19 April 2024
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To Part 8, or not to Part 8, that is the question…

To The Point
(5 min read)

The High Court has provided further welcome guidance on the circumstances in which it is appropriate to bring Part 8 proceedings.  The judgment in ISG Retail Limited v FK Construction Limited [2024] EWHC 878 (TCC) will be of interest to all of those involved in disputes in England and Wales and who are grappling with the correct procedure to adopt.  Here, we summarise the key aspects of the guidance provided by the court.

What is the Part 8 procedure?

Part 8 of the Civil Procedure Rules (CPR) is an alternative procedure for claims which provides a simpler and quicker determination of claims than the process available under the more commonly used Part 7 of the CPR.

When will the Part 8 procedure be appropriate?

Neil Moody KC in this case explained:

"In order to succeed in a Part 8 claim the Claimant must first establish that it is unlikely to involve a substantial dispute of fact. The Claimant must necessarily argue that the issues are relatively straightforward and the evidence self-contained. It is not unusual for the Defendant to emphasise potential factual disputes in support of submissions that the proceedings should be dismissed."

What happened in this case?

ISG brought Part 8 proceedings, following adjudication proceedings in which FK had been awarded an extension of time, seeking a declaration that a particular clause in the construction contract between the parties was a condition precedent to FK's entitlement to an extension of time for completion of the works and that FK had failed to comply with that condition precedent.

FK's position was that these issues were not suitable for determination by way of Part 8 proceedings because:

a.    the relevant clause that was the subject of these Part 8 proceedings (the notice of delay clause) was not a condition precedent to FK's entitlement to an extension of time – ISG's position was that it was a clear condition precedent that FK had obviously breached and so failure to comply in any respect would see ISG succeed on its claim. FK's position was that any time limit was only "directory" and, as the clause was multi-faceted, it required a careful review (and pleading out) of all the possible alternative ways in which FK could have complied.

b.    dealing with the issues in question in the proceedings raised substantial disputes of fact which required the review and analysis of further evidence, which was not before the Court in these Part 8 proceedings.

c.    FK had estoppel and waiver arguments which would require the Court to consider further factual evidence on how the parties had acted as regards the circumstances giving rise to the alleged waiver and/or estoppel.

d.    Part 8 proceedings were not suitable for the final determination of just one aspect (or part of) of an adjudicator's decision (referred to by FK as a "category error").

The Judgment

The judge held that the proceedings were not suitable for Part 8 determination and declined to make the declarations sought by ISG.  AG's Philip Withey and James Lewis, who acted for FK in their successful defence of the proceedings, said:

"whilst the assessment as to whether Part 8 proceedings are suitable will involve a consideration of the particular facts and circumstances in that case, the issues in play here were fairly typical and ones we often see, particularly where the dispute is over compliance with a contractual notification provision. On that basis, the judge's guidance on the suitability of Part 8 proceedings is extremely useful and will be of interest to those involved in construction disputes and, more widely, to those involved in any form of proceedings in the Courts where the Part 8 procedure is being contemplated"

The Judge's Guidance

Here we summarise the guidance provided by the judge on each of the key issues.

Condition precedent
Substantial disputes of fact
Waiver and Estoppel
Category error

Next steps

Our Construction & Engineering team regularly act on large scale infrastructure, engineering and construction disputes, including in respect of adjudication enforcement and Part 8 proceedings.  They would be delighted to discuss any of the issues raised in this article with you.  Please do get in touch with the contacts listed here, or your usual contact, if you would like to discuss.

To the Point 

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