Aspect Contracts (Asbestos) Limited v Higgins Construction Plc [2013] EWCA Civ 1541

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There is an implied term in a contract to which the Scheme for Construction Contracts (England and Wales) Regulations 1998 (the “Scheme”) applies that the unsuccessful party to an adjudication would be entitled to have the dispute finally determined by legal proceedings and, if successful, to recover the money it had paid.  The cause of action for the recovery of such payment accrues on the date that the payment was made.  In this case, therefore, the unsuccessful party had six years from the date of payment to commence legal proceedings to recover the amount which it had paid. The successful referring party in the adjudication who considers that the adjudicator awarded too little does not benefit from the extended time period.  In this case, therefore, the limitation period applicable to the successful party’s claim to be paid more than the adjudicator had awarded was six years from the date of the original breach of the contract or the date of the loss suffered as a result of any breach of a duty of care.

Technology and Construction Court, Lord Justice Longmore, Lord Justice Rimer and Lord Justice Tomlinson


In March 2004, Aspect Contracts (Asbestos) Ltd (“Aspect”) entered into a contract with Higgins Construction plc (“Higgins”) to carry out an asbestos survey at a housing estate in Hounslow that was to be demolished and redeveloped for Notting Hill Housing Trust. The survey was carried out in April 2004 and Aspect was paid in June 2004. Higgins alleged that, in February 2005, its specialist asbestos removal sub-contractor found additional asbestos containing material (“ACM”) on site which had not been revealed in Aspect’s survey.

Higgins alleged a critical delay of 17 weeks by 27th September 2005 was caused by the removal of the additional ACM. In June 2009, it referred the dispute with Aspect to adjudication. The contract did not contain an express adjudication clause and so the adjudication proceeded on the basis of the Scheme, which was implied into the parties' contract by section 108(5) of the Housing Grants, Construction and Regeneration Act 1996.

In July 2009, the Adjudicator found Aspect liable and awarded Higgins £658,017 (it had claimed £822,482) as damages for breach of contract for failing to conduct the survey properly and to identify the presence of ACM. Aspect paid the Adjudicator's award in August 2009.

In February 2012, Aspect commenced proceedings seeking “a final and binding resolution of a dispute which was referred to adjudication” and a declaration that they were not liable to pay damages to Higgins in the amount decided by the Adjudicator or at all. Higgins served a counterclaim in the proceedings in which it claimed that it was entitled to the full amount it had originally claimed in the adjudication. As to Aspect’s claim, Higgins argued it was statute barred because Aspect had issued proceedings more than six years after

  • Aspect’s cause of action arose in contract (which was when Aspect was (or was not) in breach of its contract); and
  • Aspect’s cause of action arose in tort (which was when Higgins suffered loss as a result of any breach of duty of care by Aspect).


The parties agreed to ask the court to decide four preliminary issues:

  • Was it an implied term of the parties' contract that an unsuccessful party to adjudication would be entitled to seek a final determination by litigation and, if successful, recover payment made?
  • If there was such an implied term, what was the applicable limitation period for a claim seeking to enforce it?
  • What was the limitation period applying to Higgins' counterclaim?
  • Did Aspect have a claim in restitution?


The Court held:

  • That a term would be implied into the contract as set out in the first of the preliminary issues. Paragraph 23(2) of the Scheme expressly provided that the adjudication was only to be binding until the dispute was finally determined. That of itself contemplated that the final determination may be different from the adjudication and that it was the final determination which was to be determinative of the rights of the parties. If the final determination decided that a particular party had paid too much, repayment was to be made. To the extent that there was no reference to such repayment in paragraph 23(2) of the Scheme it was implicit. But it was as close to being explicit as it was possible to be.
  • That on the second issue of limitation period, the cause of action for the repayment of an amount awarded by an adjudicator accrues on the date of payment and in this case therefore the limitation period was to be six years from the date Aspect paid Higgins the sum awarded by the Adjudicator.
  • That on the third issue, the limitation period applying to Higgins’ counterclaim was to be six years from the alleged breach of contract by Aspect.
  • The fourth issue was not argued and hence there would be no decision on it.

This summary was provided by CMS Cameron McKenna LLP.

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