Such Other Sum As The Adjudicator May Decide – A Breach Of Natural Justice?

The Technology and Construction Court's decision in Clegg Food Projects Limited v Prestige Car Direct Properties Limited [2025] EWHC 2173 (TCC) serves as an important reminder of the limited circumstances in which a party can resist enforcement of an adjudicator's decision.

Background

Clegg Food Projects Limited (Clegg) was appointed as a contractor by Prestige Car Direct Properties Limited (Prestige) to undertake the construction of a leisure and retail centre.

A dispute arose between the parties in respect of the valuation of one of Clegg's interim applications for payment (the Application). The issue of particular relevance concerned the valuation of eight variations, which the parties agreed were changes to the original scope of works.

Clegg referred the dispute to adjudication and invited the adjudicator to determine that the valuation of the Application was £23,502,636.65 plus VAT – or, crucially, "such other sum as the adjudicator may decide".

In its Response, Prestige included a valuation figure that it invited the adjudicator to accept – or, crucially, "such other sum as the adjudicator may decide".

By way of his decision on 17 January 2025, the adjudicator gave his valuation of the works, which resulted in Prestige being ordered to pay Clegg the sum of £541,880.12.

In respect of the disputed variations the adjudicator applied his own "fair and reasonable" rates to determine the valuation of some of the items.

Prestige refused to make the payment in accordance with the adjudicator's decision, alleging that the adjudicator had committed a breach of natural justice by applying his own rates to the valuation exercise, and appearing to have used measurements that differed from those provided by the parties in order to reach his valuations.

Accordingly, Clegg sought to enforce the adjudicator's decision in the Technology and Construction Court.

Challenge to enforcement

Prestige sought to resist enforcement on the basis that there was breach of natural justice. Prestige referred to the fact that the adjudicator had used his own rates when valuing five of the eight disputed variations, and in some instances he took it upon himself to remeasure work in order to undertake a valuation – in each case without informing the parties of his intention to do so, thus failing to give the parties a chance to comment on his proposed course of action.

Prestige claimed that the breach was material, because the adjudicator's actions affected a substantial proportion of the sums in dispute.

By contrast, Clegg submitted the following.

1. The adjudicator was entitled to use his own knowledge and experience, in order to determine the valuation of the Application.
2. The adjudicator was not in fact tasked with making individual determinations or declarations about the rates to be used for valuing each disputed variation. Instead, his task was simply to determine the total valuation of the Application.
3. In all but two cases, the use of the adjudicator's own rates was more advantageous to Prestige than if the adjudicator had adopted either Clegg's position or Prestige's position, or even a crude "split the difference" rate. The two exceptions resulted in an increase in valuation of less than £2,600.
4. The adjudicator was not obliged to accept the entirety of either party's case on the valuation of any of the disputed variations. If he did not accept either party's submissions in whole on a particular point, his task was to value each disputed variation in accordance with the contract (which, in this case, could include evaluating and comparing the variations with similar work for which there was already a contract rate). In reality, this is all that the adjudicator had done.

Decision

The court rejected Prestige's arguments and enforced the adjudicator's decision. The Judge said the following.

1. Both parties had invited the adjudicator to accept their valuation of the Application, or to determine the valuation in "such other sum as the adjudicator may decide". The adjudicator was, therefore:
   1. asked to make a decision on the overall valuation of the Application, not the individual rates to use for the disputed variations; and
   2. was at liberty to determine a valuation different from either party's own valuation.
2. It is acceptable for an adjudicator to value a particular item in a way that he considers "fair and reasonable", using the documentation provided and submissions made by the parties.
3. A failure to seek further submissions from the parties when reaching a decision after consideration of such materials, and then determining an appropriate rate within the range contended for by the parties, is not a breach of natural justice.
4. In any event, the alleged breach was not material or of considerable importance to Prestige. The overall difference between each party's valuation was £738,469.58, whereas the total value of the two items assessed using less advantageous rates for Prestige is £2,600.
5. Prestige failed to establish that it suffered a substantial injustice simply because it was not consulted about the use of a rate which, in many instances, actually proved to be favourable to Prestige.

Key takeaways

The decision in Clegg serves as useful reminder of the court's general inclination to enforce an adjudicator's decision.

Issues of natural justice are fact-sensitive, but it is clear from this decision that a party alleging a breach of natural justice needs to demonstrate that the breach is either decisive – or at least of considerable importance – to the outcome of the dispute.

It is also a reminder that parties need to carefully consider exactly what they are asking an adjudicator to determine, and how, when referring a dispute to adjudication.

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.