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Published 17 December 2018
The recent Court of Appeal decision in Grove Developments Limited –v- S&T (UK) Limited has sent ripples across the legal and construction industry. So, what does this mean to smash and grab adjudications going forward?
In the original Part 8 claim brought by Grove (the employer) against the contractor S&T, the Judge granted the declarations that Grove was entitled to pursue an adjudication as to the true value on the interim payment application. He also found that Grove’s “pay less” notice was valid.
However, the key issue in this matter was whether an Employer can still be entitled to commence a separate adjudication to determine the true value of a contractor’s payment application, in circumstances where its pay less notice is deemed to be invalid. Coulson J found that it was, for a number of reasons:
Whilst this decision reduces the benefits of launching a smash and grab adjudication, because any payment made can be subsequently overturned and any overpayment will have to be repaid, they still continue to be launched.
Almost certainly not. Practical questions are already arising on whether the adjudicator for the “true value” adjudication lacks jurisdiction until the adjudicator for the first adjudication has made its decision, meaning that launching the second “true value” adjudication could end up being a waste of money.
The most important aspect of this decision is that either an employer or a contractor can commence a “true value” adjudication subsequent to a “smash and grab” adjudication, even when a pay less notice has been incorrectly served. The effect of this may see less “smash and grab” adjudications being commenced by contractors, knowing that any sums paid to them in the first adjudication may have to be repaid by way of the second, “true value” adjudication.
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