Dispute Resolution

In the midst of the COVID-19 crisis, the TCC has declined to grant an injunction preventing an adjudication from going ahead.

 

With so much of the economy grinding to a halt, there is little that has been left unaffected by the unprecedented COVID-19 crisis. However, last week, a contractor was told by the English Courts that the health crisis did not excuse it from taking part in adjudication proceedings.

 

The facts

In MillChris Developments Ltd v Waters, a contractor sought an injunction to prevent the client from proceeding with an adjudication. The adjudication concerned a payment and defects dispute at Ms Waters’ home.

The contractor had written to the adjudicator requesting that the adjudication be postponed until after the current “lockdown” measures were over. The adjudicator had refused to postpone the adjudication but had suggested a two-week extension to the timetable to allow for any difficulty caused by the crisis. However, the contractor disagreed with the extension and sought an injunction from the Technology & Construction Court (“TCC”).

 

The decision

The Court decided that an injunction should not be granted, allowing the adjudication to go ahead.

The threshold for granting an injunction so as to prevent an adjudication from going ahead was high. In this case, the COVID-19 crisis did not cause any breach of natural justice that would necessitate such an injunction. In fact, the difficulties encountered in obtaining evidence for the adjudication had little to do with the crisis, and any such difficulties could be mitigated by the proposed extension to the timetable.

 

Commentary

As the first case to touch on the interplay between adjudication and the COVID-19 crisis, the English Courts have made clear that in most cases a “business as usual” approach should be taken to such proceedings. Most adjudications can be conducted remotely; where practical difficulties are encountered in doing so, an extension to the timetable can be used to address them.

However, the Court did not rule out that injunctions may be granted in exceptional cases. It is worth noting that in this case there was little evidence that the COVID-19 crisis was actually the cause of any difficulties in obtaining evidence.

It appears that any party seeking an injunction would have to demonstrate that the difficulties experienced on account of COVID-19 would prevent that party from putting forward its case, so as to cause a breach of natural justice.

There has not yet been a decision on these matters in the Scottish Courts, but it seems likely that they will take a similar approach.

 

Take away

Although adjudication proceedings will, for the most part, be expected to continue as normal, it is clear that the current restrictions could make preparing submissions more challenging.

  • Think ahead

More than ever, it is essential to make legal representatives aware of disputes that could be taken to adjudication so that there will be as much time as possible to prepare. Remote working, with limited (if any) access to offices, is likely to make access to key documentation more challenging. Further, the furloughing of key staff members could make it more challenging to get a solid grasp of the dispute.

Given the already tight timescales of adjudications, an extra day or two of preparation could make all the difference.

  • Record, record, record

As always, complying with contractual payment and notice provisions and keeping good records is key to successfully fighting any adjudication. Ensuring that records are well-organised and digitally accessible will make all the difference to the preparation for any adjudication.

  • Communication

The current upheaval has the potential to send any brewing disputes to the bottom of any to-do list. However, keeping up communication to try and come to an amicable solution could prevent the headache of being landed with a Notice of Adjudication in these already unsettled times.