Serial adjudications on a single project - why not?

It is established law that an adjudicator cannot determine a dispute which has already been decided in an earlier adjudication. Where a party to a construction project wishes to bring a second adjudication, this can lead to difficult questions of whether the second adjudicator is bound by the earlier adjudication decision. This is because the dispute referred to adjudication in the second adjudication overlaps with or is the same as the dispute decided in the first adjudication.

In the recent Court of Appeal judgment of Sudlows Ltd V Global Switch Estates 1 LTD [2023] EWCA Civ 81 the court considered the test used to establish whether the second dispute is the same as the dispute decided in the earlier adjudication in the context of two adjudications, one following the other, in relation to extension of time entitlement for different periods of delay. 

One might naturally be drawn to the conclusion that responsibility for delay for two different periods of time would constitute two distinct and different disputes. The Court of Appeal’s decision is summarised below.

Coulson LJ set out the following guidance for deciding whether a particular dispute has already been decided in an earlier adjudication:

1. The adjudicator (and, if necessary, the court on enforcement) should be encouraged to give a robust and common sense answer to the issue. It should not be a complex question of interpretation of documents and citation of authority.
2. When analysing two adjudicator decisions to see if the same dispute has been decided you should look at what the first adjudicator actually decided to see if the second adjudicator has impinged on the earlier decision. What matters is what it was, in reality, that the earlier adjudicator decided. It is that which cannot be re-adjudicated.
3. The third critical principle is the need for flexibility, applying a test of fact and degree. This is to prevent a party from re-adjudicating a claim (or a defence) on which they have unequivocally lost in an earlier adjudication, but to ensure that what is essentially a new claim or a new defence is not shut out. A new, wider, claim or defence in a second adjudication is permissible, even if it includes elements of a claim which had been considered before.
4. One way of at least testing whether the correct approach has been adopted is to consider whether, if the second adjudication is allowed to continue, it would or might lead to a result which is fundamentally incompatible with the result in the first adjudication. If in that second adjudication, one or other of the parties is asking the adjudicator to do something that is diametrically opposed to that which the first adjudicator decided, then that may be an indication that what they are seeking to do is impermissible.

The nature of Sudlows’ two extension of time claims

This was a very unusual delay case. It is almost always the case that in serial extension of time disputes, the arguments about delay range across different competing Relevant Events, the different alleged effects of those different Relevant Events and the consequences of different critical path analyses. But none of that was in play, either in the first or second Adjudication here.

In both adjudications, it was agreed that there was only one cause of the relevant delay (cabling and ductwork issues.) That period of delay was also agreed. The only substantive dispute was which party was contractually responsible for those issues, and therefore that delay. Although the period of the extension of time claimed in the second Adjudication  was obviously different to that which had been claimed in the earlier Adjudication, nothing else had changed. There were still no other competing Relevant Events, and no other matters said to be on the critical path. Importantly, during this second period, no further work was undertaken by Sudlows, just as no work had been done for much of the period that was the subject of the earlier Adjudication.

The complicating factor

In this case the second adjudicator decided he was bound by the earlier adjudicator’s finding that Global was the party responsible for the cabling and ductwork issues but stated in his decision that if he hadn’t been bound by that earlier finding he would have come to a different conclusion on the same issue of contractual liability. This no doubt encouraged Global to challenge his finding that he was bound by the earlier adjudicator’s finding that Global was the party responsible.

The Court of Appeal’s decision

Perhaps unsurprisingly, given the nature of Sudlows’ two extension of time claims and given that the first adjudicator had decided Global was the party responsible for the cabling and ductwork issues, the Court of Appeal decided that the dispute in the second adjudication was the same dispute as decided in the earlier adjudication such that the second adjudicator was bound by the finding of the earlier adjudicator, even though the disputes related to different periods of delay. This was because the only substantive dispute was which party was contractually responsible for the cabling and ductwork issues and this had already been decided by the earlier adjudicator. The second adjudicator was therefore right to consider himself bound by that earlier finding.

In line with Coulson LJ’s four points set out above, in the second adjudication Global was asking the adjudicator to do something that was diametrically opposed to that which the earlier adjudicator decided i.e. decide that Sudlows and not Global were responsible for the cabling & ductwork issues which caused the delay (albeit delay for a different period of time in the second adjudication).