If the adjudicator fails to ‘exhaust’ her jurisdiction, that may make the decision unenforceable. That is a failure of the adjudicator to consider the case in full and therefore a breach of natural justice. The pre-Socratic philosopher Heraclitus famously stated that like the string of a bow, harmony can be found in the tension of opposites. This chapter addresses the conflicting tension the adjudicator must overcome, the requirement not to ‘exceed’ her jurisdiction.

In the context of adjudication, to refer to ‘jurisdiction’ is to refer to the scope of the adjudicator’s authority. Any decision reached by the adjudicator without jurisdiction will be unenforceable irrespective of whether a party has suffered prejudice (IDE v RG Carter Cambridge [2004]).

The first step for the adjudicator is to determine whether she has jurisdiction to act. Absent an express adjudication provision in the contract, the requirements of section 104 of the Act are not satisfied or no ad-hoc agreement, the adjudicator will be acting ‘ultra vires’ or without jurisdiction. The second step for the adjudicator is to determine the matters on which she has power to reach a decision and the relief which may be granted. This scope is circumscribed by way of the notice of adjudication.

Jurisdictional issues occurring before the adjudication commences may be termed ‘threshold’ jurisdiction issues because where such an issue exists, the adjudicator might not have jurisdiction to accept the appointment and the adjudication process cannot be set in train. Jurisdictional points arising during the adjudication process may be termed ‘internal’ jurisdictional issues and most commonly occur due to a breach of the rules governing the adjudication. The following section identifies the common pitfalls that the adjudicator must bear in mind.

Threshold Jurisdictional Issues

1. Applicable Contract

A statutory right to adjudicate only exists if there is a construction contract. Section 104 of the Act defines a construction contract as those related to carrying out construction operations including professional services and section 105 defines those construction operations.

Section 106 of the Act excludes the right to adjudicate any dispute to residential occupiers, which is defined as a party who intends to occupy the dwelling. Note. parties are at liberty to agree to adjudicate, and various standard forms incorporate adjudication provisions such as the JCT’s Home Owner Contracts and the RIBA Domestic Building Contract 2014.

2. Appointment in accordance with contract

If the adjudicator has been appointed other than in accordance with the contract, then the appointment will be defective, and the adjudicator will have no jurisdiction. Each case will turn on its own particular facts, but these cases may include for example, a request for the nomination of an adjudicator preceding the service of a notice of adjudication to the other party (Vision Homes v Lancsville [2009]), or an application to the wrong nominating body or wrong named adjudicator.

The Courts will take a pragmatic view in light of an inoperable provision. For example, in Amec v Whitefriars [2004] the incorrect name did not prove fatal, where the Courts took a lenient view of the misnomer of George over Geoffrey. If on the other hand, the named party is not a party to the dispute, for example a parent company, a subcontractor, a joint debtor, or a novated party then the decision is unenforceable. Obiter, in Amec, the Court also decided that following the named adjudicator’s death, the inoperable clause could be remedied by importing the Scheme.

3. Notified Dispute – Under the Contract

Broadly speaking, if the dispute referred does not arise ‘under the contract’, as imposed by Section 108A of the Act, then the adjudicator does not have jurisdiction. However, since the Fiona Trust case in 2007, it is widely accepted that the scope is extended to disputes ‘associated’ with the contract. It is a moot point if that extends to matters such as settlement agreements, misrepresentation, nuisance etc.

4. Notified Dispute – Multiple Contracts

It is well established that the adjudicator does not have jurisdiction to decide disputes arising under multiple contracts within the same adjudication, save for cases where the parties have expressly agreed to such.

Adjudicators should be aware of cases where substance and jurisdiction overlap which is often related to the question of multiple contracts. Here, the reference to the adjudicator might empower the adjudicator to decide on her own jurisdiction. For example, as part of the dispute referred, the Referring Party requests the Adjudicator to make a declaration on there being one contract with variations. Should the adjudicator agree on this substantive point, the decision would be unchallengeable (Air Design v Deerglen [2008]).

5. Notified Dispute – Multiple Disputes

The Act permits the referral of a single dispute to adjudication. The Scheme p8(1) says the parties are free to agree to refer more than one dispute as long as both parties’ consent.

The courts have given a broad interpretation to what comprises a single dispute and have usually construed adjudication notices as containing one dispute with multiple issues. In Witney Town Council v Beam Construction [2011] Akenhead J set out a useful rule of thumb, “if disputed claim No 1 cannot be decided without deciding all or parts of disputed claim No 2, that establishes such a clear link and points to there being only one dispute”.

6. Notified Dispute – Crystallised Dispute

The Act provides that a dispute may be referred to adjudication. Essentially, this means that the referring party must have made a claim, and the responding party must have acted other than to admit the claim in full.

There need not be an express rejection of the claim (Ringway Infrastructure v Vauxhall Motors [2007]), mere inactivity may suffice (CSK Electrical v Kingwood Electrical [2015]). However, that proposition is conditional upon the claim presented. Should the claim as presented by one party be so ill-defined and nebulous that the other party couldn’t possibly comprehend it, that will not be sufficient to give rise to a crystallised dispute (Amec v Secretary of State for Transport [2004]).

7. Notified Dispute – Already Decided

The adjudicator cannot determine a dispute already decided in an earlier adjudication and in such circumstances must resign. The test is whether the dispute in the second adjudication is the same, or substantially the same, as the dispute decided in the first. It is a question of fact and degree.

If in that second adjudication, one of the parties is asking the adjudicator to do something that is diametrically opposed to that which the first adjudicator decided, that would be an indication of impermissibility (Sudlows Ltd v Global Switch Estates 1 Ltd [2023] EWCA).

8. Service of Referral – Defective Service

The adjudication rules often describe the procedure on serving documents. Section 115 of the Act states that documents can be served by any effective means and that the parties are free to agree the manner of service. Any failure to meet these requirements will result in an unenforceable decision.

A party will not be afforded the opportunity to serve the notices on an agreed address with the knowledge of the party’s latest known address.

9. Service of Referral – Timing of Referral

Statutory Adjudication has a 7-day limitation period to serve the Referral, otherwise it will be invalid. To expand upon this point, a few pertinent points have been clarified in the TCC:

1. Submissions – Arguments Outside the Scope

The general rule is that the scope of the dispute lies primarily in the notice of adjudication and that the responding party is entitled to raise any defence or cross-claim it wishes and it is for the adjudicator to decide whether that defence falls within the scope of the dispute (Pilon Ltd v Breyer Group PLC [2010]).

Furthermore, with the limits of the adjudicator’s jurisdiction set out by way of the notice of adjudication, it is not possible to extend the scope of the dispute by way of the Referral Notice foregoing express agreement by both parties.

2. Decision – Timing of Decision

28 days, unless agreed otherwise, is the statutory limitation period that the adjudicator has at her disposal to reach a decision. Late is always invalid. However, there is a distinction to be drawn between reaching a decision and communicating a decision – the Courts taking a more lenient position on the later, providing it can be shown that the decision was communicated forthwith. A decision issued the next day may not prove fatal (Cubitt v Fleetglade [2006]). A decision due on the Friday and delivered on the Monday most likely will (Lee v Chartered Properties [2010]).

3. Decision – Scope of Decision

It all started when Dyson J passed comments in Bouygues v Dahl-Jensen [1999]. He said that an adjudicator has a licence to answer the right question in the wrong way. However, if she answers the wrong question that decision will be a nullity.

Sometimes the adjudicator will accidentally decide a matter not forming part of the dispute or in the alternative, fail to decide matters in dispute. Furthermore, the adjudicator may answer the wrong question entirely. Save for when the parties agree to extend the scope of the dispute as permitted under the Scheme p20, these mistakes will prove fatal. That said, the lack of correlation between the dispute referred and the decision may survive owing to the Courts broad interpretation of the word ‘dispute’.

4. Decision – Adequacy of Reasons

Under most adjudication rules including the Scheme, reasons are required when requested by one party. However, standard practice is to give reasons. Thus, on that premise, the adjudicator must show she has identified the issues and given reasons showing how she has reached a decision on those issues. Although the threshold for a decision being overturned due to flaws within its reasoning is high, it is not unheard of. The adjudicator has a duty to exhaust her jurisdiction and by giving complete and coherent reasons will assist in resolving the dispute.

5. Decision – Slips

As an implied term in any adjudication agreement the adjudicator, by way of request or independently, can “correct a typographical or clerical error of something expressed within the four corners of the decision and which is apparent on the face of the decision” and this might extend to consequential errors such as dealing with interest and fees (Axis v Multiplex [2019]).

The scope of the slip rule under regulation 22A of the Scheme, or otherwise, is relatively narrow. It is not to allow changes to the basis of the decision or “giving effect to second thoughts or intentions” and furthermore, it is not for “qualifying or clarifying his decision” (McLaughlin & Harvey v LJJ [2024]. In Harvey, whilst correcting an arithmetical error, the adjudicator fatally changed the determination of payment from “due within seven days” to “if not already allowed“.

6. Decision – Lien

The adjudicator cannot impose a lien on her decision, or in other words impose conditions that need to be met by one or both parties before the decision is issued. This might be on multiple grounds including: “lack of jurisdiction, procedural irregularity and lack of impartiality and non-compliance with rule 19(3) of the Scheme” (Mott MacDonald v London & Regional Properties [2007]). It should be remembered that this does not preclude advance payments which may at times be requested.

Conclusion

The adjudicator without threshold jurisdiction must resign and where there is uncertainty regarding the scope of the dispute referred, the adjudicator should separately deal with each part of the dispute to enable severance by the Court. A breach of any of the points set out above risks both the adjudicator’s reputation and, most importantly, the legitimacy of the procedure.

The Kings College Construction Adjudication Report 2023 provided empirical analysis of reported enforcement cases since October 2011. A jurisdictional defence is raised most frequently (a total of 120 cases out of 201) and even though these were only successful 10% of the time, it demonstrates that jurisdiction is fraught with peril.