Local Government Lawyer Home Page


Sharpe Edge Webpage Banner

Welcome to Sharpe Edge, Sharpe Pritchard’s local government legal hub on Local Government Lawyer.

Sharpe Edge features news, views and analysis from our team of specialist local government lawyers working at the heart of the latest legal developments. Sharpe Edge platform is also the only place where local government lawyers can get e-access to two law books by our Head of Local Government Rob Hann: The Guide to Local Authority Charging and Trading Powers (‘LACAT’) and The Guide to Local Authority Companies and Partnerships (‘LACAP’).

 

                                                                                                  

Slide background

You Must Adjudicate First NEC3 imposes obligation to adjudicate first before commencing court proceedings.

Icons CourtMichael Comba discusses NEC3 imposing an obligation to adjudicate first before commencing court proceedings.

 

Greater Glasgow Health Board v Multiplex Construction Europe Ltd and others [2021] CSOH 115

The facts

The Greater Glasgow Health Board (the Employer) entered into a NEC3 ECC Option C contract (the Contract) with Multiplex (the Contractor) for the construction of a hospital. The Contract included the standard NEC optional dispute resolution clause, W2, which provides that a dispute will be referred to adjudication prior to being referred to the tribunal (in this case, the Scottish Courts). Referral to the tribunal can also only occur once a ‘notice of dissatisfaction’ has been served by a party dissatisfied by an adjudication’s outcome.

After the works had concluded several defects in the construction were discovered, and the Employer sought approximately £73m in damages from the Contractor. The Employer referred the matter immediately to the courts, arguing that the dispute was too complex for an adjudication. It claimed that the dispute, really concerning several individual disputes, would have required up to 22 individual adjudications. It argued that W2 impliedly excluded such complex disputes. The Contractor argued that adjudication had to occur first and that, in the absence of an adjudication, W2 served as a contractual bar on commencing court proceedings.

The judgment

The court held that complex disputes were not impliedly excluded from W2. It considered that it was foreseeable at the time of entering the Contract that such disputes may arise and so determined that, had the parties intended to exclude complex disputes, they would have done so explicitly. In any event, the court also held that the dispute was not intrinsically complex or unsuitable for adjudication, nor were 22 individual adjudications obviously required; that was a matter for the adjudicator to consider when the dispute was referred to adjudication.

The court, however, did not agree with the Contractor’s interpretation that W2 was a contractual bar. The obligation to first refer a dispute to adjudication could be waived by the parties and, while the court could not consider the merits of the claim in the absence of that waiver, the court’s jurisdiction was not fully ousted. This followed the reasoning of a recent similar case[1].

Analysis

Although a Scottish case, this judgment is nonetheless important for parties in England and Wales using the NEC form of contract and option W2. Disputing parties under contracts with this option must first refer the dispute to adjudication, regardless of size or value.

This case further underlines that, even for large and high-value claims, the courts continue to strongly support the use of adjudication as a means of dispute resolution ahead of using court proceedings. It is, therefore, crucial that employers and contractors fully acquaint themselves with their dispute resolution process as there is fair chance that they will have to refer to it sooner or later.

This article is for general awareness only and does not constitute legal or professional advice. The law may have changed since this page was first published. If you would like further advice and assistance in relation to any issue raised in this article, please contact us by telephone or email This email address is being protected from spambots. You need JavaScript enabled to view it..

[1] Fraserburgh Harbour Commissioners v McLaughlin & Harvey Ltd [2021] CSOH 8, 2021 S.L.T. 1009, [2021] 1 WLUK 281

Michael Comba is a Solicitor at Sharpe Pritchard LLP.


For further insight and resources on local government legal issues from Sharpe Pritchard, please visit the SharpeEdge page by clicking on the banner below.

sharpe edge 600x100

This article is for general awareness only and does not constitute legal or professional advice. The law may have changed since this page was first published. If you would like further advice and assistance in relation to any issue raised in this article, please contact us by telephone or email  This email address is being protected from spambots. You need JavaScript enabled to view it.

LACAT BookFREE download!

A Guide to Local Authority Charging and Trading Powers

Written and edited by Sharpe Pritchard’s Head of Local Government, Rob Hann,

A Guide to Local Authority Charging and Trading Powers covers:

• Updated charging powers compendium          • Commercial trading options

• Teckal ‘public to public’                                    • Localism Act

FREE DOWNLOAD

LACAT BookAvailable to buy:

A Guide to Local Authority Companies and Partnerships

An invaluable, comprehensive toolkit for lawyers, law firms and others advising
on or participating in Local Authority Companies and Partnerships”

- Local Authority Chief Executive

BUY NOW

  More Articles

<a href=

Momentum for Heat Network Roll Out Gathers Pace

Steve Gummer discusses the increased momentum for a Heat Network Rollout.
Icons Hazard

Unconscious Bias, Discrimination and a Warning to Public Sector Employers

Christian Grierson and Julie Bann discuss two employment tribunal judgements, which provide a stark warning to public sector employers about unconscious bias and discrimination.
<a href=

Levelling up – A new opportunity for further devolution in England?

Rob Hann explores the Government's 'levelling up' policy and looks at whether it is an opportunity for further devolution in England.
<a href=

Time limits for commencing proceedings in procurement challenges

Colin Ricciardiello discusses a landmark procurement challenge judgment on the time limit for commencing proceedings.
Icons Hazard

The Revised National Planning Policy Framework: Better design, greener outcomes?

Alastair Lewis and Sarah Wertheim outline the latest National Planning Policy Framework changes and explain how future developments will be impacted by the new rules.
<a href=

Loose talk costs money: Oral agreement to forego liquidated damages was valid

Michael Comba outlines and analyses a contract dispute resolution: Mansion Place Ltd v Fox Industrial Services Ltd [2021] EWHC 2972 (TCC)
<a href=

Procurement reform – an update

Radhika Devesher and Natasha Barlow provide a summary of the proposed and enacted changes to the UK procurement regime post-Brexit.
Icons Court

The Public Procurement Review Service Report: Procurement Pitfalls and How to Avoid Them

Juli Lau and Beth Edwards examine some of the most common procurement pitfalls and provide a checklist of points for local authorities to bear in mind in order to avoid costly errors.
<a href=

JCT Dispute Adjudication Board Rules: a case of “three’s a crowd”?

Peter Jansen who specialises in construction law and dispute resolution, examines the roles and functions of the JCT’s Dispute Adjudication Board and highlights some key considerations for parties planning to adopt the Rules in their JCT contracts.
<a href=

The Electric Vehicle Revolution or…

Emily Knowles discusses new legislation on the requirement of electric vehicle charging points, and its potential impact on the Electric Vehicle Revolution.
<a href=

Consultation on the Electronic Communications Code – What’s Changing?

Lillee Reid-Hunt outlines the legislative changes to the Electronic Communications Code.
Icons Court

Rocking aground the Christmas tree

Clare Mendelle and George Dale discuss and solve a common construction scenario, looking at the position under the Contract, and how the Employer should deal with the Contractor's request.
Icons Hazard

Adequacy Decision Granted to the UK

Charlotte Smith considers two recent adequacy decisions and explains how this affects existing data practices.
<a href=

Managing employees with long COVID and employees who have anxiety about returning to the office

Julie Bann and Victoria Smith consider how Long Covid may be treated under existing employment laws and provide compliance guidance for employers.
<a href=

Environment Act 2021: What Does it Mean for Waste Authorities?

Sally Stock, Juli Lau, Ellen Painter and Beth Edwards discuss notable changes made to the Environment Bill 2021-2022, which received Royal Assent on the 9th November.
<a href=

ESG and its relevance to the public sector

Peter Collins and Sydney Chandler discuss the growing importance of Environmental, Social, and Governance criteria in public procurement.
<a href=

JCT 101: Time and Punishment

Rachel Murray-Smith, Clare Mendelle and Laura Campbell discuss a common Construction scenario regarding the Practical Completion of a project, and the position under the unamended JCT DB 2016.
Icons Court

The importance of due process, communication and fairness in employee conduct investigations – what you need to know.

Julie Bann and James Hughes discuss the importance of fairness in employee conduct investigations, taking a look at the London Borough of Hammersmith and Fulham -v- Mr S Keable case.
<a href=

Becoming More Inclusive: VAT and Public Procurement

Juli Lau, Natasha Barlow and Beth Edwards examine the recently published Public Procurement Regulations 2021, focussing upon amendments to the thresholds within various procurement regimes.
<a href=

The LADs are Alright

Laura Campbell discusses liquidated damages in construction contracts, focussing upon the long-running Triple Point saga which ended in the Supreme Court this year.
<a href=

Procurement Policy Note 08/21

Juli Lau and Beth Edwards outline Procurement Policy Note 08/21, recently published by the Cabinet office.
Icons Court

Hard Times: Improving Air Quality with Clean Air Zones

Rob Hann and James Goldthorpe examine the introduction of Clean Air Zones to improve air quality across the UK.
<a href=

Autumn Budget Spending Review 2021 – What Public Bodies Need To Know

Rob Hann and James Hughes examine the Autumn Budget Spending Review 2021, looking at what Public Bodies need to know.
<a href=

Net Zero – What’s new for local authorities?

Steve Gummer and Sophie Drysdale look at two major climate publications: the Heat and Buildings Strategy and the Net Zero Strategy.
Icons Hazard

Jumping to conclusions: Final Statements, liquidated damages and material breaches of natural justice

Michael Comba looks at a recent Technology and Construction Court case that provides useful guidance on the JCT’s procedural requirements on disputing Final Statements.
Icons Court

Three times one equals one: Several disputed payment applications amount to a single dispute

Michael Comba considers a case in which the High Court dismissed an employer’s argument that an adjudicator lacked jurisdiction because the referral concerned three separate payment applications and, therefore, comprised three separate disputes.
<a href=

Warm feelings or hot air: the Heat and Buildings Strategy and Heat Networks

This week the government published its Heat and Buildings Strategy (Strategy). This contained vital innovations and essential step changes in terms of how heating is provided, writes Steve Gummer.
<a href=

Procurement reforms: update from Cabinet Office

Rob Hann, Nicola Sumner and Juli Lau assess the Cabinet Office's update on the progress of the government's public procurement reforms.
Icons Court

Bond, Performance Bond. Delivering value for the Public Sector?

Justin Mendelle examines whether public sector clients achieve value for money from the provision of performance bonds.
Icons Hazard

Not so personal messages: R. (on the application of Good Law Project Ltd) v Secretary of State for Health and Social Care and Abingdon Health Plc [2021] EWHC 2595 (TCC)

Nicola Sumner, Juli Lau and Beth Edwards look at The Good Law Project's challenge of the direct award by the Secretary of State for Health and Social Care of three contracts for the production and supply of rapid Covid-19 antibody tests (the “Contracts”).
<a href=

Insolvency – Termination and Beyond

Rachel Murray-Smith and Clare Mendelle consider the potential warning signs of, and the compliant manner for dealing with, contractor insolvency.
Icons Court

Settlement agreements – waiving Personal Injury claims

In the case of Farnham-Oliver v RM Educational Resources LTD, the Queen’s Bench Division of the High Court allowed a Personal Injury claim (“PI claim”) to be pursued by an employee against his former employer despite the parties signing a Settlement Agreement in respect of an Employment Tribunal claim on the same issue. Julie Bann and James Hughes report.
Icons Hazard

Mandatory Vaccination for Care Home Workers in England – Update

Rachel Murray-Smith and Francesca Gallagher look at the detail of the government's guidance on compulsory vaccination for care staff.
<a href=

Make your mind up! Liquidated Damages clause upheld despite Employer’s challenge

In the recent case of Eco World Ballymore (EWB) v Dobler[1] , an Employer took the unusual position of challenging their own entitlement to liquidated damages (LDs) on the ground that the LDs provision constituted an unenforceable penalty clause. Clare Mendelle and James Goldthorpe investigate.
<a href=

Are Collateral Warranties Construction Contracts? Timing is Key.

Clare Mendelle and Anna Sidebottom examine the recently decided case of Toppan v Simply[1], which has provided guidance on when collateral warranties may be considered “construction contracts” under the Housing Grants, Construction and Regeneration Act 1996 and so give the warranty holder the right to adjudicate.
Slide background