We have been asked this question a lot over the last few weeks. Parties have a right to adjudicate under a construction contract ‘at any time’ – but how does the coronavirus situation affect that?
In an urgent case at the start of April 2020 – Millchris Developments Ltd v. Waters  – the Technology and Construction Court (TCC) was asked that question as well. It decided that the COVID-19 outbreak is no excuse to delay adjudication proceedings and does not amount to a breach of natural justice.
Millchris was a contractor who had carried out works to the Waters’ property. The Waters claimed that there had been an overpayment in the sum of £45,000 and referred this matter to adjudication. Millchris responded by stating that it was impossible for it to comply with the timetable set by the adjudicator due to the COVID-19 outbreak and that proceedings should be postponed until the lockdown has ended.
The basis for Millchris’ claim was that proceeding with the adjudication now would amount to a breach of natural justice because there was insufficient time to prepare, key parties to the dispute were in self-isolation so could not attend a site visit, and instructing an expert would have proved impossible in the circumstances.
The adjudicator rejected this assertion and decided that the adjudication should proceed, albeit providing a two week extension of time in which Millchris could submit its response. Millchris rejected the extension of time and, clearly upset with the adjudicator’s decision, made an application for an injunction (a form of urgent relief) to the TCC.
The court’s decision
In short the TCC disagreed with Millchris and the application for injunctive relief was refused. The adjudication could therefore proceed.
The court – which sat in a virtual hearing under the COVID-19 protocol that the courts are currently working – said that while the courts do have jurisdiction to grant an injunction in relation to ongoing adjudication proceedings, it would only do so in exceptional circumstances. Whether injunctive relief is appropriate will depend on whether proceeding would give rise to the inevitable consequence that the decision is likely to be rendered unenforceable.
Ultimately, the courts said that Millchris had failed to show that the COVID-19 outbreak had that effect. It was noted that while widespread remote working and even self-isolation requirements may cause some difficulty, given current technology, this should not present an insurmountable barrier to meeting the adjudicator’s timetable. In any event, the court noted that if this was truly an issue, the extension offered by the adjudicator should have been accepted.
It is inarguable that we are in unchartered territory as a result of the COVID-19 outbreak, and attention is rightly on people’s health and supporting the country’s vital health infrastructure. But disputes still happen and need resolving. Adjudication is generally a paper-based exercise, making it well suited to the unusual working arrangements most now have. The court in this case has confirmed that the parties will be expected to find ways to accommodate adjudication while the lockdown continues – it is not an excuse to undermine parties’ right to adjudicate at “any time”.
Of course, the Millchris case was decided on its facts, and there may be a situation brought about by the coronavirus outbreak that does mean an adjudication cannot properly proceed. But provided parties are accommodating where necessary – we have already experienced slightly longer submission periods, for example, and parties agreeing to dispense with hard copy bundles – this case confirms that there is no automatic reason why the wheels of adjudication justice should stop.
If you have an adjudication you want to bring now, or have had one commenced against you that you think is adversely affected by the coronavirus outbreak, please get in touch with one of the team and we’ll be happy to discuss.
The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at April 2020.