Nick Kaplan in Wordsworth Construction case sees two adjudicators' decisions set off against each other

25th March 2024

3PB construction barrister Nick KaplanNick KaplanCall: 2013 appeared for the claimant in the case of Wordsworth Construction v Inivos Limited t/a Health Spaces before Recorder Singer KC, sitting as a judge of the Technology and Construction Court (TCC). He was instructed by law firm Berry Smith LLP.

Quite unusually the Court decided to set-off two adjudicator’s decisions against each other. The Court previously confirmed in a judgment last year in FK Construction Ltd v ISG Retail Ltd [2023] EWHC 1042 (TCC) (at [20]) that this was sometimes possible, but that it would only happen in exceptional circumstances and at the Court’s discretion. It is interesting that less than a year later the Court has made a decision where it was required to do this.

Because the Court decided to set the two decisions off against each other, it had to decide what VAT was due as between the two parties since that effected the direction in which money would flow (the Court could not simply make an order for the principal sum “plus VAT as applicable”). This was issue 3 in the hearing. Although the report of the judgment does not record the Court’s conclusion on this issue, the Court decided that none of the VAT claimed by Inivos/HS was due, and some but not all of the VAT claimed by Wordworth was due.

At [55] – [56] of the judgment, the Judge had to consider whether Inivos/HS’s assertion that the first adjudicator was conflicted, invalidated the appointment of the second adjudicator. Although the Judge found, on the facts, that the appointment was not invalidated it is notable that he left the door ajar to a finding for a future court to find, on different facts, that an appointment might be invalidated by a mistaken assertion of a conflict - even if such an assertion is not made fraudulently.

To read a full copy of the judgment, please click here.

If you wish to contact Nick, or instruct him, please email his clerk Joe Townsend on [email protected] or by calling him on 020 7583 8055.