Is s.108 of the Housing Grants Construction and Regeneration Act 1996 (HGCRA 96) draconian? And can construction adjudication lead to ‘clear but sometimes harsh consequences’?
During this assignment I am going to discuss, analyse and argue whether or not this evaluation of adjudication is still correct. In order to achieve an accurate assessment I will analyse a number of cases where adjudication comes into effect. These cases will include Ferson Contractors Ltd v Levolux AT Ltd [2002] EWCA Civ 11 and Harlow and Milner Ltd v Mrs Linda Teasdale [2006] EWHC 1708 (TCC). Another important factor in the introduction of the HGCRA 96 I will assess is the Latham Report 1994 and the recommendations made regarding the resolution of construction disputes. …show more content…
Devonport Royal Dockyard Ltd [2005]. In this case Devonport subcontracted Carillion in 2002 to carry out works, which included upgrading the facilities of a dockyard. Adjudication with regards to Carillion’s financial claims began ineffective as the court decided that the adjudicator lacked jurisdiction. In 2005 Carillion opened another adjudication procedure and after a vast amount of documentation and an extension the adjudicator issued a decision in favour of Carillion. Despite this, Devenport refused to pay Carillion as they believed that the adjudicator acted out of their jurisdiction as they claimed that Carillion was entitled to interest in the region of two thousand pounds. The case was then taken to the Technology & Construction Court and the judge (Mr Justice Jackson) decided that the adjudicator’s decision was to be abided by. Mr Justice Jackson stated that the adjudicator has the authority to decide whether interest is due irrespective of whether the contract includes an express term regarding the payment of interest. Devonport were still not happy with the decision made and the case was taken to the Court of Appeal. The court decided that they agreed with the decision made by Mr. Justice Jackson although they believed that he did not have the power to award interest when the Scheme for Construction Contracts applies. This …show more content…
Levolux were subcontracted by Ferson Contractors to supply and fit brise soleil and louver panels. During this, a dispute arose in regards to the failure to make the full payment by Fersons. This also led to Levolux exercising their right to suspend work on site, due to the payment for works not being received. Fersons responded to this by issuing a notice stating that if work weren’t continued the contracted would be terminated under the provisions of clause 29.6.2, which involved the wrongful termination of work. Levolux made a claim for adjudication on the basis of whether or not Section 111 HGCRA was adhered to. This section of the HGCRA is in relation to the notice of intention to withhold a payment. It is not possible to withhold payment after the final date stated within the construction contract unless an appropriate notice period is given. The adjudicator came to the conclusion that Ferson Contractors did not meet the criteria of Section 111 HGCRA. Although a notice was given to Levolux stating the amount to be held, the adjudicator claimed that there was no adequate reason for withholding the payment. It was decided that Levolux were entitled to “the payment of £56,659 (including VAT) plus interest and costs.” (Adriaanse, 2010). During the process of enforcement of the adjudicators decision, it was found that the subcontractor has the right to suspend work if