40 Legal issues changes brought by the 2009 Act, the unpaid party could only suspend performance of ‘his obligations under the contract’ (usually interpreted as ‘all’ obligations under the contract). The option to suspend only some of the works allows lighting contractors and consultants the ability to strategically manage a non-payment issue without blowing up the whole project. However, in lighting, parties are less likely to suspend any of their work or services unless absolutely necessary because of the impact such a step may have on the commercial relationship with the rest of the project team. Working together in collaboration is not compatible with downing tools and suspending unless absolutely necessary (not least because of the requirements above). THE ADJUDICATION PROCEDURE If payment is still not forthcoming, then the last resort may be to refer a dispute to adjudication. Below is the adjudication procedure summarised. Dispute crystallises Either party served a notice of intention to refer the dispute to adjudicaton The notice must identify the dispute and set out the remedy Within seven days of the issue of the notice, the referring party must serve upon the other party its referral (setting out a detailed explanation of its case along with supporting documentation)
Also within the same seven day period, the referring party must secure the appointment of an adjudicator (either being the named person or the nominating body named in the contract) The nominating body will usually charge a fee to be paid by the referring party Following his appointment, the adjudicator will set out a timetable. This will usually permit the other party to issue a response to the referral, for the referring party to reply to that response and for the other party to issue a rejoinder to that reply
The adjudicator must make his decision within 28 days of the referral (that can be extended by an additional 14 days with the permission of the referring party)
The adjudicator’s decision will be binding on the parties (and enforceable by the TCC) unless the adjudicator has acted outside of his jurisdiction or was biased
There is no appeal process. However, the parties can take the same dispute to litigation
WHAT IS THE ‘SLIP RULE’? A further change brought by the Construction Act 2009 is to section 108(3A) of the 1996 Act, which introduced a statutory
Lighting Journal October 2016
slip rule that allows the adjudicator to correct a clerical, mathematical or typographical error arising by accident or omission. However, any request to amend a clerical error omission must be done so in reasonable time. An example of this is the case of YCMS Ltd (trading as Young Construction Management Services) v (1) Stephen Grabiner and (2) Miriam Grabiner [2009] EWHC 127. Mr Justice Akenhead confirmed that an adjudicator may address a ‘slip’ in a decision, but he must do so promptly and may only correct an error (rather than changing his mind). In this case, Mr and Mrs Grabiner employed YCMS to carry out extensive works at their property under a building contract in writing, which incorporated the JCT Intermediate Form. Substantial variations were issued under the contract which increased the contract sum to more than £1 million. Whilst the adjudicator found in favour of YCMS in respect of its first two adjudication referrals relating to a payment certificate and payment of additional preliminaries, he agreed with Mr and Mrs Grabiner in respect of the final certificate, which was also referred to adjudication. YCMS issued court proceedings to enforce the adjudicator’s decision in the TCC. Mr and Mrs Grabiner opposed enforcement on the basis that the adjudicator referred in his decision to a payment certificate that had not been included in the referral (but later emerged as part of Mr and Mrs Grabiner’s defence). In this case, the adjudicator had gone further than just correct his error and had decided to make a recalculation based on a different certificate. Mr and Mrs Grabiner were therefore materially prejudiced by the amendment. CONCLUSION The Construction Act 1996 and its subsequent amendments through the Construction Act 2009, working in conjunction with the Scheme for Construction Contracts, are designed to enhance the position of contracting parties (in the lighting industry) and seek to avoid cash-flow and insolvency issues. Disputes will, however, continue to arise in some shape and form. A steady trickle of reported cases in the TCC demonstrates there is still uncertainty in interpreting the legislation and the position continues to evolve. Furthermore, the current uncertainty with the economic climate in the UK creates fertile ground for arguments on payment and procedure. More than ever, there is increased focus on employers, local authorities, contractors, subcontractors, suppliers and consultants in lighting to deliver and for payments to be calculated correctly and paid on time – not least to avoid disputes. Kirstie Sowter is a solicitor and Howard Crossman (hcrossman@ greenwoods.co.uk) is head of construction at Greenwoods solicitors LLP. With offices in London, Cambridge and Peterborough, Greenwoods is a UK commercial law firm providing legal advice and pragmatic solutions to local, national and international clients