There is no statutory limit on the number of contract adjudications that can be launched in respect of the same, or similar, subject matter. However, as one case concerning a PFI contract showed, the High Court retains an inherent power to block serial adjudications where they are unreasonable or oppressive.
The case concerned a construction company that bid for a local authority contract to replace street lighting. In putting together its successful tender, it relied on advice from an engineering company. The design prepared by the latter following the award of the contact was said to differ materially from advice given and assumptions made prior to the bid. The construction company claimed that it had suffered loss and damage as a result of that disparity and the poor quality of the design.
The construction company referred the dispute to an adjudicator under the Housing Grants, Construction and Regeneration Act 1996. A timetable for the proceedings was agreed and significant sums spent on preparing for them.
The construction company later withdrew from the adjudication after counsel who had been instructed to represent it became unavailable. It subsequently sought to refer a somewhat modified and narrower dispute to adjudication. The engineering company, however, responded by applying to the Court for an injunction to restrain the second set of proceedings.
In ruling on the matter, the Court noted that the rough and ready adjudication procedure envisaged by the Act is designed to promote speedy and efficient dispute resolution. The principle of abuse of process does not apply to adjudications and the Act does not contain any express or implied restriction that precludes a party from withdrawing from adjudication proceedings, regardless of motive.
However, that did not mean that the Court could never intervene to prevent a party from pursuing a claim in adjudication. Section 37 of the Senior Courts Act 1981 gives the Court a broad power to issue injunctions where it is just and convenient to do so. Such orders can be used to block adjudications if to proceed with them would be unconscionable. Starting and stopping serial adjudications in respect of the same claim, incurring irrecoverable costs, could be viewed as unreasonable or oppressive depending on the individual facts of each case.
The Court acknowledged that unavailability of counsel is rarely a good excuse and that the construction company’s withdrawal from the first adjudication was unreasonable. However, in rejecting the engineering company’s application, it found that the inconvenience and additional costs it had suffered were not so severe or exceptional as to justify a grant of injunctive relief. The engineering company was, however, entitled to recover as damages wasted or additional costs that it had incurred due to the cancellation of the first adjudication.