Statutory adjudication has revolutionised dispute resolution in the construction industry since its introduction through the Housing Grants, Construction and Regeneration Act 1996. Designed to provide a quick and cost-effective mechanism for resolving disputes, adjudication enables parties to obtain temporarily binding decisions within 28 days. However, a critical question that continues to challenge practitioners is: when is a dispute considered the “same dispute” that was previously decided?
The Scottish Court’s ruling in Engenda Group Ltd v Petroineos Manufacturing Scotland Ltd [2022] CSOH 30 provides valuable clarity on this issue by reinforcing a fundamental principle: the introduction of new evidence alone does not transform a previously decided dispute into a different one. This case serves as an important reminder of the finality of adjudication decisions, even when they are only temporarily binding.
Background of the Case
The dispute arose from a contract between Engenda Group Ltd (the contractor) and Petroineos Manufacturing Scotland Ltd (the employer) for fabrication and installation works at the employer’s oil refinery. Engenda failed to complete the works by the agreed completion date, leading to a series of adjudications.
In the first adjudication, the adjudicator found that Engenda was liable for delay but concluded that Petroineos had failed to prove its entitlement to loss of revenue resulting from that delay. Critically, the adjudicator determined that the employer’s evidence was insufficient to establish the quantum of its claim.
Seemingly undeterred by this outcome, Petroineos initiated a second adjudication several months later. This time, they presented substantially the same claim but bolstered by new expert evidence designed to address the evidential deficiency identified in the first decision. The second adjudicator accepted jurisdiction, reasoning that the introduction of new evidence created a different dispute, and awarded Petroineos approximately £2.4 million in damages.
The Court’s Decision
When the matter came before the Scottish Court, Lord Clark firmly rejected the second adjudicator’s approach. The Court held that the adjudicator had fundamentally erred in his understanding of what constitutes the “same dispute.” Referring to established precedents from both Scottish and English courts, including the seminal case of Henchie v Style & Wood [2003] BLR 207, Lord Clark emphasised that merely presenting new evidence to support the same claim does not create a new dispute.
The Court’s reasoning was clear: once a party has failed to prove quantum due to inadequate evidence, they cannot simply re-adjudicate the same matter with better evidence. To allow otherwise would undermine the finality of adjudication decisions and permit multiple attempts
at proving the same case until successful – an approach that contradicts the legislative intention behind statutory adjudication.
As Lord Clark stated: “The dispute referred to the second adjudicator was in substance the same as that which had been determined in the first adjudication. The introduction of new evidence to establish the quantum of the claim… does not alter the essential character of the dispute.”
Practical Implications
The Engenda decision underscores the “one shot” nature of adjudication on specific disputes. Parties must appreciate that they generally have only one opportunity to present their case on a particular issue, making it crucial to put forward their strongest evidence from the outset.
This places significant pressure on parties to ensure their claims are fully prepared before commencing adjudication. For respondents, it highlights the importance of raising substantive defences early, rather than relying solely on evidential challenges that might later be overcome.
For parties who have received an unfavourable adjudication decision due to evidential shortcomings, the appropriate remedy is not to re-adjudicate with better evidence but to pursue the matter through litigation or arbitration. These forum options remain available precisely because adjudication decisions are only temporarily binding.
Strategic considerations might include:
- Delaying adjudication until all evidence is properly compiled and analysed;
- Considering whether litigation might be more appropriate for complex quantum issues; and
- Ensuring expert evidence is obtained early if technical matters are likely to be determinative.
Best Practices for Practitioners
In light of the Engenda decision, practitioners should consider adopting the following approaches:
- Careful dispute framing: When preparing notices of adjudication, parties should carefully define the scope of the dispute. Where possible, identify aspects that genuinely differ from previously adjudicated matters to avoid res judicata challenges.
- Comprehensive evidence gathering: Invest adequate time and resources in evidence preparation before commencing adjudication. Remember that evidential deficiencies may not be correctable through subsequent adjudications.
- Strategic dispute resolution planning: Consider the relative advantages of different dispute resolution mechanisms for particular issues. Complex quantum claims may be better suited to litigation or arbitration, where disclosure processes and more extensive evidence examination are available.
- Robust documentation practices: Maintain comprehensive contemporaneous records that support potential quantum claims, particularly for matters relating to delay, disruption, and consequential losses.
- Expert appointment timing: Engage appropriate experts early in the process to ensure their analysis informs the initial adjudication strategy rather than being used as remedial evidence afterwards.
Conclusion
The Engenda decision provides valuable clarity on a fundamental principle of construction adjudication: new evidence alone cannot transform a previously decided dispute into a new one. This reinforces the need for thorough preparation and careful strategic decision-making before entering the adjudication process.
While this approach may seem strict, it serves the legislative purpose of adjudication as an efficient dispute resolution mechanism. By preventing parties from making multiple attempts to prove the same claim, the courts maintain the integrity and efficiency of the adjudication system.
For construction professionals and their advisors, the key takeaway is clear: when it comes to adjudication, you must put your best foot forward from the beginning. The opportunity to present your case on a specific dispute typically comes just once, making thorough preparation and strategic thinking essential to success.
For expert legal advice and representation in construction and commercial property matters, contact Barton Legal.
Please note, this article and any accompanying video or presentation are for educational and marketing purposes only. It must not be used for giving advice in any shape or form, and it is not a substitute for legal advice. The author does not accept responsibility for loss howsoever occasioned to any person or persons acting or refraining from action as a result of this material.
