EG5113 - Contract Law: Analyzing Adjudication Limits in Construction

This essay discusses the limits and limitations of adjudication in construction contract law, focusing on the case of London & Amsterdam Properties Ltd. V Waterman Partnership Ltd. The report examines the adjudication process, the role of the adjudicator, and the application of natural justice principles. It analyzes the court's observations regarding hourly payments, the scope of the referral, and the importance of providing equal opportunities to all parties involved. The essay also touches on the Housing Grants Construction and Regeneration Act 1996 and its implications, concluding that adjudicators must act impartially, provide reasons for their decisions, and adhere to the principles of fair hearing while also recognizing that their decisions are binding until the dispute is fully resolved.

Running head: CONTRACT LAW OF CONSTRUCTION
Limits and limitation of Adjudication
Name of the Student
Name of the University
Author Note

1
CONTRACT LAW OF CONSTRUCTION
Case: London & Amsterdam Properties Ltd. V Waterman Partnership Ltd. [2003]
Introduction:
The case is based on the adjudication process of adjudicator and the Court for proper
adjudication process has proposed certain rules. The principle of natural justice has been
established in this case. Further, the rules of professional negligence have been mentioned in this
case. In this report, the provision on hourly payment of the adjudicator has been discussed along
with detailed discussion on quantum and liability has been mentioned. It is a general rule of
adjudication that the maxim of Audi Alterem Partem (each party should get the right to being
heard) should be maintained in each case (Thomas and Wright 2016). It has been established in
this case. The court has observed that sufficient time should be given to the parties.
Discussion:
A professional contract has been made in between Waterman Partnership and London &
Amsterdam Properties Ltd. However, London & Amsterdam Properties Ltd has made allegation
against Waterman that they had not provide any design information to them within time and the
company has to suffer loss for unwanted delay. An adjudicator has been appointed to resolve the
dispute. However, the adjudicator, after conducted the hearing, charged Waterman with certain
sum of money and ordered them to pay him on hourly base. Waterman has opposed the decision
of adjudicator and made a plea before the court (Adjudication.co.uk 2018).
Waterman Partnership has certain grounds of opposition against the decision of the
adjudicator. According to them, the matter should be based on the terms of the contract

2
CONTRACT LAW OF CONSTRUCTION
agreement made between both the parties; however, the referral did not maintained all the
provisions of the contract. Certain provisions of the natural justice have been violated in this case
and enough time and opportunities have not given to Waterman. It was stated by Waterman that
the adjudicator has been appointed on different terms and this is against the terms of the
company referral. It has been further alleged by the company that all the decision taken by the
adjudicator is invalid and he has no right to take such decision. The company has opposed the
hourly payment off adjudicator. Further, it has been stated by them that the adjudicator has not
maintained the provisions of paragraph 25 of the terms. Regarding the natural justice, Waterman
alleged that they did not get enough time for producing documents in their favor and London &
Amsterdam Properties Ltd has not given them all the required documents and the adjudicator has
pronounced the judgment without considering the same.
However, the observations made by the court in this case were important in nature. The
court was rightly observed that adjudicator has all the rights to decide the method of getting
payment from the parties and they can charge on hourly basis. However, the rate of the amount
should be reasonable and sensible in nature. There is no provision in law that can make the
hourly payment as unlawful. Further, the court has been notified that the adjudicator has found
that the referral page exceeds the highest limit (maximum 20 pages) as the pages of the referral
exceed 1000 pages. According to Court, the observation made by the adjudicator was correct and
it was suggested by court to take the summary of the case (17 pages) as a matter of concern.
It has also been stated by the company Waterman that there is no dispute at all against
which London & Amsterdam Properties Ltd has filed the case and approached before
adjudicators. Therefore, the burden to prove the validity of the case has been transferred to
London & Amsterdam Properties Ltd by Waterman. However, Court has observed that in Halki

3
CONTRACT LAW OF CONSTRUCTION
Shipping Corp v Sopex Oils Ltd [1998] it has been stated that if any party has denied a claim or
if any party does not pay any certain amount, it will be considered as dispute. In this case, if
Waterman has maintained the quantum then also they will be held liable on the liability ground,
as they had denied paying the amount decided by the adjudicator.
However, the scope of the natural justice has been correctly observed by the court.
According to their view, it is the fundamental object of natural justice that each party will get
equal opportunities to place their own submission before the adjudicator or before the
appropriate authorities. If the principle of fair hearing will not be maintained, the same will be
considered as a breach of natural justice. It has been observed by the court that Waterman had
asked for certain documents from London & Amsterdam Properties Ltd. (LAP) and LAP has
providing only a part of the required document and therefore, the submission made by Waterman
become time worthy. In the view of Judge Wilcox, the adjudicator has failed to observe the same
and passed decision against Wilcox. It has also been notified by the court that the way the
adjudicator has handled the evidences were not according to law. Further, all the observation
made by the adjudicator based on the partial evidence that is he had considered the evidence
submitted by LAP, but did not give much time to Waterman to submit their points of view.
Therefore, the court observed that Waterman has not been given much opportunity to adduce
their evidences.
It was also alleged by Waterman that the adjudicator had prior information about the
subject matter of the case and this goes against the policy of the contract made in between the
two companies. According to Waterman, prior knowledge on the subject matter goes against the
policy of the natural justice. However, it has been observed by the court that having prior
knowledge or information on the subject is not against the law, but the adjudicator should have

4
CONTRACT LAW OF CONSTRUCTION
to inform about this to all the parties before starting the session. However, the adjudicator had
not maintained this in this case. Further, in case the adjudicator entered into any confidential
information, he should have to inform the parties regarding the same. This has also not been
mentioned b y the adjudicator in this case. However, in this case, adjudicator has not disclosed
any confidential information and therefore, it can be stated that the step taken against the
adjudicator is pointless.
The provisions of the Housing Grants Construction and Regeneration Act 1996 (HGCRA
1996) and Scheme for Construction Contracts (England and Wales) Regulations 1998 will apply
in this case (Blake, Browne and Sime 2016). According to Macob Civil Engineering v Morrison
Construction, the decision of the adjudicator is binding until the dispute has been resolved. It has
further been observed in this case that if the parties are not satisfied by the decision of the
adjudicator and could not follow the decision made by the adjudicator, it will come under the
definition of dispute. The award given by the adjudicator is enforceable in nature. In the case of
CH2M Hill Australia PTY Ltd v ABB Australia Pty Ltd, it was alleged that the adjudicator has
failed to perform the duty critically and does not follow the rules of the construction contracts
(Adriaanse 2016). It was held in that case that the adjudicator has failed to provide any reason for
the decisions taken by him. This is considered as the abuse of law and Court has decided that the
decision of the judge comes under the purview of jurisdictional error.
Conclusion:
Therefore, it has been observed in this case that certain rules have been discussed by the
court regarding the adjudication power of the adjudicator. It has been observed that the
adjudicator should have to follow the provisions of the construction contract and certain limits

5
CONTRACT LAW OF CONSTRUCTION
have been imposed on him (Menkel-Meadow 2015). He should have to act impartially. He has to
give all the parties equal rights and opportunities so that they can represent them properly. He
should handle all the evidence in effective manner and in case of any confidential matter; he has
to inform all the parties. It is the duty of the adjudicators to provide reason for the decision and
he should heard both thee parties before coming to a conclusion. However, it has been prescribed
by the court in this case that the decision made by the adjudicator is mandatory in nature and the
parties should have to follow the same until the dispute has been resolved.

6
CONTRACT LAW OF CONSTRUCTION
Reference:
Adjudication.co.uk - London & Amsterdam Properties Ltd v Waterman [2003] EWHC 3059 -
Adjudicator Nominating, Services and Information. (2018). Adjudication.co.uk. Retrieved 25
March 2018, from
http://www.adjudication.co.uk/archive/view/case/808/london_&_amsterdam_properties_ltd_v_w
aterman_%5B2003%5D_ewhc_3059
Adriaanse, M.J., 2016. Construction contract law. Palgrave Macmillan.
Akintoye, A., Renukappa, S. and Lal, H., 2014. Developments in the United Kingdom dispute
resolution process. Journal of Legal Affairs and Dispute Resolution in Engineering and
Construction, 7(1), p.A4514004.
Blake, S.H., Browne, J. and Sime, S., 2016. A practical approach to alternative dispute
resolution. Oxford University Press.
Blake, S.H., Browne, J. and Sime, S., 2016. A practical approach to alternative dispute
resolution. Oxford University Press.
Bult, A.K., Halligan, D.W., Pray, J. and Zack Jr, J.G., 2016. Dispute Avoidance and Alternative
Dispute Resolution. In Construction Contract Claims, Changes, and Dispute Resolution (pp. 347-
385).
Burr, A. ed., 2017. Delay and Disruption in Construction Contracts: First Supplement. Taylor &
Francis.
Menkel-Meadow, C., 2015. Mediation, arbitration, and alternative dispute resolution (ADR).

7
CONTRACT LAW OF CONSTRUCTION
Thomas, R.W. and Wright, M., 2016. Construction contract claims. Palgrave Macmillan.
Todd, N. and Ezeani, E.C., 2016. Adjudication costs under the Housing Grants, Construction and
Regeneration Act 1996: the attractions of Singapore's Building and Construction Industry
Security of Payment Act 2004.
Wang, J.D., 2016. The Duality of the Engineer as Contractor Administrator under FIDIC
Contract Conditions. In Advanced Material Engineering: Proceedings of the 2015 International
Conference on Advanced Material Engineering (pp. 379-387).
file:///C:/Users/sys2/Desktop/2072365_1067864939_JCT-SBCQ-2016-Copy.pdf