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How to Avoid The Costly and Prolonged Pitfalls of incorrect Notices of Adjudication

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The recent case of JonJohnstone Construction Ltd v Eagle Building Services Ltd is a reminder to construction businesses that they should draft a notice of adjudication very carefully - and include the entire scope of the relief sought.

hlwKH logoIn particular, they are advised to ensure that it covers the dispute that is the subject of the adjudication as thoroughly and comprehensively as possible.

In this case, the parties had entered into a short-term contract, in May 2015 for the provision of on-site prefabrication steel bar reinforcement cages, with works completed in October 2015.

JonJohnstone Construction Ltd submitted a claim for payment for £52,336.84 on 21 March 2016. Eagle did not respond and failed to issue a payment notice, so JonJohnstone filed a default payment notice (for the same amount) on 15 April 2016, which was again ignored. JonJohnstone then launched an adjudication, asking the adjudicator to order payment of the amount claimed within the default payment notice.

The adjudication failed because, having issued an earlier claim on the 21 March 2016, the 15 April 2016 notice was not, legally, the correct notice to support an adjudication claim. The adjudicator ruled that the 21 March 2016 application for payment should have been used and therefore decided not to make an order for payment.

JonJohnstone launched a further adjudication and finally achieved an award, though more challenges from Eagle meant the firm had to argue further for enforcement.

Eventually, it won, however, the painful saga highlights the critical importance of properly drafting the notice of adjudication in the first place. Had JonJohnstone done so, it would have saved the company much time, energy and money in dispute – not to mention a large cash flow shortfall that can bring down businesses.

When drafting a notice of adjudication, always take expert advice from a legal practice with acknowledged experience in construction law.

For further information on the adjudication process, or wider construction law issues, contact Wendy Greenwood on 0114 2906208 or email wendygreenwood@hlwkeeblehawson.co.uk

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