TOO MANY DOCUMENTS IN ADJUDICATION?
Can you ever have too many documents in an adjudication? In the recent case of Home Group Ltd v MPS Housing Ltd [2023] EWHC 1946 (TCC), this issue arose (again) for consideration before the Technology and Construction Court.
Brief facts. In brief, the claimant, Home Group Ltd (“Home Group”), had engaged the defendant, MPS Housing Ltd (“MPS”), to carry out certain maintenance and repair works for Home Group’s properties in the South-East of England.
Disputes arose, and Home Group referred the disputes to adjudication. In Home Group’s referral, Home Group had included “a quantum expert report of 155 pages, with 76 appendices, which comprised 202 files in 11 sub-folders, amounting to 338 megabytes of data and a further 2,325 files in 327 sub-folders and five factual witness statements (which amounted to 88 pages, with hundreds of exhibited pages sitting behind)”.
Subsequently, the adjudicator rendered an adjudication decision, ordering payment by MPS to Home Group of £6,565,831.94 plus interest and 85% of the adjudicator’s fee.
When Home Group applied to seek summary enforcement of the adjudication decision, MPS resisted the same on the basis there was an inadequate amount of time to properly digest and respond to these materials, and this amounted to a breach of natural justice.
What was decided. Mr. Justice Constable rejected MPS’s submission that there was any breach of natural justice.
Mr. Justice Constable reviewed the authorities dealing with complexities and large disputes being submitted to adjudication, and distilled the following legal principles at [50]:
“(1) Adjudication decisions must be enforced even if they contain errors of procedure, fact or law.
(2) An adjudication decision will not be enforced if it is reached in breach of natural justice and the breach is material, in that it has led to a material difference in the outcome. However, the Court should examine such defences with a degree of scepticism;
(3) Both complexity and constraint of time to respond are inherent in the process of adjudication, and are no bar in themselves to adjudication enforcement. Whilst it is conceivable that a combination of the two might give rise to a valid challenge, in circumstances where the Adjudicator has given proper consideration at each stage to these issues and concluded that he or she can render a decision which delivers broad justice between the parties, the Court will be extremely reticent to conclude otherwise;
(4) In cases involving significant amounts of data, an adjudicator is entitled to proceed by way of spot checks and/or sampling. The assessment of how this should be carried out is a matter of substantive determination by the adjudicator and an argument that the adjudicator has erred in his or her approach, absent some particular and material related transgression of natural justice, will not give rise to a valid basis to challenge enforcement. It would, even if correct, merely be an error like any other error which will not ordinarily affect enforcement.”
(our emphasis added)
Turning to the facts of the case, Mr. Justice Constable was not persuaded that “whether by reason of the volume of material, constraints of time, and access to material, and whether taken separately or in aggregate, there has been any, or any material, breach of natural justice” ([60]).
In doing so, Mr. Justice Constable also made the following observations (among others):
It is not helpful to conceptualise the extent of electronic data by what it would look like when printed, especially when (a) if the documents are spreadsheets which were not designed to be printed and (b) quantity of information per se does not provide a valid basis for challenging enforcement (at [52]).
Nonetheless, the quantity of information can be considered with issues relating to refusal to provide access to data or information, and whether they prevented a party from being able to “fairly … interrogate and respond to the materials” ([53]).
Conclusion. This decision is not surprising, and it is merely the latest in a line of cases where the courts have consistently held that the complexity of an adjudication, and the constraint of time to respond in an adjudication, are not bars in and of themselves to resisting enforcement of an adjudication.
Nonetheless, it is important to note that this decision makes clear that there could be a case where the combination of these two factors may give rise to a valid challenge to an adjudication decision. However, it is likely that such a case will be rare, bearing in mind that, among others, this decision makes clear that an adjudicator is entitled to proceed by way of spot checks and/or sampling.
In this regard, while this decision is not a decision by the Singapore courts, we do not think that it is likely that Singapore courts will reach a result that is (too) different if a respondent attempts to apply to set aside an adjudication determination purely on the ground of there being “too many documents”, or that the issues are “too complex”, alone. This is especially when Parliament has already amended the Building and Construction Industry Security of Payment Act 2004 (“SOPA”) to specifically exclude claims that are “too complex” from being adjudicated upon.
Nonetheless, as this case also highlights, it is possible for a respondent in an adjudication to be swamped with documents. As such, if you are in the position of a respondent under SOPA, and you sense that a disgruntled claimant may be intending to commence adjudication, it may be prudent to either take steps to avoid the dispute or to take steps to prepare for an adjudication.
This publication is not intended to be, nor should it be taken as, legal advice; it is not a substitute for specific legal advice for specific circumstances. You should not take, nor refrain from taking, actions based on this publication. Chancery Law Corporation is not responsible for, and does not accept any responsibility for, any loss or damage that may arise from any reliance based on this publication.