‘Smash and grab’ and ‘true value’ adjudications: a single dispute?
Section 108(1) of the Construction Act provides the right to refer ‘a dispute’ under a construction contract to adjudication. It is well established law that this refers to a single dispute rather than multiple disputes, and a Responding Party may be able to resist enforcement of an award that decides more than one dispute.
The recent case of Bellway Homes Limited v Surgo Construction Limited  EWHC 10 (TCC) concerns the question of whether pleading a ‘smash and grab’ adjudication and a ‘true value’ adjudication in the alternative constitutes a single dispute, or more than one dispute. For commentary on the difference between ‘smash and grab’ and ‘true value’ adjudications, please see our previous article on the subject.
In Bellway v Surgo the initial dispute was between the contractor, Surgo, and one of its sub-contractors, who subsequently assigned its claim to Bellway. The sub-contractor had made an interim payment application of approximately £150,000 to Surgo, who served no payment or pay less notice and made no payment to the sub-contractor.
The sub-contractor referred the dispute to adjudication on the following basis:
- firstly that the sum within the payment application was the ‘notified sum’ and was therefore due, given no payment notice or pay less notice was issued by Surgo (a ‘smash and grab’ claim); and,
- in the alternative that it was entitled to payment on a true value basis, being such sum as the adjudicator shall decide (a ‘true value claim’).
The adjudicator rejected the smash and grab claim, and went on to decide the value of the account on a true value basis.
In enforcement proceedings brought by Bellway, Surgo sought to resist enforcement on the basis that the alternative way in which the referral had been pleaded amounted to multiple disputes, and that:
“there is no clear link between these claims and that they are entire and independent from one another and separate and stand-alone in analysis, procedure and purpose as a result.”
Perhaps unsurprisingly, the court disagreed and adopted a wide interpretation of the word ‘dispute’, concluding that there was one dispute, being the sum owed, and that there were simply two routes advanced to reach that determination. The decision was therefore enforced.
This decision confirms that parties may refer payment claims on a ‘smash and grab’ basis and a ‘true value’ basis in the alternative, providing it is pleaded correctly. It remains to be seen how often this will be done in practice however, as often parties are not ready to launch a true value adjudication as quickly as a smash and grab, and therefore may still seek to run a smash and grab adjudication whilst it prepares its true value position.