Introduction

The annual reports from the Chairperson of the Construction Contracts Adjudication Panel indicate that, to date, adjudicators have dealt with some large value disputes. For example, in 2021 the amounts in dispute in four adjudications were over €10m. Of course, the amount in dispute does not automatically mean that the dispute is overly complex. A smaller disputed amount may give rise to more complex issues.

As adjudication is a speedy process, the question arises as to whether a dispute may be too large or complex for adjudication. To date, this matter has not been dealt with by the Irish Courts. However, courts in the United Kingdom have grappled with this and have provided some useful guidance. In HS Works Limited v Enterprise Managed Services Limited [2009] EWHC 729 (TCC), Akenhead J noted that ‘Parliament provided for “any” relevant dispute to be referable to adjudication and must have envisaged that there would be simple as well as the immensely detailed and complex disputes which can arise on a construction contract.

Recent case law

Recently, two decisions on the topic have been decided, namely, Home Group Limited v MPS Group [2023] EWHC 1946 (TCC) and Atalian Servest AMK Limited v BW (Electrical Contractors) Limited [2023] CSIH 18.

In Homegroup Limited, the Referring Party sought summary enforcement of an adjudicator’s decision. The Referral Notice included a quantum expert report of 155 pages, with 76 appendices, which comprised 202 files in 11 sub-folders, amounting to 338 megabytes of data and a further 2,325 files in 327 sub-folders and five factual witness statements (which amounted to 88 pages, with hundreds of exhibited pages sitting behind). The Responding Party had 19 days (or 13 working days) to produce its response to the Referral. It claimed that this was an inadequate period of time.  The Responding Party contended that it was unable to properly digest and respond to the material served with the Referral and that this was a breach of natural justice.

Constable J enforced that adjudicator’s decision noting that:

50 … the relevant legal position can be distilled as follows:

(3) Both complexity and constraint of time to respond are inherent in the process of adjudication, and are no bar in themselves to adjudication enforcement. Whilst it is conceivable that a combination of the two might give rise to a valid challenge, in circumstances where the Adjudicator has given proper consideration at each stage to these issues and concluded that he or she can render a decision which delivers broad justice between the parties, the Court will be extremely reticent to conclude otherwise;

(4) In cases involving significant amounts of data, an adjudicator is entitled to proceed by way of spot checks and/or sampling. The assessment of how this should be carried out is a matter of substantive determination by the adjudicator and an argument that the adjudicator has erred in his or her approach, absent some particular and material related transgression of natural justice, will not give rise to a valid basis to challenge enforcement. It would, even if correct, merely be an error like any other error which will not ordinarily affect enforcement.

Constable J further noted that:

52 … Irrespective of whether the correct number is 7 boxes or 32 boxes, as set out above, the quantity of information of itself does not present a valid basis for challenging enforcement. I would add that in the modern day, conceptualising the extent of electronic data by what it would look like printed will rarely be particularly persuasive or helpful, particularly so where a large quantity of the ‘documentation’ is in spreadsheets which are not designed to be printed.

In Atalian Servest AMK Limited, an adjudicator resigned because they concluded that the dispute was ‘absolutely incapable of proper resolution in the timescales set by the Construction Act.’ A second adjudicator was appointed and proceeded with the adjudication. The Referral Notice was accompanied by 26,000 pages of documentation. Lord Carloway, in enforcing the decision, noted that ‘the adjudicator had used a broad axe with a blunt edge to reach a robust and summary conclusion.’ Lord Carloway stated that:

38 The adjudicator took on a nigh impossible task. The volume of written materials was enormous. It was redolent of what was described in Re Fundao Dam Disaster [2020] EWHC 2471 (Turner J at para 11) as amounting to “a fractal pattern of progressively complex and ever-finer recursive detail of sharply declining significance“ … It would have required a super-human effort to carry out a precise valuation exercise before the … deadline … The presentation of an excessive amount of material, as both parties did, and the tabling of a wide range of legal and factual issues, could not be allowed to derail the robust and summary adjudication process. That process is not intended to resolve disputes by reference to innumerable rounds of pleadings and submissions.

39 The adjudicator’s determination is, when set against that background, an exemplary piece of work.  He cut the issue down to a straightforward one of assessing roughly what he considered to be payable by AMK to BWE.  That was the question which he was asked to answer.  He answered it in a clear and succinct way.  The several questions that he posed for himself were merely stations on the road to the overall valuation.

Conclusion

If followed in Ireland, the above case law demonstrates that the adjudication process will not be easily derailed by the volume of information submitted or the complexity of the issues. What matters is that the adjudicator sufficiently appreciates the nature of the issues referred including the submissions of each party and is satisfied that broad justice can be done in the time available. However, it is noteworthy, that Constable J in Home Group Limited acknowledges that it is conceivable that circumstances may be such that a combination of complexity and constraint of time may give rise to a valid challenge.

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Photo of Paul Hughes Paul Hughes

Paul Hughes is a senior associate in A&L Goodbody’s Construction & Engineering group. Paul has extensive experience in construction disputes and acts for employers, contractors and sub-contractors across multiple sectors, including, civil engineering, residential, commercial, educational, refurbishment, repair and maintenance and energy. Paul…

Paul Hughes is a senior associate in A&L Goodbody’s Construction & Engineering group. Paul has extensive experience in construction disputes and acts for employers, contractors and sub-contractors across multiple sectors, including, civil engineering, residential, commercial, educational, refurbishment, repair and maintenance and energy. Paul has expertise in disputes concerning extensions of time, loss and expense, defects, variations, payments, final accounts, true valuations, termination and asbestos. Paul has experience of dealing with disputes arising under the standard forms of contract, including, JCT, NEC, FIDIC, PWC & RIAI and ancillary agreements. Paul holds a PhD (Law) and is a solicitor in both Ireland and England and Wales. He is also a Fellow of the Royal Institution of Chartered Surveyors (FRICS), the Society of Chartered Surveyors Ireland (FSCSI), the Chartered Institution of Civil Engineering Surveyors (FCInstCES) and the Chartered Institution of Arbitrators (FCIArb).