A recent Scottish case dealing with a resisted action for enforcement of an adjudicator's award sheds light on a potential disparity between court procedure and the intention of the Construction Act. Given the recent guidance issued by the Court of Session on adjudication enforcement (more on that below) the Scottish judiciary is clearly alert to the issue.
Siteman Painting and Decorating Service Limited v Simply Construct (UK) Limited
In Siteman Painting and Decorating Service Limited v Simply Construct (UK) Limited the Sheriff Court granted decree against the defender in an action in which the pursuer sought to enforce a resisted adjudicator's decision.
The judge had no qualms rejecting the grounds for defence submitted as to the jurisdiction of the adjudicator. Sheriff Reid dismissed both challenges that there had not been a crystallised dispute and that multiple disputes had been referred to the adjudicator.
On the first ground, Sheriff Reid highlighted that the fact there was "a dispute" was expressly admitted in the defender's own defences. On the second ground, the "inglorious history" of multiple disputes arguments was emphasised, the courts having taken a firm line against their adoption because commercial contracts disputes almost invariably give rise to more than one issue. Unsurprisingly in this context, the scond ground for challenge was also rejected.
Despite the narrow likelihood of success from the outset and the straightforward judgement in the pursuer's favour in this enforcement action, it nevertheless was six months for the disputed award to be enforced from the time the action was served. This was fourteen months after the adjudicator issued his decision awarding payment.
The timescales perceived in this case are at odds with the swift justice intended to be brought by adjudication.
Adjudication Enforcement Scotland and England
The Construction Act does not provide for a method for the enforcement of a disputed award.
The Technology and Construction Court (TCC) has created a special system for the enforcement of adjudicator awards in England and Wales which is set out in Section 9 of its Guide. Enforcement proceedings can be under Part 7 or Part 8 of the Civil Procedure Rules ("the CPR"), with claims under the latter generally disposed of on written evidence and oral submission for normally containing no substantial dispute of fact.
The TCC procedure has been established to deal with enforcement applications promptly. A TCC judge will ordinarily provide directions within 3 working days of the receipt of the enforcement application notice. The directions will ordinarily provide for an enforcement hearing within 28 days, with the defendant given at least 14 days for the serving or evidence in opposition. Draft directions demonstrating these timescales are provided at Appendix F of the TCC Guide.
In practice, a 6 to 8 month turnaround for judgement in enforcement actions north of the border is typical. This is roughly twice the average length of experience of adjudication enforcement in England.
Reasons for this would appear to be lack of special court procedure and a backlog in Scottish courts
Streamlined court procedure to allow swift enforcement where an adjudicator's decision is not implemented have not been introduced in Scotland. Instead parties must use procedures which predate the passing of the Housing Grants, Construction and Regeneration Act 1996.
Absence of a dedicated resource equivalent to the TCC to effect an expedited procedure mean the Scottish Courts are not equipped to support the swift justice intended by adjudication under the Construction Act.
The consequences of these inconsistencies of procedure between Scotland and England could be that jurisdiction shopping for enforcement within the UK is encouraged. Further, payees in Scotland may think twice before going through adjudication at all, circumventing the process altogether by raising a normal action for summary judgment.
These potential consequences fly in the face of the "rough and ready, quick and dirty, summary justice" of adjudication as described by Sheriff Reid in this case.
In an attempt to alleviate these delays, the commercial judges of the Court of Session recently issued guidance. Although it does not amend court procedure or timetabling, the commercial court has indicated that it will look favourably on reasonable proposals for the early determination of the dispute, including shortening the period of notice before the court timetable commences and fixing early hearings with a view to early disposal. The court has also indicated an intention to issue a decision there and then after a hearing intended to dispose of the action (if appropriate) or otherwise issue a decision within 28 days.
It is a welcome acknowledgement of a real issue afflicting adjudication in Scotland and it is to be hoped that the guidance will be implemented with ruthless consistency to give it teeth.