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Detailed Practice Notes written by our Professional Support Lawyers, guiding you through the key issues in each topic.
Enforcing awards - OverviewEnforcing an adjudicator's award
Neither the HGCRA (in its original form) nor the Scheme provide a method for the enforcement of an award.
An adjudicator's award does not have the status of a judgment and so cannot be enforced in the same way. The TCC has created a special system for the enforcement of adjudicator awards which is set out in the TCC Guide. Enforcement can be under CPR Part 7 or CPR Part 8. At the same time, an application should be issued under CPR 23 for summary judgment under CPR Part 24.
Alternative enforcement methods are insolvency proceedings and mandatory injunctions.
For more detail see Enforcing an adjudicator's decision - TCC and alternative methods of enforcement.
Resisting enforcement - set-off and counterclaims
A party who is ordered to pay money in an adjudicator’s decision must pay in full without deduction or set-off. Generally a set-off or counterclaim cannot be raised to defeat enforcement proceedings although there are limited exceptions. Set off has been allowed for example:
in a contractual adjudication, where the payment/withholding regime of the HGCRA did not apply
where the nature and scope of the adjudicator’s decision was such that the logical progression from the adjudicator’s decision was that the employer was entitled to liquidated damages. In such circumstances the employer may set-off that sum against money payable to the contractor pursuant to the adjudicator’s decision provided that proper notice is given in accordance with the contract
For more detail see Resisting enforcement – set-off and counterclaims.
Resisting enforcement - stay of execution
The Court may stay execution if the judgment creditor is in liquidation or administration. However, a stay of execution of a summary judgment will rarely be given. When considering whether to grant a stay of execution the court will apply the general principles set out in the Wimbledon Construction case. One aspect to consider is whether the financial position of the applicant has deteriorated from the date of the 'relevant contract' to the date of the judgment debt. What constitutes the relevant contract will depend on the type of adjudication.
For more detail see Resisting enforcement - stay of execution.
Resisting enforcement - what not to do
It is important to be aware of the ways in which an adjudicator’s award can be resisted. Those unfamiliar with adjudication may raise arguments which appear to be persuasive but which are regularly rejected by the courts.
For more detail see Resisting enforcement - what not to do.
A statutory demand or a petition for liquidation/bankruptcy can be served/presented if an award is not paid.
An adjudicator’s decision may be the subject of an effective statutory demand/petition if there are no outstanding proceedings which effectively overturn the award. If the losing party starts litigation/arbitration to obtain a final determination, a court is unlikely to make a winding up/bankruptcy order until such proceedings are determined. The Court can refuse to make a winding up or bankruptcy order in certain circumstances.
If the debtor disputes his liability on the basis that he has a cross-claim which extinguishes the value of the award, he is at risk that the Court will not consider it a genuine cross-claim if he fails to bring his own adjudication/litigation/arbitration in respect of it within a reasonable time.
For more detail see Insolvency proceedings.
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