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Reports of the death of the ‘smash and grab’ adjudication have been greatly exaggerated

05 Mar 2018

Commentators have argued that Mr Justice Coulson in Grove Developments Limited v S&T (UK) Limited [2018] EWHC 123 (TCC) (“Grove”) may have put an end to the trend of so-called ‘smash and grab’ adjudications where the payee pursues the payer for an application for payment in full where no valid payment or pay less notice is served.

Such technical and legalistic adjudications have surged since the decision in ISG Construction Ltd v Seevic College [2014] EWHC 4007 (TCC) (“ISG”).  It is not hard to see why: it allows a payee low risk access to their claimed payment(s) in full.  There has, however, been something of a backlash to the ‘smash and grab’ slowly gaining traction with practitioners, adjudicators and the courts.

In Grove, Mr Justice Coulson concluded that the paying party was entitled to immediately adjudicate the ‘true value’ of the sum due by way of a second adjudication in relation to the same interim application even if the paying party had failed to serve a valid and timely payment or pay less notice.

This was a material departure from the conclusions reached by Mr Justice Edwards-Stuart in ISG and later cases, wherein it was held that failure to serve a payment notice amounted to deemed agreement to the value in the application.  Mr Justice Coulson went so far as to indicate that he was “unable to follow the ‘different line’ that he [Mr Justice Edwards-Stuart] took in ISG v Seevic” and in a very considered and polite fashion, intimated that ISG may have been decidedly wrongly.

H&K – Profiles (Jan Rzedzian)

The ability to immediately adjudicate on the same application may reduce ‘smash and grab’ adjudications, but there is still a tactical advantage to be gained from such methods where there are tenuous reasons for reduced payment or non-payment that may not ultimately stack up when the merits are scrutinised.

Indeed, there are also logistical issues behind commencing an urgent merits-based adjudication as, inevitably, a merits-based adjudication will take considerably longer to prepare and commence.  The ‘smash and grab’ will still assist cash flow and can serve as a powerful bargaining chip in negotiations.

Whilst Mr Justice Coulson’s latest decision certainly brings more balance to this contentious issue, it would be surprising indeed if we have seen the last of the ‘smash and grab’ adjudication.

If you would like further information about any of the above, please contact Jan Rzedzian