Court of Appeal ruling in Bouygues vs Dahl-Jensen says decisions stand even if wrong party is paid.
The Court of Appeal this week confirmed that an adjudicator’s decision will be enforced even if it contains an obvious blunder.
The landmark decision was welcomed by specialists as upholding the original wording of the Construction Act.
The judgment was on a case involving giant French contractor Bouygues and one of its subcontractors, Dahl-Jensen. In the original adjudication, Dahl-Jensen ought to have payed Bouygues £141 254. However, as the result of an arithmetical error, Bouygues was ordered to pay Dahl-Jensen £207 741. This decision was subsequently endorsed by the Technology and Construction Court.
Federation of Construction Specialists chief executive John Huxtable said the decision upheld the rough-and-ready nature of adjudication. He said: “Adjudication is a quick fix to protect cash flow – it has to focus on that. I am very pleased that the court is holding on to that line.
John Deacon, partner in solicitor Hammond Suddards Edge, who acted for Dahl-Jensen, said the decision was good news for the industry.
Deacon said the judgment also clarified concerns about a new defence in adjudication cases.
A court ruling arising out of the adjudication between Herschel Engineering and Breen Property suggested that a losing party may be able to suspend payment if it can show that the claimant is threatened by insolvency.
Simon Tolson, partner in solicitor Fenwick Elliott, said a lot of construction lawyers had expected the decision to be overturned.
Tolson said the decision would worry big contractors, but was concerned that small firms could be hit by the insolvency defence.