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News | Wed 24th Feb, 2016
Aspect Contracts – Adjudication Assessed…
The Supreme Court finally had an opportunity to consider the adjudication regime in the case of Aspect Contracts (Asbestos) Limited v Higgins Construction Plc [2015] 1 WLR 2961.
Although this case is from as long ago as 2015, I had to cite it in Court last week and remembered that it was one that I should have included in our recent Professional Negligence briefing, which was a review of 2015 cases.
Higgins was a building company which engaged Aspect to conduct an asbestos survey in connection with a property that was to be developed. Higgins later found asbestos not mentioned in Aspect’s report and referred the matter to adjudication, where it was successful.
After expiry of all potential primary limitation periods, Aspect commenced proceedings: in order to have the matter ‘finally determined’ by legal proceedings (or arbitration).
The High Court rejected the claim but the Court of Appeal reversed that decision. So it was that the matter ended up at the Supreme Court. That judgment confirmed some basic principles of adjudication.
It is worth noting that final determination of the matter by a Court does not entail a simple assessment of the adjudicator’s decision. The Court stressed that the matter is viewed as a whole and afresh. Accordingly, the burden of proof is not reversed merely because there is an adjudication decision in a party’s favour.
Further, the Court confirmed that it was an implied contractual right to seek such a final determination. This is a key finding for all construction contracts that refer to adjudication. However, if a party wants a final determination to confirm an adjudicator’s award, it must bring proceedings within the limitation period of the original cause of action. The paying party naturally has six years from date of payment to challenge any sums paid pursuant to an adjudication award.
Adjudication is often described as only ‘temporarily binding’. In this case, the Supreme Court emphasised just how provisional it can be, unless the parties expressly agree/agreed otherwise. For those on the wrong end of an adjudication decision or award, it is reassuring that the Courts are still there to provide a remedy. For now.
