Building Law Monthly

In Lanes Group plc v Galliford Try Infrastructure Ltd [2011] EWHC 1035 (TCC), [2011] All ER (D) 10 (May), Mr Justice Akenhead held that, while a purely contractual adjudication agreement could be repudiated (for example, where one party evinces an intention no longer to be bound by the agreement) the same could not be said of an adjudication agreement subject to the Housing Grants, Construction and Regeneration Act 1996. The concept of a repudiatory breach does not apply to statutory rights. It follows that a party cannot lose its statutory right to refer a dispute to adjudication by repudiating the adjudication agreement. But it does not follow that the courts are powerless to prevent a party from abandoning a reference to adjudication and then making, for no reason other than its dislike of the initial adjudicator, a second, identical reference to adjudication. Although the basis on which the courts can intervene to prevent behaviour of this type is not clear, Akenhead J did indicate that, in his judgment, the courts might be able to restrain a party from pursuing the same relief for the same dispute, time and again, in adjudication.

In Eagle v Redlime Ltd [2011] EWHC 838 (QB), [2011] All ER (D) 20 (Apr) Mr Justice Eder held that the claimant’s claim in tort was statute barred because he had both the knowledge required for bringing an action for damages in respect of the relevant damage and a right to bring such an action more than three years before proceedings were commenced. The case acts as a reminder of the dangers of delay in instituting proceedings. As the present case demonstrates, the clock may start ticking against a claimant before he has knowledge of the true cause or extent of the damage that is attributable in whole or in part to the act or omission which is alleged to constitute negligence.

In Profile Projects Ltd v Elmwood (Glasgow) Ltd [2011] CSOH 64, [2011] Scot (D) 21/4 Lord Menzies, sitting in the Outer House of the Court of Session, held that a clause in a contract which imposed on a party referring a dispute to adjudication the obligation to bear the whole costs of the adjudication, including the adjudicator’s fees and costs in their entirety and both parties’ legal expenses, was not inconsistent with s108 of the Housing Grants, Construction and Regeneration Act 1996. For it to be inconsistent with the requirements of the Act, it must ‘disable’ a party from referring a dispute to adjudication; it is not sufficient that the clause acts as a ‘discouragement’ or a ‘disincentive’ to adjudication. Lord Menzies also rejected the submission that non-compliance with the requirements of the 1996 Act results in the displacement of the contract terms in their entirety and their replacement by the terms of the Scheme for Construction Contracts. In his judgment the Scheme provisions are incorporated only in respect of those contractual terms that are non-compliant with the Act. In so concluding on these two issues Lord Menzies appears to have taken the Scottish courts down a very different route from that taken in England in cases such as Yuanda (UK) Ltd v WW Gear Construction Ltd [2010] EWHC 720 (TCC), [2010] BLR 435 (on which see our May 2010 issue, pp 5-9). This tension and inconsistency in the case-law will require resolution.