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Galliford Try v Estura – A blow to adjudication?

16 March 2015 | David Morris

Adjudication is a common form of dispute resolution used in the construction industry. It is comparatively fast and normally cost effective, but comes with the risk of rough justice. 

This is because the adjudicator only has usually 28 days in which to make a decision on what could be a complex dispute. The Courts attitude to adjudication has been very supportive and it will normally enforce an adjudicators decision in a fast, summary judgment, process.

This has helped to give real teeth to the changes to construction law introduced in October 2011 and has generally bolstered the position of those seeking payment in an industry notorious for payment issues.However, in the recent case of Galliford Try v Estura, a different approach has been taken.

Very basically, Galliford Try made an interim application for payment. They were not paid. They went to Adjudication and won £3.9m. That decision cannot be opened up by another adjudicator (you cannot have the same issue adjudicated twice).

The interim payment was the last one before the final account and was for a similar amount to the final account. Estura could normally have adjudicated on the final account to try and win money back, but Galliford Try had no incentive to begin the process to allow this to happen. Galliford Try were happy with the money awarded and, rather than submitting a final account, applied to the Court for summary judgement for the interim award. To the industrys surprise the Court refused the summary judgment of the whole amount (it did allow half) because of the manifest injustice to the paying party that could result. Estura lacked the funds to go to court to ensure a proper valuation of the final account and so Galliford Try’s tactical win would become permanent and it was decided that it was not fair on Estura.

The Court has stressed it is a one-off decision based on the facts, but time will tell. For now adjudication remains a viable method of resolving otherwise costly construction disputes.

If you need advice regarding a possible construction dispute please contact enquiries@gregglatchams.com or 0117 906 9400.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.

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