CALL US FOR A FREE CONSULTATION: 0207 459 4037

Requirements of Valid Referral Notice in Adjudications – Lessons from Vision Homes Ltd v Lancsville

Procedural Compliance, LADs, and the Consequences of Invalid Adjudications

Problem: In a contractual arrangement between the parties valued at almost £8 million, Vision Homes Ltd appointed Lancsville Construction Ltd for the construction of a structural shell and external envelope for a residential project in London under the JCT Design and Build Contract 2005 Edition.

Challenges arose in the project when Lancsville failed to fund the cladding works, leading to a mutual agreement to significantly reduce the scope of work, notably the external envelope components, resulting in a 40% (around £3m) reduction in the value of the contract.

The modifications disrupted the project’s workflow and confused the responsibilities and deadlines for the project. This caused a series of complex legal disputes between the parties resulting in 4 adjudications including Vision’s entitlement to Liquidated Ascertained Damages (LADs) and asserting their claims for unpaid payment applications, following Vision’s termination of their employment under the contract.

The parties disagreed on the adjudicator’s decisions and therefore referred to the Technology and Construction Court (TCC) for determination and enforcement.

Outcome: The Technology and Construction Court found the third adjudication was invalid because of the failure to comply with procedural issues for referring the matter to adjudication. The notice of adjudication was issued too early before any dispute had occurred, without a properly defined dispute, and lacked the necessary detail, making it invalid. In contrast, the fourth adjudication was upheld, awarding Vision Homes £509,254 in Liquidated Ascertained Damages for late completion.

How can Adjudication Help with Construction Dispute Resolution?

Adjudication in construction dispute resolution is a quick, interim dispute resolution process often used in the UK construction industry. It involves an impartial third party, the adjudicator, who decides the construction dispute until it can be resolved in arbitration or litigation, or until a final agreement is reached.

Adjudication is intended to ensure that cash flow and project progress are maintained while construction disputes are resolved. The process is governed in the UK by the Housing Grants, Construction and Regeneration Act 1996 (also known as the Construction Act). It’s a compulsory mechanism for many types of construction contracts in the UK, ensuring that parties have a rapid method of dispute resolution available to them.

Once a party refers a dispute to adjudication, the adjudicator is typically required to decide to dispute within 28 days, making it a much faster process than going to court. The adjudicator’s decision is binding until the dispute is finally resolved through legal proceedings, arbitration, or by agreement.

When can a Construction Dispute be referred to Adjudication?

The process of referring disputes to adjudication has several requirements that the parties must ensure to ensure that any referral to adjudication is compliant such as:

  1. Applicability of Adjudication: Adjudication is applicable for disputes arising from a construction contract. The contract must fall within the scope defined by the Housing Grants, Construction and Regeneration Act 1996 (most construction contracts will have an adjudication clause and there have been suggested reforms in our article “Construction Adjudication in 2023 – Analysis of Key Trends and Reforms”).
  2. The Notice of Intention to Refer a Dispute: The party initiating adjudication (the referring party) must issue a written notice to the other party (the responding party). This notice is the formal start of the adjudication process and must include specific information.
  3. Description of the Dispute: It should clearly define the nature of the dispute, including what the dispute is about and the parties involved.
  4. Details of When and Where the Dispute Occurred: This includes the contractual basis or circumstances leading to the dispute.
  5. Remedy Sought: The notice should specify what the referring party is seeking to resolve the dispute, such as payment of a specific sum, additional time, or any other form of remedy.
  6. Names and Addresses of the Parties: Full identification of all parties involved in the contract and the dispute.
  7. Timing: The notice must be issued at the appropriate time. It must be served after the dispute has crystallised but within a limitation period.
  8. Appointment of an Adjudicator: Following the notice, an adjudicator is appointed either by agreement between the parties or by an appointing body as specified in the contract or the scheme under the act. The adjudicator must declare their acceptance to act.
  9. Referral Notice: After the adjudicator’s appointment, the referring party sends a more detailed referral notice to the adjudicator and the other party. This document includes comprehensive details about the dispute, the contract terms relevant to the dispute, the basis of the claim, and any supporting documents.

Failing to comply with these requirements may mean that an adjudicator decision may not be valid and you will have difficulties enforcing any adjudicator decision at Court.

If you have a construction dispute, our expert lawyers can assist you to start or defend adjudication proceedings, for a Free Consultation please call us on 0207 459 4037.

Enforcing Adjudicator’s Decision & Challenging Adjudicator Jurisdiction

Vision Homes Ltd v Lancsville Construction Ltd [2009] EWHC 2042 (TCC)

Background

Vision Homes Ltd and Lancsville Construction Ltd were engaged in a construction contract for residential apartments, initially valued at £7.975 million. Issues emerged when Lancsville failed to secure funding for the external envelope works, leading to a de-scoping of the contract by approximately 40%. This reduction not only impacted the value but also significantly altered the project’s timeline and raised disputes over Liquidated Ascertained Damages (LADs) and completion dates.

Construction Disputes Referred to Adjudication

There were 4 disputes between the parties which were referred to adjudication:

  1. First Adjudication: Lancsville initiated the first adjudication regarding the lawfulness of Vision Homes’ termination of their contract. However, this was withdrawn before any decision was made, and the adjudicator, in this case, stood down without making a ruling on this issue.
  2. Second Adjudication: Lancsville initiated a second adjudication, this time concerning non-payment of part of an interim valuation by Vision Homes. The dispute was resolved when Vision made full payment, leading to the second adjudicator also standing down in relation to this issue.
  3. Third Adjudication: This adjudication initiated by Lancsville sought a pre-emptive declaration decision from the adjudicator as to whether it was liable LADs following the significant de-scoping of the contract. The issue here was whether the contract’s original terms, particularly relating to LADs and completion dates, still applied. The adjudicator decided that given that the scope of the contract had changed between the parties that the LADs were not enforceable.
  4. Fourth Adjudication: Vision Homes, shortly after the referral of the third adjudication, initiated an adjudication seeking £509,254 in LADs due to the alleged late completion of the project; this was referred to a different adjudicator to the one who determined the 3rd adjudication. The adjudicator upheld the claim in favour of Vision, affirming that despite the substantial contract modifications and change in scope, certain obligations and claims remained enforceable. Lancsville challenged the enforceability of this decision, leading to the TCC’s review.

Given the conflicts between the adjudicator decisions in respect of the Third and Fourth Adjudications, which were determined by separate adjudicators it fell to the Court to determine which adjudicator was correct.

Decision

The Court held that the referral for the third adjudication was invalid and did not comply with the requirements. It had been referred to early and lacked detail in the adjudication notice, rendering the adjudicator’s decision to declare that there was no liability for LADs null and void. This lack of jurisdiction meant the adjudicator’s decision could not be enforced.

In respect of the fourth adjudication, the Court upheld it and awarded Vision Homes £509,254 in Liquidated Ascertained Damages for late completion despite the reduced scope of the work. The LADs clause was not amended and was still enforceable.

Free Consultation with Expert Construction Dispute Resolution Solicitors

It should be noted that despite the Court agreeing with Vision, Lancsville went into administration shortly after the Court’s decision and was ultimately dissolved in April 2018. This complicated the enforcement of the Court’s decision and highlights the need to act quickly to enforce and protect your rights – you can find more information on enforcing adjudicator decisions here.

Financial due diligence is paramount in the construction industry which is why our lawyers offer a free service “Insolvency Tracker & Claims Protection Service”. Parties should regularly assess the financial stability of their counterparts to mitigate risks associated with financial distress.

Facing a construction dispute or need guidance on construction adjudication? Call our expert lawyers for a free consultation at 0207 459 4037. We are here to help.

We provide flexible funding options including fixed fees and ‘no win no fee’ arrangements for your construction dispute.

Resolution of Construction Dispute – £1.2m Recovered for Sub-Contractor plus costs

Client A approached our expert construction dispute lawyers after receiving a contentious Pay Less Notice which the client assessed at zero.

Our dedicated construction dispute lawyers swiftly analysed the situation, and evidence (including an expert valuation report), identified key areas of contention, and helped Client A successfully challenge and mitigate the financial implications of the notice.

Our construction dispute lawyers were able to recover a significant multi-million-pound sum of over £1.2m for the subcontractor.

Winning Approach to Construction Adjudication

Our lawyers’ extensive industry-specific knowledge and our commitment to justice make us the preferred choice for many businesses in the construction industry. Our construction dispute lawyers are passionate about this industry and are members of the Society of Construction Law and the Adjudication Society.

Our lawyers are recognised among the best lawyers in England & Wales, and have regularly been asked and featured to write authoritative articles in the Financial Times, the Law Society and LexisNexis and have been quoted in City AM, the New Law Journal, Law Society Gazette and Litigation Futures.

Our unique approach to construction adjudication means that we will:

  • Arrange a Free Consultation with you & a qualified lawyer to discuss your construction dispute
  • Free Asset Tracer & Due Diligence Report
  • Arrange a WhatsApp group with you & your legal team in case you have any questions
  • Investigate the merits of your issue & create a strategy for success
  • Send us your case documents easily through our secure client portal, Go Transfer
  • Advise on any judgments & tactics that have proved successful in construction disputes
  • Consult with independent surveyors & experts to strengthen your position
  • Free sign-up to our Insolvency Tracker & Claims Protection service (worth £1k pa)
  • Fixed fees & “no win no fee” arrangements so that you have peace of mind throughout
  • Work hard to achieve the best outcome in your construction dispute

Our construction lawyers offer regulated, independent & confidential legal advice and are also dedicated members of the Professional Negligence Lawyers Association, the London Solicitors’ Litigation Association, the Association of Cost Lawyers, the Insolvency Lawyers Association and the Commercial Litigation Association.

Reviews

Karim Oualnan handled a contractual case to a successful resolution. Karim was very diligent, always providing great, honest advice in which Karim always put my best interests at the forefront of his suggestions during the case. He is very reliable, trustworthy and always on hand to help. I would highly recommend Karim.
I have no hesitation in recommending the services of Karim and his team. I had been banging my head against a brick wall after my bank forced the closure of my accounts and froze a substantial amount of my cash assets. Karim quickly reviewed all of the documentation relating to the matter and issued a letter before claim and formal...
We hired Karim for a commercial dispute, with a UK based entity that breached our P.O. terms. The difficulty with the case was that we have paid a down payment without much leverage to recover it. The supplier misled us forever 2 years and finally decided not to pay our down payment. However, with the support of the lead lawyer...
Very satisfied with the way that Karim Oualnan and his team took hold of a messy conveyancing professional negligence claim, and progressed it all the way through to an amicable settlement in just over 6 months. Professional, courteous, knowledgeable and also pragmatic with advice and strategy. I would not hesitate to recommend.
Karim offered me some advice regarding a lease issue. He was kind , courteous, knowledgable and above all really generous with his time and support . I would recommend Karim in a heartbeat for explaining things so clearly without patronising and for making me feel so at ease.
Karim is wonderful to work with, attentive, calmed and a knowledgeable professional. I appreciate his help a lot, he guided me in a way that not a lot of people does. Reliable and a great motivator.

Choose Excellence in Dispute Resolution

Our Mission

Our litigation solicitors have a proven track record of delivering successful outcomes for clients. Go Legal was founded to make exceptional lawyers accessible and solutions affordable.

Our lawyers and mediators have decades of experience and specialise exclusively in commercial litigation. Our lawyers have been described as “the best litigators in the country” & provide solutions to clients in the following areas of law:

karim sign

Karim Oualnan

Partner and Managing Director

Litigation Lawyer of the Year - Karim Oualnan

Our Story

Having worked more than a decade in law and fuelled by his passion for access to justice, Karim envisaged a different law firm – one that stood as a symbol of hope, fairness, and an unwavering dedication to justice. By providing legal services through a partnership with Go Legal and Spencer West, Karim has been able to create this vision.

Karim did not have a storybook beginning. His childhood echoed with challenges, where he witnessed his family and friends struggle with legal issues. It made him realise that there are individuals and businesses caught up in the complexities of the UK legal system who need reliable, affordable and technically astute lawyers to get results.

Our lawyers make a promise – we will work hard to achieve the best outcome for you. We are here to help!

Our Values

Our firm’s values ensure that we consistently exceed client expectations. We are:

  • Honest: Our lawyers are trusted by many clients
  • Generous: We are technically astute lawyers with compassion, & a genuine desire to help
  • Dedication: Our lawyers tackle each case with relentless dedication & work tirelessly to achieve a successful outcome
  • Innovative: We have access to technology & strategies not used by other law firms
  • Guardians: Our lawyers will guide you through every legal step, ensuring clarity & understanding at all stages

200+

Lawyers*

95%+

Success

20

Offices*

*through our exclusive partnership with Spencer West LLP

Our lawyers are regulated and members of:

Why instruct Go Legal

why-icon-6-6

Expertise

Our team of award-winning legal experts are renowned for their technical expertise, honesty and dependability. We prioritise customer satisfaction by providing personalised attention and ensuring that we consistently exceed our clients' expectations throughout.

why icon 2

Rapid Response​

We understand the urgency of legal matters and offer 24/7 support to clients. Whether you require immediate assistance with legal advice or representation, our team is always available to provide prompt and reliable support. We will create a Whatsapp group with you and your legal team once instructed if you have any out of hours questions throughout your litigation and dispute resolution case.

why icon 3

Fair and Transparent pricing

We provide honest estimates for our legal services at the very outset. We are often instructed on an hourly rate basis, but we can offer discounted fixed fee packages, and no-win no fee agreements. For further information, please see our Funding page which sets out some of the packages we may be able to offer clients.

fast litigation and dispute resolution lawyers

Fast & Reliable

Efficiency and dedication to our clients’ needs are the cornerstones of our practice. We have earned the appreciation and praise of clients and even our opponents by consistently meeting high standards and delivering exceptional results.

why icon 5

Qualified and Regulated

Our team consists of highly qualified and regulated legal professionals who possess extensive knowledge and experience in dispute resolution. You can trust that your legal matter will be handled by specialist and experienced lawyers who provide the highest level of service to achieve the best result for your case.

why icon 1

Customer Satisfaction Guarantee

We are so confident in our ability that we give our clients a service level guarantee. If you are not happy with the service we provide on your case, you can request a 10% discount on our invoice(s) no questions asked.

1. Book Free Consultation

2. Our Lawyers will call you

3. We will represent your best interests to success

Schedule a Free Consultation

Select Date & Time below
Maximum file size: 10 MB
error: Content is protected !!
Search
go-legal-white-logo

How can we help?

Resolving Payment Disputes: A Legal Guide for the UK Construction Sector

We are here to help you. Call us for your Free Consultation: 0207 459 4037

The Ultimate Guide to Construction Project Management: Legal Tips & Best Practices

We are here to help you. Call us for your Free Consultation: 0207 459 4037

The Complete Guide to Litigation Funding in England & Wales

We are here to help you. Call us for your Free Consultation: 0207 459 4037

The Essential Guide to Intellectual Property Protection in the UK

We are here to help you. Call us for your Free Consultation: 0207 459 4037

Understanding Defamation: A Comprehensive Guide

We are here to help you. Call us for your Free Consultation: 0207 459 4037

A Comprehensive Guide to Preventing and Resolving Partnership Disputes

We are here to help you. Call us for your Free Consultation: 0207 459 4037

Navigating Partnership Disputes: A Step-by-Step Guide

We are here to help you. Call us for your Free Consultation: 0207 459 4037

Understanding Your Rights: A Guide to Financial Services Disputes in the UK

We are here to help you. Call us for your Free Consultation: 0207 459 4037

The Essential Guide to Resolving Financial Services Disputes in the UK

We are here to help you. Call us for your Free Consultation: 0207 459 4037

Understanding Professional Negligence: An Introductory Guide

We are here to help you. Call us for your Free Consultation: 0207 459 4037

Guide to starting a Professional Negligence Claim

We are here to help you. Call us for your free consultation: 0207 459 4037

Appealing HMRC Decisions: Your Rights and Procedures

We are here to help you. Call us for your Free Consultation: 0207 459 4037

A Guide to Alternative Dispute Resolution (ADR) in HMRC Disputes

We are here to help you. Call us for your Free Consultation: 0207 459 4037

Best Practices to Minimise Bad Debts

We are here to help you. Call us for your Free Consultation: 0207 459 4037

How to start a Debt Claim

We are here to help you. Call us for your Free Consultation: 0207 459 4037

A Guide to Creditors' Rights in Insolvency Proceedings

We are here to help you. Call us for your Free Consultation: 0207 459 4037

Crypto Recovery Group: Overview of Cryptocurrency Recovery& Fraud

We are here to help you. Call us for your Free Consultation: 0207 459 4037

Cryptocurrency Tax Disputes: Navigating the Grey Areas

We are here to help you. Call us for your Free Consultation: 0207 459 4037

Avoiding Insolvency: Early Warning Signs and Remedial Actions

We are here to help you. Call us for your Free Consultation: 0207 459 4037

Navigating Corporate Insolvency: A Step-by-Step Guide

We are here to help you. Call us for your Free Consultation: 0207 459 4037

Preventing Shareholder Disputes: A Proactive Approach

We are here to help you. Call us for your Free Consultation: 0207 459 4037

The Legal Implications of Deadlock in 50/50 Owned Companies

We are here to help you. Call us for your Free Consultation: 0207 459 4037