Adjudication and Part 8

We recently acted for the successful defendant in ISG Construction Ltd v English Architectural Glazing Ltd. Following an adjudication between the parties the claimant, ISG, commenced CPR Part 8 proceedings seeking seven declarations said to arise out of the adjudication decision. These related to final determination of issues ISG said had been wrongly decided and also as to the meaning and effect of the decision. The declarations were sought in anticipation of a further adjudication being commenced.

The judge, HHJ Stephen Davies, declined to grant any of the declarations sought as ISG had not made out its case. At least one of the issues involved disputed issues of fact, which was not suitable for resolution by way of Part 8 proceedings.

The judgment provides a helpful summary of the principles applicable to Part 8 declaratory relief. This included the factors to consider when deciding whether to grant declaratory relief, including at what stage the procedure was invoked, whether or not it required the resolution of disputed questions of fact and whether or not resolving the issues would serve a useful purpose or do justice between the parties. The judge emphasised that where there are actual or potential serial adjudications the focus of the inquiry is “whether or not the dispute which has been or is intended to be referred to the second adjudicator is the same or substantially the same dispute as was referred to and decided by the first adjudicator. A distinction is to be drawn between the dispute which is referred and the issues or arguments which the parties sought to deploy in support of their respective positions”.

During the course of the hearing the judge heard submissions as to whether it would be appropriate for the court to make declarations because there would be particular utility to the parties. The claimant argued that the court should be particularly willing to make declarations as to the meaning and effect of a first adjudicator’s decision in advance of a second adjudication. The judge observed that whilst it was the policy of the court to support adjudication, “it would not be proper for me to proceed on the basis that it is always in the best interests of the parties to engage in a diet of serial adjudications, supplemented as required by a series of applications to the TCC seeking enforcement or Part 8 declaratory relief. In appropriate cases the parties’ interests might be better served by persuading the TCC to exercise its case and cost management powers to enable their disputes to be finally determined in an expeditious and cost-effective manner”.

Gary Rushworth and Martino Giaquinto acted for EAG during the proceedings and regularly assist other clients to manage and resolve construction and engineering disputes.