Coulson on Construction Adjudication

534 Pages·2011·1.65 MB·English

by  Peter Coulson

COULSON ON CONSTRUCTION
ADJUDICATION
second edition
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COULSON ON
CONSTRUCTION
ADJUDICATION
second edition
The Honourable
Sir Peter Coulson
A Justice of the High Court, Queen’s Bench Division,
Bencher of Gray’s Inn
1
1
Great Clarendon Street, Oxford ox2 6dp
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First published 2007
Second edition published 2011
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FOREWORD
Th e mass of authorities on adjudication form an impenetrable jungle, through which it is not
easy to hack out a path.
Six years ago, just before joining the TCC, I set aside several days (of what should have been
vacation) to read into adjudication—an area of law which I had not previously encountered.
It was something of a culture shock, not only because of the number of authorities but also
because of their strangeness, complexity and length. Owing to the ingenuity of counsel and
multiplicity of points taken on all sides, these decisions did not make for easy or pleasurable
reading. Sadly Mr Justice Coulson’s book was not available to guide me on this jungle
exploration.
Th e fi rst edition of Mr Justice Coulson’s book was published in 2007. It provides a clear and
lucid guide through a bewildering array of case law, which is clustered around the provisions
of the 1996 Act. Mr Justice Coulson’s approach is to unpack the material methodically. Each
topic is clearly signposted and the principles derived from the authorities bearing on that
topic are set out. Inevitably this means that any given authority is referred to more than once,
but this is a price well worth paying. Th e busy practitioner or judge can rapidly fi nd the
section relevant to his/her problem. He/she can also fi nd a clear exposition and discussion of
the relevant cases.
Since 2007 the fl ow of new adjudication cases has not abated. Th erefore this new edition
Coulson on Construction Adjudication is much to be welcomed. I have read through some
specimen chapters with interest. Th is edition displays the same high standard of organisation
and exposition as was manifest in the fi rst edition.
If practitioners on both sides of litigation consult this work, they will rapidly be guided to
the relevant principles and will, hopefully, be assisted in settling their diff erences.
Litigation about adjudication is a form of satellite litigation, which involves the parties
in a second round of legal costs before ever the main proceedings (if there are any main
proceedings) get off the ground. Th is is not a head of expenditure which contractors,
sub-contractors or building owners welcome. I therefore express the hope and expectation
that, armed with this excellent book, the warring parties will more often be enabled to resolve
their diff erences about the jurisdiction of adjudicators, validity of appointment, enforceability
of awards and so forth.
Th is book is a scholarly work of obvious practical utility. It will go into many future editions.
Even if the fl ow of new cases diminishes (as I hope it will), there will be statutory amendments
to consider and also the interesting question of how those statutory amendments impact
upon earlier case law.
Rupert Jackson
Royal Courts of Justice
London WC2A 2LL
October 2010
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AUTHOR’S NOTE FOR THE SECOND EDITION
Looking back at the Author’s Note for the fi rst edition of this book, I accept that it was
unwise to declare with such confi dence that ‘the number of cases concerning adjudication
was at last decreasing’. Although there was something of a lull during the fi rst part of 2007,
when the majority of that fi rst edition was written, it did not last. Since the last part of that
year, when the book was published, and late 2010, there have been over 100 cases involving
adjudication in the TCC alone. And, because the party seeking to avoid enforcement will
usually run more than one defence, most of those cases deal with multiple issues.
I also said in that Note, with considerably greater accuracy, that by late 2007 ‘a great many of
the diffi cult questions raised by the 1996 Act had been answered by the TCC and the Court
of Appeal’. Th us, although some of the 100 cases break new ground, many others are simply
examples of how the principles established in the older cases are to be applied to particular
situations. Only a very few of these new cases come from the Court of Appeal. But that is not
to diminish the importance of some of the more recent decisions: it is to be hoped that the
clearer the guidance in any given situation, the less likely it is that there will be a similar
dispute that will come to court.
Some changes have been made to the structure of the book. Th e chapter on adjudication in
other jurisdictions has been deleted: the topic was simply too large for one chapter, and
others who are much better qualifi ed will write their own books about the adjudication
process in other parts of the world. On the other hand, the chapter on natural justice has
been expanded into three separate chapters (Part IV of this edition), dealing respectively with
general principles, bias and the right to a fair hearing. Challenges to the adjudicator’s decision
on the grounds of natural justice have increased signifi cantly in the last few years, and it
therefore seemed sensible to address this topic in rather more detail this time around. Another
change has been the restructuring of what is now Chapter 15 (Principles of Enforcement).
Th e peer reviews for the fi rst edition were very kind, but the point was made that this chapter
was obviously important and should be expanded. Th e diffi culty, of course, is that, in some
ways, the whole book could be subtitled ‘principles of enforcement’ and I am very conscious of
too much repetition. Accordingly, I have turned that chapter into a checklist of the common
diffi culties on enforcement, and how each has been dealt with by the courts, identifying the
most signifi cant cases under each topic. I hope that makes the chapter rather more user-friendly,
and not too repetitive.
In addition, this edition is also being prepared at a time when the 1996 Act remains in force
in its unamended form, but when the absurdly-titled Local Democracy, Economic
Development and Construction Act 2009 (when will the construction industry in this country
be regarded as important enough to have its own legislation, rather than being tacked on to
other Acts like an afterthought?) has received the Royal Assent but is not yet in force, and is
unlikely to be until a revised Scheme has also been fi nalised. Th at may be a year away. In any
event, the new provisions will not be retrospective, so the 1996 Act will continue to apply to
construction contracts for some time to come. Accordingly, where they diff er (most notably
on the requirement that the contract be in writing, and the changes to the payment provisions),
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Author’s Note for the Second Edition
I have dealt with both the existing provisions and, in Chapter 4, with the 2009 Act. I am
gloomily confi dent that, when the new provisions come into force, there will be an increase
in disputes fi nding their way to court, rather than the reverse. Save in the simplest cases,
I consider that there is a fundamental tension between the restricted timetable in an adjudica-
tion and the adjudicator’s ability fairly to address disputes about the terms of an oral contract
or, inevitably, whether or not there was a contract at all.
Although in my day job I only ever see those decisions that are the subject of criticism by at
least one party, it is right to note that the general standard of the adjudication decisions that
we see in the TCC are of a high quality. Th e work that was undertaken by some of the pro-
fessional bodies in the early days to train adjudicators in all aspects of the work has very
defi nitely paid off . Th at high standard is often maintained despite, rather than because of,
the help the adjudicator gets from the parties: there are times when I read through the
correspondence between the solicitors and the adjudicator and marvel at the way in which
the adjudicator has patiently and thoroughly dealt with the points that have been raised,
whether good, bad or indiff erent, often in the face of unremitting criticism from one, even
both, parties. Occasionally, the lack of assistance or even common courtesy off ered to the
adjudicator by the lawyers or claims consultants is truly shocking.
From a personal viewpoint, I consider that the one area in which adjudicators may wish to
review their practices concerns time and timetabling. Th e essence of adjudication is speed,
and therefore the prompt production of a cost-eff ective answer. Remove the speed, and you
are left with an imperfect and expensive process that leads to a temporary result which one
or both sides are entitled to challenge in full. Th ere has been a tendency in recent years for
some adjudicators in larger cases to expand the 28- or 42-day timetable on a rolling basis,
with the result that, as one disgruntled participant expressed it to me, ‘you spend more than
you would have done in court to get an answer which a judge may laugh at’. Th e overriding
importance of keeping to the timetable must not be forgotten.
Although I can claim to have written every word of this second edition (which makes every
mistake mine, too), it would not have been possible without the hard work and enthusiasm
of a large number of people. I should like to pay particular thanks to Sarah Cox, my former
clerk, who uncomplainingly typed parts of the new material, and Diane Wall, who typed the
bulk of it. David Grant at Keating Chambers again photocopied and fi led all the new cases
for me. Roxanne Selby and Eleanor Walter at OUP have provided large dollops of practical
assistance and undimmed enthusiasm for this second edition. Gideon Scott-Holland, of
Keating Chambers, was a great help on the 2009 Act and generously made sure that Chapter
4 did not contain any howling errors. And Matt Molloy again provided sound advice on the
practical aspects of adjudication, set out in Chapters 18–20.
Since the fi rst edition was published—indeed, I got the news the very day that it was
published—I have become a High Court judge, which has required me to get to grips with
a raft of new responsibilities and has inevitably meant that I have spent rather less time in the
TCC than before. As a result, I have attained a much wider experience of work in other parts
of the High Court, which has only led me to value even more highly the competence and
skill of the specialist construction bar and their instructing solicitors, and the patience
and hard work of my colleagues in the TCC, Ramsey, Akenhead and Edwards-Stuart JJ.
For a variety of reasons, some obvious, some less so, this book could not have been written
without them.
viii
Author’s Note for the Second Edition
In addition, becoming a diff erent sort of judge has given me, perhaps rather belatedly, an
insight into the volume of work undertaken by senior members of the judiciary outside the
courtroom, which often remains unseen and unacknowledged by the legal professions, let
alone the wider public. So I would like to acknowledge the vast amount of work done on
behalf of the TCC by three senior judges, each of whom I have been lucky enough to know
since I was a young and inarticulate barrister, and to dedicate this book to them with gratitude
and a certain amount of awe: Lord Dyson, the fi rst construction practitioner to reach the
Supreme Court; Sir Anthony May, the indefatigable President of the Queen’s Bench Division;
and Lord Justice Jackson, who has been unswerving in his encouragement of me personally
and has very kindly provided an Introduction to the second edition of this book. I suspect
that very few of those who read or use this book appreciate just how much the three of them
have done in the last decade or so, both for the TCC and the development of construction
law generally.
Th e second edition states the law as at 1 November 2010.
Sir Peter Coulson
St Dunstan’s House,
London EC4
1 December 2010
ix