Referral of more than one dispute in adjudication – a challenge to orthodoxy?

As most of our readers will know, any party to a construction contract has a statutory right to refer “a dispute” to adjudication by virtue of section 108(1) of the Housing Grants, Construction and Regeneration Act 1996 (the Act) (as amended).

As most of our readers will know, any party to a construction contract has a statutory right to refer “a dispute” to adjudication by virtue of section 108(1) of the Housing Grants, Construction and Regeneration Act 1996 (the Act) (as amended).

It has been widely believed for some time that the reference to a party referring “a dispute” to adjudication in s.108 of the Act means that only a single dispute can be referred to an adjudicator at any one time under the Act.

However, whether the Act prevents a party from referring more than one dispute (ie, disputes) to an adjudicator under a single reference has been considered and doubted in a recent decision of the Technology & Construction Court.

The case of Willmott Dixon Housing Ltd v Newlon Housing Trust has introduced some interesting thoughts as to the jurisprudence of s.108(1) of the Act. The case was directly concerned with whether two disputes could be referred to two adjudications with the same adjudicator and unsurprisingly the judge decided that there was nothing wrong or objectionable with that.

The judge then considered the impact of the Model Adjudication Procedure published by the Construction Industry Council (which permits reference of “disputes” in a single notice and had been incorporated into the contract) on the issue as to whether more than one dispute could be referred in one adjudication.

Even though the judge proceeded with his judgment on the basis that s.108 precludes a party from referring more than a single dispute at the same time, the judge thought that the principle about the inability to refer multiple disputes to adjudication in a single notice was derived not from the wording of s.108 of the Act but rather from the particular wording of Part 1 para 8(1) of the Scheme (which permits the same adjudicator to adjudicate at the same time on more than one dispute under the same contract with the consent of all parties to those disputes). The judge (Ramsey J) put the reasons for this view accordingly:

“If s.108(1) limits a party to being able to refer a single dispute to adjudication by the reference to the phrase “a dispute” rather than the use of the word “disputes”, then that causes problems for parties consenting to refer multiple disputes to a single adjudication. If a party agreed to a provision for multiple disputes to be referred to adjudication then that provision would not comply with s.108(1). The effect of a provision of the construction contract not complying with s.108(1) would be that s.108(5) would cause the adjudication provisions of the Scheme to apply. The effect would be that paragraph 8(1) of the Scheme would apply which allows multiple disputes to be referred if the parties consent and that would be what the parties had done and were free to do under the Scheme. On that basis the Scheme would not comply with s.108(1). This suggest that an argument based on the reference in s.108(1) to “a dispute” being “one dispute” may not be correct and that the reference to “a dispute” is more likely to be a generic reference to “a dispute”, without seeking to limit it to a singular dispute.”

Although obiter the judge seems to have called into question the orthodox view, stating that the reference to “a dispute” in the Act was not to be taken as limiting the scope of referrals and that the cases suggesting otherwise, (eg, Bothma (t/a DAB Builders) v Mayhaven Healthcare Ltd, (2006) and Witney Town Council v Beam Construction (Cheltenham) Ltd (2011)) were limited to the wording of the Scheme and not the Act generally. If the judge’s reasoning were correct, there would appear to be no justification for finding any such limitation in the referral of multiple disputes in s.108 of the Act.

Although s.108 does refer to “a dispute” in the singular, the Interpretation Act 1978 s. 6 provides that the singular includes the plural unless a contrary intention appears. To support the obiter comments from the judge, there is no indication in the Act, Part II of a contrary intention.

Willmott Dixon was cited in argument on the “multiple disputes” point most recently in TSG Building Services plc v South Anglia Housing Ltd, a decision where the judgment is not explicit on whether the Scheme applied although it seems likely that it did not. In any event, the judgment assumes that only a single dispute could be validly included in one reference, the judge saying:

“I do not intend to add, obiter, to a debate on this topic which was only addressed by Ramsey J himself on an obiter basis. I would say only that, absent specific agreement either in the original contract or on an ad hoc basis, authorities are sufficiently well established now to suggest that only one dispute can be referred to adjudication, albeit that the courts adopt a sensible and commercial approach in determining the relative width of any given dispute.”

The law in relation to what constitutes a single dispute for the purposes of adjudication is now well established. But whether s.108 of the Act does not require only a single dispute to be the subject of one reference to adjudication is an interesting question and we await further guidance from the courts.

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