson Civil Engineering over its final account. The disputed payment application contained a line item for £300,000 entitled "delay and disruption" without any further detail. The dispute was adjudicated and a decision was made in favour of VGC.
In response to enforcement proceedings, Jackson argued that it was entitled to a £300,000 deduction against the adjudicator's decision because the "delay and disruption" claim was too vague and uncertain to be submitted to adjudication. The Court rejected this argument, holding that a one-line claim can provide a sufficient basis for commencing an adjudication, particularly if the surrounding circumstances show (as they did here) that the recipient had a fair idea of what the claim was about.
Jackson's second argument against the enforcement of the adjudicator's decision was that he had considered new information concerning the delay and disruption claim during the adjudication. VGC had provided a supporting calculation for its "delay and disruption" claim 10 days before the end of the adjudication. At the time, Jackson complained to the adjudicator and asked for the new information to be ruled "inadmissible". The Court found no merit in Jackson's objection. As Jackson had sufficient time to address the new information, there was no cause for complaint.
This case affirms the courts' robust and pragmatic approach to the enforcement of adjudicators' decisions. Parties who are faced with vague claims in adjudication would be well advised to address them as best they can rather than relying on technical points as to jurisdiction or natural justice.
Reference: VGC Construction Ltd v Jackson Civil Engineering Ltd [2008] EWHC 2082 (TCC)
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 09/09/2008.
