In the recent case of MW High Tech Project UK Limited -v- Balfour Beatty Kilpatrick Limited, the Technology and Construction Court (“TCC”) dealt with the question of whether last-minute expert evidence requires consideration before a dispute can have crystallized.
Balfour Beatty was engaged by MW to carry out mechanical and electrical services under an amended JCT Design and Build Sub-contract. The works became delayed, resulting in Balfour Beatty issuing 5 claims for extensions of time.
MW did not respond so Balfour Beatty prepared to commence Adjudication. 8 days before doing so, Balfour Beatty served an expert’s report dealing with the cause of the delays. Again, MW did not respond to that report.
The Adjudicator subsequently awarded a full extension of time to Balfour Beatty.
MW resisted enforcement of the Adjudicator’s Decision (by issuing Court proceedings for a declaration that he did not have jurisdiction to decide the dispute). MW’s position was that, pursuant to clause 2.18.2 of the contract, it was allowed up to 16 weeks to consider any claim for an extension of time. It argued that the service of the delay report amounted to notification of a new claim under clause 2.18 and that no dispute could have crystallised until it had at least had a reasonable time to consider it (8 days, prior to the start of the Adjudication, it argued, was insufficient).
The dispute came before Mrs Justice O’Farrell in the Technology and Construction Court. The central question was whether or not the submission of the expert’s report was supplemental to an existing claim or whether it gave rise to a new one.
Clause 2.17.3 of the contract provided:
“The Sub-Contractor shall forthwith notify the Contractor of any material change in the estimated delay or any other particulars and supply such further information as the Contractor may at any time reasonably require.”
Balfour Beatty’s case was that any notification of a change under clause 2.17.3 would not re-set the 16-week clock for considering the claim.
O’Farrell J made it clear in her judgment that a case-specific approach is appropriate, finding that:
“If the additional notification did not change the fundamental nature and basis of the claim, the contractor would remain under an obligation to respond within the timeframe in clause 2.18,”
But going on to contrast that with the following situation:
“If the additional information, objectively assessed, gave rise to a new claim, the contractor would be entitled to a fresh 16-week period to consider such new claim before there could be any dispute”
On the specific facts of the case, she held that the expert’s report did not amount to a fresh notification; its content was such that it was deemed to be supplemental to the existing claim already made by Balfour Beatty and known to MW. In other words, it was part of the crystallized dispute that had been referred to the Adjudicator.
Accordingly, O’Farrell rejected MW’s challenge and issued a declaration that the Adjudicator’s decision was valid and binding.
This is yet another example of the Court’s reluctance to undermine the Adjudication process. Late service of an expert’s report will not necessarily deprive the Adjudicator of jurisdiction; the question will be whether or not, on the facts, the report is supplemental to a dispute that has already crystallised.
This adds to the already voluminous case law surrounding Adjudication and highlights the point that individual cases will tend to turn on their specific facts. It is important that parties to Adjudication seek specialist legal advice at an early stage to avoid potential pitfalls, both in relation to the Adjudication itself and in relation to any enforcement proceedings.