Challenging adjudication

2023-2024 was a busy yet relatively unusual period for our national Construction team on the adjudication front. For the first time, most of the adjudication disputes we dealt with in one way or another involved resultant Part 8 proceedings. Whilst most of those proceedings settled, it seems that Part 8 post-adjudication is increasingly becoming ‘par for the course’.  

Whilst entirely anecdotal, it seems that we are not alone in noticing an increase in use of the Part 8 procedure. In October 2024 Matt Molloy noted in his article, “Three Times a Lady”:

"If my experience is reflective of that of others then I consider it fair to say that there has been an increased use of serial adjudications and also the use of Part 8 proceedings over the past 19 months. I am sure that this is not coincidental. In my view, parties, no doubt advised by their representatives, are seeking to manage the risk of an adverse decision by an adjudicator by seeking to craft their referrals to adjudication in such a way that it may be possible to avoid the consequences of a decision going against them by referring discrete questions to the TCC by way of a Part 8 claim...”

In our own adjudication practice, Part 8 claims (and the typical costs and timescales associated) are something we have in recent years started advising on as standard at the outset of an adjudication. We reiterate to clients that, if successful, ultimately whether the dispute proceeds to Part 8 is a matter for the unsuccessful party. In this sense, clients can be ‘dragged into’ Part 8 after commencing an adjudication, whether they like it or not.

What is Part 8?

Part 8 is nothing new. Introduced as part of the Civil Procedure Rules 1998 (CPR), Part 8 provides an ‘alternative’ procedure to Part 7.

Whereas Part 7 generally involves disputed fact and evidence (e.g. documentary, expert and factual witness evidence); Part 8 provides a shortened procedure for a “decision on a question which is unlikely to involve a substantial dispute of fact”[1]. Whether an issue involves a “substantial dispute of fact” is often a point of contention.

The shortened procedure means that decisions can be reached by the Court in short timescales (generally less than 4 months when hearings can be accommodated – and ordinarily they can). Typical Part 8 issues include – ‘what does clause x mean?’/‘was notice y valid?’/‘did the Adjudicator have jurisdiction?’.

The relationship between adjudication and Part 8 proceedings is perhaps best demonstrated at paragraph 9.4.5 of the TCC Guide:

“[9.4.5] However, in cases where an adjudicator has made a clear error (but has acted within his jurisdiction), it may on occasions be appropriate to bring proceedings under Part 8 for a declaration as a pre-emptive response to an anticipated application to enforce the decision… such cases are limited to those where:

a) there is a short and self-contained issue which arose in the adjudication and which the defendant continues to contest;

b) that issue requires no oral evidence, or any other elaboration beyond that which is capable of being provided during the interlocutory hearing for enforcement; and

c) the issue is one which, on a summary judgment application, it would be unconscionable for the court to ignore; and further that there should in all cases be proper proceedings for declaratory relief.”

Adjudication decisions are enforced via an expedited Part 7 procedure. Often the Part 7 enforcement proceedings run in parallel to any Part 8 claim before being consolidated.

With large sums of money resting on an adjudication decision, it is easy to see why an unsuccessful party may wish to proceed to Part 8 “as a pre-emptive response to an anticipated application to enforce the decision”. 

Further, there are often merits in both sides of an argument that remain after an adjudication decision has been reached. In this sense, and particularly with higher-value disputes, there is naturally a tendency for initially unsuccessful parties to wonder ‘would the Court agree with the adjudicator?’.

In practice, and given that adjudication decisions are otherwise overwhelmingly enforced, there can be a sense of ‘it is now or never’ which moves parties towards commencing Part 8 proceedings rather than honouring a decision. Generally, and in our experience, Part 8 proceedings are commenced after an adjudication to: (a) nullify the initial decision and/or (b) to attain a commercial settlement on terms more favourable to the unsuccessful party than the initial decision. 

Ordinarily [2], and save as above, a Court will not interfere with the decision of an adjudicator even if it might be considered ‘wrong’ in fact or law. As noted by Mr Molloy, Part 8 enables parties to mitigate the risk of an adverse adjudication decision. This is because Part 8, in practice, enables certain short and self-contained arguments raised during the adjudication to be ‘run again’ or ‘developed’, which otherwise would not be permitted.  

Whilst a “short and self-contained issue” may seem limited in scope, in our experience, many adjudications involve short and self-contained issues which, if decided differently, would materially change the outcome. For example, and rhetorically, what is a “short and self-contained issue” if not the issues commonly seen in ‘smash & grab’ adjudications? This type of adjudication lends itself to Part 8 because the outcome normally turns on whether one or more contractual notices are valid.

Certainly, narrower adjudication referrals typically lend themselves more towards Part 8 (e.g. “is clause x enforceable?”/“is there a notified sum?”). However, this is not always the case. For example, and within a larger ‘true value’ adjudication, there will often be high-value items (e.g. liquidated damages) where entitlement turns on “short and self-contained issues” (e.g. notification conditions precedent/limitation). These are the types of “short and self-contained issue” which typically can be referred to Part 8 for a final determination.

Placefirst

A recent example of this scenario is Placefirst Construction Ltd -v- CAR Construction [2025] EWHC 100 (TCC). HHJ Stephen Davies decided several interesting points of principle including that a pay less notice can, in theory, be given at any time after an application for payment has been made. 

Whilst the findings could be the subject of an entire article itself [3], the wider implications of Placefirst and similar decisions are equally as profound. This is because such cases involve a decision at TCC level running contrary to findings at the adjudication level. 

On this point, it is important to reiterate what HHJ Stephen Davies emphasised at paragraph 17 of his judgment, that the decision is no criticism of the “careful and detailed” decision of the adjudicator:

"[17] I should emphasise that I have decided the case on the basis of the arguments placed before me, which are not necessarily the same arguments as were advanced before the adjudicator, so that I intend no criticism of the adjudicator's careful and detailed reasoning on this point by reaching a decision which is contrary to his decision.”

In our experience, very few TCC decisions are critical of earlier decisions reached by adjudicators, even if different conclusions are reached. This is, in large part, reflective of the quality and experience of the adjudicators involved. As noted by HHJ Stephen Davies, the Court determines points that “are not necessarily the same arguments as were advanced” previously with parties of course having had the benefit of further time by then. Certainly, it is fair to say that generally by the Part 8 stage arguments have been substantially developed, normally with the assistance of counsel.

What’s next?

It is understandable that Part 8 and adjudication is somewhat controversial. It presents a clear conflict in ideology. 

Some will see Part 8 as undermining the ‘pay now argue later’ nature of adjudication. Others will see Part 8 as a useful tool in overcoming adverse decisions whilst creating precedent on “short and self-contained” issues commonly cropping up in adjudication. Given that adjudication decisions are not publicly available, Part 8 sheds light on issues which inevitably will be raised again. 

In our view, these and other points are all valid considerations which, within the wider adjudication community, we must grapple with when asking what we want out of adjudication. Whilst the question is inherently complex and dependent on who one asks, it seems to boil down to whether we want adjudication to move more towards ‘pay now argue later’ or whether we want some limited level of judicial oversight at or around the enforcement stage.

Whilst it is difficult to pinpoint what might be causing any perceived rise in Part 8 claims, the simple explanation might come down to ‘cumulative effect’, i.e. Part 8 procedure within adjudication is becoming more widely known as decisions in the TCC and other higher courts are published. Simply put, parties are adapting to market trends. 

Part 8 is here for the foreseeable future and remains something which, in our view, adjudication users should consider as part of any wider adjudication strategy. We are certainly not advocating a ‘Part 8 over adjudication approach’, rather:

1. As a referring party: the risk of a responding party taking a Part 8 point can be somewhat mitigated by avoiding or minimising narrow dispute referrals. If a narrow dispute referral cannot be avoided (e.g. in a ‘smash & grab’ adjudication) it can be worthwhile warning clients of the risk of the responding party taking a Part 8 point post-decision and the potential cost consequences that follow.

2. As a responding party: in certain circumstances, if there is an appropriate “short and self-contained issue”, Part 8 may be appropriate as a pre-emptive strike before a referring party commences enforcement proceedings.

3. As above, the narrower the scope of a dispute referred to adjudication, the more likely it is that dispute becomes potentially suitable for Part 8. This can be a ‘double-edged sword’ i.e. if you win, the other side may commence Part 8 proceedings/if you lose, you might be able to commence Part 8 proceedings.

4. In appropriate circumstances, it might be prudent to take Part 8 points before the commencement of an adjudication. Again, this is not something we have previously seen but appears to be the next evolutionary step, particularly given the ability to recover costs and potentially avoid those of adjudication. In this way, if it is clear that either side could take a Part 8 point post-decision, communicating and agreeing a way forward with an opponent can be something that saves overall time and cost if the Court can decide the “narrower” points leaving the wider determination for the adjudicator. On the flip side, and in the absence of an adjudication decision, a claimant pursuing a Part 8 claim would likely have to comply with the Pre-Action Protocol for Construction and Engineering Disputes and may not be afforded the benefit of an expedited hearing (i.e. by ‘piggybacking’ onto an expedited Part 7 enforcement hearing already listed). 

5. Serial adjudication remains inherently risky – Part 8 makes it riskier. This is particularly the case if subsequent adjudications rely upon findings made in previous adjudications which might be the subject of Part 8 challenge. If the Court makes an adverse determination, this can sometimes ‘derail’ the subsequent adjudications relying upon earlier findings of previous adjudicators.

6. Parties should not rely on the TCC accommodating a Part 8 claim at the same time as an expedited Part 7 enforcement hearing. As HHJ Stephen Davies made clear at paragraph 9(a) of Placefirst, part of the wider consideration into hearing the Part 8 claim at the same time as the enforcement was that “the court was in a position to determine the Part 8 claim on 20 December 2024 without delaying the resolution of the enforcement proceedings”. 

It will be interesting to see how adjudication and Part 8 continues to develop.

This article was originally published in the Spring 2025 edition of the Adjudication Society Newsletter.

[1] CPR 8.1(2)

[2] Leaving aside ‘procedural arguments’ i.e. lack of jurisdiction, material breach of natural justice and fraud which could not have been raised during the adjudication.

[3] For an interesting perspective, see Tony Bingham’s Building Magazine article, Let’s sort out the payment rules.