HT-2025-LDS-000008 - [2025] EWHC 2224 (TCC)

I had the benefit of reading the following substantive witness statements:

In addition, I read the witness statement of Mr Stephen Radcliffe of the Claimant’s solicitors dated 26 March 2025 in support of the Claimant’s application for relief from sanctions and to rely upon the witness statement of Mr Birchall which was served late. Permission was granted at the start of the hearing.

As well as reading the witness statements, I also read the various documents to which I was taken during the course of the hearing and directed to in skeleton arguments.

I do not propose to rehearse all of the arguments raised, nor all of the evidence referred to during the course of the hearing. However, I record that I read and considered the evidence as a whole, as well as various documents within the bundle to which my attention was drawn, in addition to all those arguments before coming to my decision.

The dispute between the parties arose out of a construction contract entered into on or around 14 November 2022 concerning the construction of a three-storey block of six one-bedroom apartments in Harrogate. The contract was in the form of a JCT Minor Works Building Contract 2016. Pursuant to that contract, clause 7.2 allowed either party to refer a dispute to adjudication.

The decision of Mr Wood arises from the fifth adjudication between these parties (all in 2024) in respect of this contract. It is not necessary to set out all of the details of the earlier adjudications. Some background, however, is relevant.

The first adjudication brought by the Claimant was, in effect, abandoned by the Claimant without any explanation being given. Both parties were asked by the adjudicator appointed to provide security for his fees after the Defendant had provided its response to the adjudication. The Defendant provided the security requested. The Claimant did not provide security. On being chased by the adjudicator for the security, the Claimant’s representative stated that he was not in receipt of full and proper instructions in respect of the request for security. The Claimant provided its reply in the adjudication but did not pay or mention the security. The adjudicator again requested the security. There was no response from the Claimant to that request and the adjudicator resigned.

Three days after the first adjudicator resigned, the Claimant referred the same dispute to a second adjudication and requested the RICS appoint an adjudicator who would not seek money on account or security for fees and whose terms did not provide for that.

A different adjudicator, Mr Bunker, was appointed. As is usual, Mr Bunker’s terms and conditions provided for joint and several liability of the parties in respect of his costs. Mr Bunker dealt with three adjudications (the second, third and fourth adjudications) between the parties. In the second adjudication, Mr Bunker found for the Claimant and directed the Defendant to pay the costs of that second adjudication. The costs were directed to be paid immediately by the Claimant and, if the Claimant had paid those costs, the costs paid by the Claimant were then to be repaid by the Defendant. The Defendant paid the costs to the Claimant when they were requested by the Claimant (subject to the withholding of an agreed sum of £4,366 which the Claimant had previously agreed to be owed from the Claimant to the Defendant).

The RICS appointed Mr Bunker in respect of the third and fourth adjudications when the Claimant commenced those adjudications which were intended to be “smash and grab” adjudications. Mr Bunker found against the Claimant and in favour of the Defendant in the third and fourth adjudications. He directed the Claimant to pay his costs in respect of those two adjudications immediately. The decision in the third adjudication was given on 19 August 2024 and in the fourth adjudication on 24 September 2024.

The fourth adjudication was commenced by the Claimant almost immediately after receiving the decision in the third adjudication. The application to RICS to appoint an adjudicator for the fourth adjudication was made before the Claimant had paid the costs (directed to be paid by the Claimant to the adjudicator) of the third adjudication.The Claimant did not make any reference to a conflict of interest with Mr Bunker in either of the application forms submitted to RICS for an adjudicator to be appointed, nor during the third and fourth adjudications.

On 30 September 2024, Mr Bunker wrote to the Claimant’s then representative (copying in the Defendant’s solicitors) stating that he had not been paid in respect of the third and fourth adjudications. The Claimant did not respond. Mr Bunker then sought payment from the Defendant pursuant to his terms and conditions. The Defendant’s solicitor wrote to Mr Bate who was the Claimant’s representative in the third and fourth adjudications. Mr Bate responded that he was now “…not instructed in relation to these matters, please do not correspond with us or contact us about them again”. The Defendant then wrote to the Claimant’s directors directly and to previous representatives of the Claimant asking about the non-payment of the adjudicator’s fees. The Defendant received no response to that correspondence.

On 14 October 2024, Mr Bunker wrote to both parties threatening legal proceedings as the parties were jointly and severally liable for his fees. On 31 October 2024, Mr Birchall (now representing the Claimant) wrote to the Defendant and threatened a claim for £361,000 following the first adjudication.The Defendant paid Mr Bunker’s fees in respect of the third and fourth adjudications on 5 November 2024. By letter dated 6 November 2024, the Defendant wrote asking the Claimant to set out its position as to why it had not paid Mr Bunker’s fees, setting out details of alleged defective works and asking for details of the Claimant’s insurer.

On 7 November 2024, the Claimant started a fifth adjudication claiming damages. In the application form to the RICS, Mr Birchall (representing the Claimant) stated on the form that there was a conflict of interest between the Claimant and Mr Bunker, with the stated reason being “Dispute over payment with Referring Party”. There was also an identified conflict between the Claimant and another person which is not of relevance to this dispute.

The guidance given by the RICS in respect of conflicts of interest on its adjudication form is as follows:

“Conflict of Interest

RICS will take reasonable steps to ensure the adjudicator nominated is free from conflict of interest. It is therefore essential that you provide details of the parties involved (including any companies or related entities that a prospective adjudicator would need to consider in their conflict checks). Adjudicators are required to disclose involvement or potential conflicts of interest to RICS prior to nomination. RICS will never knowingly nominate an adjudicator who has a conflict of interest.

If there are any adjudicators who in your view would have a conflict of interest in this matter, you should list them below. Please provide, for each person, brief but clear reasons for this statement.

Your attention is drawn to the decision in Eurocom Ltd -v- Siemens Plc [2014] EWHC 3710 (TCC) to the effect the misrepresentation in this statement could void the process in its entirety, rendering any outcome made by the dispute resolver unenforceable” [emphasis added].

In addition, the RICS issued guidance in the second edition of its guidance “Conflicts of interest for members acting as dispute resolvers” in November 2020. That document defined various terms:

“Conflict of interest:

An involvement between the dispute resolver and one of the parties, one of the parties and representatives or the subject matter of the dispute, or any other circumstances that raises justifiable doubts of bias or apparent bias.

“Apparent bias:

A situation where the fair-minded and informed observer, having considered the facts, concludes that there is a real possibility that the dispute resolver is biased.

“Bias:

A situation where the dispute resolver has a direct (usually pecuniary) interest in the case, and would realistically be affected by its outcome”.

The Defendant’s solicitors emailed the RICS and Mr Birchall (copying in the Claimant) stating that there was not a conflict or any dispute concerning Mr Bunker’s fees as between the Claimant and Mr Bunker. The position was simply that the Claimant had chosen not to discharge its liability to pay those fees when directed to do so by Mr Bunker.

The Claimant did not respond to the Defendant’s solicitor email or seek to explain the basis for an alleged conflict to the RICS. A different adjudicator, Mr Wood, was appointed by the RICS. Mr Wood awarded payment of damages which are the subject of these enforcement proceedings. Mr Wood was bound by the previous decision of Mr Bunker in the second adjudication when Mr Bunker determined the issue of repudiatory breach in favour of the Claimant.

On 8 November 2024, the Defendant issued a statutory demand against the Claimant in respect of Mr Bunker’s fees which the Defendant had discharged despite the Claimant being ordered to pay them.

During the course of the fifth adjudication, the Defendant invited the Claimant to “…better particularise how and why a conflict is said to have arisen” in respect of Mr Bunker’s fees. The Claimant did not respond to that invitation. After Mr Wood’s decision had been given, the Defendant contacted the Claimant’s representative on three occasions seeking particularisation of the Claimant’s position on the alleged conflict and/or bias. No particularisation was provided until the third witness statement of Mr Bailey dated 25 March 2025, and the first statement of Mr Birchall dated 26 March 2025.