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Adjudication is a “quick and dirty” process to resolve disputes between parties.  This dispute resolution process is often provided for in the suite of construction contracts as a precursor to arbitration.  The intention behind adjudication is to resolve disputes quickly and assist with cash flow.  This is often critical for construction projects which cannot afford to wait for a trial to conclude while time slips away.

 

It is not uncommon on projects for more than one dispute to be referred to adjudication.  An example of such a scenario might be a dispute regarding an interim payment certificate and a further dispute in the final account.  These disputes could be dealt with by the same adjudicator or different adjudicators depending on the adjudication terms in the contract.

 

A result of this dispute resolution mechanism is the potential for overlapping disputes and adjudication decisions.  So, a question that may arise is whether the adjudicator has jurisdiction over a dispute that has already been heard.

 

A natural problem with hearing a dispute that has already been heard is utter chaos and no finality.  If prior disputes were capable of being “reheard” by another adjudicator, this would also violate the rule of precedent (or stare decisis).  Of course, adjudication is not arbitration or court, but in principle, an adjudication must stand until overturned in arbitration – as most construction contracts require.

 

If the adjudicator is faced with a claim that the dispute, or a part of the dispute, before him has already been heard, then the English Technology and Construction Court might provide some guidance.

 

In HG Construction Ltd v Ashwell Homes[1], when interpreting an NEC3 contract, the court stated that an adjudicator’s decision is binding “until the dispute or difference is finally determined by arbitration or legal proceedings…”.  The parties are effectively bound by a prior decision until it is overturned through the proper venue.

 

HG Construction also set out guidance regarding the obligation of an adjudicator to assess the terms, scope, and extent of the referral and decision of the prior adjudication.  Simply put, a party cannot “seek a further decision by an adjudicator on a dispute or difference if that dispute or difference has already been the subject of a decision by an adjudicator.”  And, it is the adjudicator’s responsibility to assess whether the dispute has indeed already been heard and decided.

 

An adjudicator’s approach must be to ask whether the prior adjudicator has decided a dispute or difference which is the same or substantially the same as the relevant dispute or difference.  If the answer is “yes,” then the current adjudicator cannot hear it and must abide by the prior decision.  To do otherwise would usurp the dispute resolution mechanism agreed between the parties rendering any decision “not final” and their agreement relatively pointless.

 

In 2016, Harding v Paice[2] reaffirmed this position stating, “ultimately, it is what the first adjudicator decided which determines how much or how little remains available for consideration by the second adjudicator.”

 

If a prior dispute becomes an issue, one should ensure it is fully assessed in light of the above law so as not to be re-heard or overruled, so to speak.  It is cold comfort to a party to rely on the possibility of arbitration to rectify an adjudicator’s failings in such a scenario.  While it is also true that adjudicators may make mistakes, it is not acceptable, or supported in law, for an adjudicator to overrule or ignore a prior decision on substantially the same subject matter and dispute.

 

Paul Bellin is an advocate of the High Court of South Africa and an admitted attorney in the United States.  He also represents parties in in both adjudication and arbitration proceedings and advises on contractual matters.

 

[1] [2007] EWHC 144 (TCC) (01 February 2007) at para. 31.

[2] [2016] 2 All ER 819, [2015] EWCA Civ 1231 at para. 57.