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Contracting With a Builder? Get Legal Advice at the Outset!

Had hard-pressed developers obtained proper legal advice in the first place they might have avoided an epic dispute with their builders which led to four separate attempts at adjudication and two costly sets of enforcement proceedings.

The developers had employed the builder to construct and fit out two new homes. The work did not go well and a dispute arose over the value of the work and payments due under the contract. Following the fourth in a string of hard-fought adjudications, the builder was directed to pay the developers £325,484.

The developers launched proceedings to enforce that award. However, in refusing their application, the High Court found that the adjudicator had made a ‘series of misjudgements’ which gave rise to an appearance of bias on his part. In particular, the builder had not been informed in advance of telephone conversations between the developers and the adjudicator’s office manager, who was also his wife. The builder’s challenge to the award also succeeded on jurisdictional grounds.

Expressing sympathy for the developers, the Court noted that the dispute was no closer to final resolution and described the procedural history of the matter as regrettably far removed from the ‘clear system of dispute resolution’ that was envisaged by the architects of the adjudication regime. The Court observed that it was likely that the developers had already overpaid for the work carried out.