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Published 21 December 2021
As with previous editions, this newsletter highlights some useful and practical guidance from the latest case law. It is perhaps unsurprising that adjudication case law is still generating plenty of case law, especially given the issues arising from COVID-19, Brexit and the economy.
There have been a number of interesting decisions in the Courts recently involving liquidated damages, payment notices and when to adjudicate.
We review two decisions concerning liquidated damages; the first looking at whether an agreement made over the telephone will demonstrate that the parties have agreed to forego liquidated damages, and the second looking at the rate of LADs due when the Employer takes possession of part of the development.
There has been some useful guidance on the standard form contracts in recent decisions. The Courts have made clear that the usual dispute resolution clauses in the NEC suite of contracts means that a dispute must be referred to adjudication before it can go before the Court. Another decision considered the effects of the Final Statement under the JCT D&B contracts and whether a party must adjudicate in order to prevent the statement from becoming “conclusive”.
A recent decision also provides important guidance on the form and content of payment notices. In a nutshell, the paying party must have an genuine belief in its valuation and the sum stated to be due otherwise the payment notice will be invalid.
Finally, we look at the latest on adjudication enforcement. The Court of Appeal has now considered the relationship between insolvent companies and the right to enforce an adjudicator’s decision, effectively putting a lid on any insolvent company’s ambitions to enforce an adjudication award by way of summary judgement.
We wish everyone a Merry Christmas and Happy New Year.
In CC Construction Limited v Mincione  EWHC 2502 (TCC), the Court was asked to consider the enforceability of an adjudicator’s decision and whether the adjudicator had breached the requirements of natural justice.
In Eco World – Ballymore Embassy Gardens Company Limited v Dobler UK Ltd  EWHC 2207 (TCC) the court was asked to make declarations as to the proper construction and effect of the liquidated damages provisions in a construction contract between the Claimant ("EWB") and the Defendant ("Dobler"), in circumstances where EWB had taken over part of the works as complete.
A recent decision of the Scottish Courts in Greater Glasgow Health Board v Multiplex Construction Europe Ltd & Ors  CSOH 115 provides a useful reminder of the effect of clause W2 on dispute resolution under the NEC suite of contracts.
This decision highlights the danger of issuing a Payment Notice without a genuine belief in the sum stated to be due.
Under the Housing Grants, Construction and Regeneration Act 1996 (“Construction Act”), a party may refer “a dispute” that arises under a construction contract to adjudication.
This Court of Appeal case follows the much reported Bresco, Meadowside and the first instance John Doyle cases.
In a recent judgment on 12 November 2021, Mr Justice Eyre held that under a JCT Design and Build Contract, 2016 Edition (“DB 2016”) an oral agreement between the parties to forego liquidated damages (“LDs”) was binding.
It is widely considered that withholding money owed to a contractor, until all work is completed to a client’s satisfaction, is outdated and open to abuse.
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