Recently there have been an increasing number of Technology and Construction Court (TCC) decisions illustrating the usefulness of Part 8 proceedings in adjudications.
Part 8 proceedings can be bought before, during or after an adjudication has been commenced. According to the Civil Procedure Rules they are to be used where a party seeks “…the court’s decision on a question which is unlikely to involve a substantial dispute of fact…”
Part 9.4.1 of the TCC guide illustrates the types of declaratory relief that can be sought, such as disputes as to an adjudicator’s jurisdiction, whether there is a written contract and the scope of an adjudication.
The cases of Dalkia v Bell through to Yuanda v WW Gear illustrate, for the current purposes, that companies should enter into written contracts or evidence any contract in writing. Not the least reason is that if a dispute arises that leads to an adjudication, having a contract in writing avoids the usual arguments as to whether the adjudicator should resign as they lack jurisdiction because the contract fails to comply with s107 of the Housing Grants Act 1996.
Although Part 8 proceedings may be seen as a further step in an adjudication and therefore an added cost (costs may be recoverable), the real benefit of Part 8 proceedings is that they provide parties with certainty as to whether there actually is a contract in writing and therefore whether the adjudicator has jurisdiction.
By obtaining a judgment as to jurisdiction before or at the outset of an adjudication, it reduces the “losing” party’s arguments to resist enforcement should they not comply with the decision.
The only real downside to Part 8 proceedings is that they extend time for the adjudication. Although there is no obligation on the parties/adjudicator to stop an adjudication, an adjudicator will normally take steps to stop adjudication proceedings while the court decides the Part 8 claim. The TCC has demonstrated a willingness to bring these types of proceeding to a hearing with some speed, but for a party that has been out of pocket for some time, it does introduce a further delay.
Although the new government has not yet stated when - or indeed if - the amendments to the Housing Grants Act will come into effect, disputes regarding whether there is a contract in writing and the associated costs and time delays with Part 8 proceedings are here to stay - for the moment, at least.
Mark Roach is a solicitor at Davies Arnold Cooper