Bovis Lend Lease v The Trustees of the London Clinic [2009] EWHC 64

This summary was provided by CMS Cameron McKenna LLP.

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Absent fraud, it will be “a rare case, if ever” that an Adjudicator will be found to have materially breached natural justice by not giving a party a reasonable opportunity to present its case where that party has not raised the issue during the adjudication.

The Hon. Mr Justice Akenhead, Queen’s Bench Division, Technology and Construction Court


The Trustees of the London Clinic (“the Clinic”) entered into a redevelopment contract with Bovis Lend Lease (“Bovis”).  Practical completion was achieved in August 2006, 58 weeks late.  Over the course of the works and following practical completion, Bovis made numerous applications for extensions of time and prolongation costs but the Clinic only ever allowed a 4-week extension of time and £150,000 on account of prolongation costs in its valuations.

In late 2006, Bovis made applications for further extensions of time, relying upon expert reports prepared by a Mr Marshall and a Mr Sworder.  Bovis also engaged a Mr Wort to report on loss and expense relating to the delays.  Mr Wort produced a preliminary report based largely on estimated figures and advising that Bovis was entitled to a sum of £3,669,718 for loss and expense.  Bovis subsequently made claims based on this figure, which the Clinic continued to disallow.  In March 2007, the architect sent his detailed post completion date review in which he stated that no further extensions of time were due.

Mr Wort produced a second report in June 2008 using actual figures based on new evidence.  This was served on the Clinic on 7 July together with other new expert reports, five witness statements and a Draft Referral Notice claiming a full extension of time, reimbursement of liquidated damages of just over £1.6m, and almost £3.3m for loss and expense.  The Clinic requested, and was granted, extra time to respond.  On 18 August the Clinic advised that they had given Bovis’ claims “due consideration” and considered that there was insufficient evidence to support them.  In any event, in relation to loss and expense, Bovis had not made a valid application under the contract.  The Clinic requested further information in regard to that claim.

Bovis commenced adjudication proceedings and issued a final Referral Notice that was substantially identical to the Draft.  Aside from requesting a 2-day extension of time to serve its Response, the Clinic made no objections to the adjudication timetable.  However, it did argue that the Adjudicator had no jurisdiction to decide the loss and expense claim because no dispute on that issue had crystallised and, in any event, Bovis had not made an application in accordance with the contract and therefore no dispute had arisen “under the contract” that could be referred to adjudication. 

The Adjudicator decided that Bovis was entitled to approximately £3.8m, including around £1.8m for loss and expense.  The Clinic refused to pay on the basis of its original objections to the Adjudicator’s jurisdiction and a further challenge – raised for the first time – on the basis that Bovis had “ambushed” the Clinic with the adjudication which amounted to a breach of natural justice.  Bovis brought enforcement proceedings.


The issues were:

  • Whether there was a “dispute” regarding the claim for loss and expense; and
  • Whether the decision was reached in breach of the rules of natural justice.


The Court enforced the Adjudicator’s decision.

As to jurisdiction, the Court said that “dispute or difference” was not a term of art and did not arise merely upon notification of a claim or expiry of a deadline set by the claimant, but at the point when the claim was “not admitted” (which will depend on the surrounding circumstances).

The Court cast doubt on the survival of authority relied on by the Clinic that a request for further information did not amount to non-admission of the claim.  Unless the claim was so “nebulous and ill-defined” that the respondent could not sensibly respond to it, the Court thought a dispute would usually arise notwithstanding a request for information.  In any case, the Clinic had not expressed itself here as seeking further information to try and understand the nature of Bovis’ claim, but to try and defend the claim itself. 

Once a dispute had crystallised, the Court drew a distinction between the substance of that dispute and the evidence required to support/contest the disputed claim.  Given the Clinic’s detailed consideration (and non-acceptance) of the claim in Bovis’ Draft Referral, within a time limit set by the Clinic itself, the Court concluded that the whole Draft Referral was in fact “disputed”.  It did not, therefore, have to decide whether or not the “new” quantum claim put forward in the Draft Referral Notice was so new that it amounted to a new claim or merely new evidence (although it appeared to suggest that the latter was the case). 

The issue of whether Bovis had made applications for payment of loss and expense in accordance with the contract was part of the dispute.  In any event, the adjudication clause should be construed in a purposive and commercial way so that it was not limited to claims which were established under the contract.

As to breach of the rules of natural justice, since Bovis had granted the further time requested by the Clinic to respond to the Draft Referral, the Court did not consider that there had been any “ambush”.  Besides, natural justice was a burden on the Adjudicator not the parties, and was not breached merely by a party behaving “badly”.  In this case the Court considered that the Clinic had had reasonable opportunity to present its case and no material breach of natural justice had been established.  It was extremely significant in this respect that the Clinic had failed to raise the issue during the course of the adjudication.

This summary was provided by CMS Cameron McKenna LLP.

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