Civil Litigation Solicitors

Attempting to settle a construction dispute by the use of an adjudicator often seems to create more problems than it solves, as a recent case illustrates. It involved a firm which built stairs under contract from another firm which had been contracted to carry out building work. The contract was worth approximately £19,000.

The stairs were built and installed in early 2008, but did not meet the approval of the site architect and the contractor refused to pay for them. The subcontracting stair maker attempted to appoint an adjudicator to decide the issue but this was opposed by the defendant contractor’s solicitors on the ground that the contract was not in writing and therefore the adjudicator did not have the jurisdiction to decide the issue. The Construction Act, on which the adjudication was based, only applies to contracts made in writing.

The adjudicator subsequently made a determination providing that payment (of a lesser sum than claimed) should be made to the subcontractor. The contractor disputed that decision in court on the same ground as before.

In court, the claimant argued that the contract was in writing, although it was accepted that not all of the work was covered by written contract and that parts of the agreement were made orally.

The judge was unable to resolve the issue, concluding that there was an arguable case on each side. He declined to give a summary judgment to the subcontractor. He did, however, order the defendant contractor to pay £10,000 into court pending the decision.

The Construction Act is currently under reconsideration and proposed revisions to it were announced in mid-December. One of the main changes is that oral and partly-oral contracts will be covered by the Act for the first time. However, it is always best to get the principal terms of a contract set out clearly in writing, preferably including a clause which provides how disputes under the contract are to be settled.