Adjudication is a statutory dispute resolution procedure for the construction industry, introduced by the Housing Grants, Construction and Regeneration Act 1996 as amended by the Local Democracy, Economic Development and Construction Act 2009 (“the Act”).
Question: Failure to comply with adjudication
Suppose that a referring party is successful in adjudication proceedings and the adjudicator has given a declaration that the responding party shall pay the referring party within seven days of his/her decision a sum of money, what can/should the referring party do if the responding party fails to comply with the decision and does not make payment to the referring party of the sum of money?
Answer Enforcing an Adjudicator's Decision
The referring party can/should apply to the Technology and Construction Court (“the TCC”) to enforce the adjudicator's decision. Generally, the TCC will enforce the adjudicator's decision unless the adjudicator plainly had no jurisdiction or there has been a material breach of the rules of natural justice.
Section 9 of the TCC Guide sets out the procedure for enforcing an adjudicator's decision as follows:
- In this example, the enforcement proceedings seek a monetary judgment so the referring party will need to commence CPR Part 7 proceedings.
- To commence these CPR Part 7 proceedings, the referring party will need to file a claim form and particulars of claim with the court.
- The claim form should identify the construction contract, the jurisdiction of the adjudicator, the procedural rules under which the adjudication was conducted, the adjudicator's decision, the relief sought and the grounds for seeking that relief.
- The particulars of claim will provide details of the claim.
- The claim form and particulars of claim will be accompanied by an application notice that sets out the procedural directions that are sought.
- The application will seek an abridgement of time for the various procedural steps (e.g an order that time for the responding party to file its Acknowledgment of Service be abridged to 4 days), and summary judgment under CPR Part 24.
- The application should be accompanied by a witness statement setting out the evidence relied on in support of both the adjudication enforcement claim and the associated procedural application.
Once you have filed with the court the aforementioned documents, a TCC judge will ordinarily provide directions in connection with the procedural application within 3 working days of the receipt of the application notice at the courts.
The court order will include directions from the judge which will typically deal with the following:
- the abridged period of time in which the defendant is to file an acknowledgement of service;
- the time for service by the defendant of any witness statement in opposition to the relief being sought;
- an early return date for the hearing of the summary judgment application and a note of the time required or allowed for that hearing; and
- identification of the judgment, order or other relief being sought at the hearing of the adjudication claim.
The court order will also include a direction providing that the claim form, supporting evidence and court order providing for the hearing are to be served on the defendant (the responding party) as soon as practicable, or sometimes by a particular date.
After the provision of the court order and exchange of witness evidence, but prior to the enforcement hearing, the Claimant (the referring party) will file and serve a hearing bundle containing the documents that will be required at the hearing.
The parties will also file skeleton arguments and copies of any authorities which are to be relied on (preferably as an agreed joint bundle), summarising their respective contentions as to why the adjudicator's decision is or is not enforceable.
Finally, the parties will, prior to the summary judgment hearing, both file and serve their statement of costs. This is to enable the Court to make a summary assessment of costs at the hearing.
The hearing will then take place where the judge will hear submissions from both parties before determining whether to enforce the adjudicator's decision. If the judges enforces the adjudicator's decision, then summary judgment will be entered for the Claimant in the sum claimed and the Defendant will be ordered to pay that sum by a certain date (usually within 7 days of the date of the order). There will also be an order as to costs.
If the Defendant fails to pay the sum ordered by the court by the deadline, there are numerous options available to the Claimant to enforce the court order including but not limited to:
- Writ of control and warrant of execution – Execution requires the issue of a court document (in the High Court [which the TCC is part of] a writ of control and in the County Court a warrant of control), which commands an enforcement officer to take control of and sell a judgment debtor's goods to raise funds to satisfy the judgment debt.
- Apply to the court for a charging order
- Apply to the court for a third party debt order
- Insolvency proceedings
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.