Green light for adjudicating DPA Claims - BDW Trading v Ardmore Construction

The landmark case of BDW Trading Limited v Ardmore Construction Limited heard in the Technology and Construction Court is a testament to the evolving landscape of construction law, particularly in the wake of the major changes brought in by the Building Safety Act 2022 (BSA).  

Background

Ardmore challenged the jurisdiction of an adjudicator to hear a tortious claim for alleged defective works to a residential development under the Defective Premises Act 1972 (DPA).  The claim was outside the contractual limitation period and was only made viable through the extension of the statutory limitation period for DPA claims from 6 to 30 years, courtesy of the BSA. 

Central to Ardmore's challenge were the words “under the contract” and whether that precluded DPA claims being referred to an adjudicator.  The statutory right to bring adjudications under the Housing Grants, Construction and Regeneration Act 1996, refer to disputes which are “under the contract”.  They also featured in Article 5 of Ardmore's building contract, which expressed the right to refer any dispute or difference “arising under this Contract” to adjudication.  This was an apparently narrower expression than the wording of the arbitration clause (Article 6A) which directed that any dispute or difference as to “any matter or thing of whatsoever nature arising under this Contract or in connection therewith” could be referred to arbitration; a difference which Ardmore seized upon.   

Jurisdiction Over Tortious Claims: Stretching the Boundaries

The court decided that an adjudicator did have jurisdiction to determine a DPA claim as it arose from a dispute under the contract.  

The court's reliance on the Fiona Trust principle, a case which favours a broad interpretation of dispute resolution clauses, signals a judicial preference for a 'one-stop shop' approach to dispute resolution (instead of seeing some disputes falling in or outside of the ambit of statutory adjudication).

The distinction between the wording in Articles 5 and 6A of the building contract might seem like a mere linguistic exercise, however, the court's decision to treat this distinction as inconsequential is a bold statement that reaffirms the principle that form should not override substance.

Undoubtedly, the court's deliberation on this point will be a source of great interest for the construction industry and may well open the floodgates. Whilst many will welcome the decision, offering a quicker resolution of similar disputes, others may question the suitability of adjudication to deal with potentially complex, historic, latent defects cases and whether either party could be given a fair hearing leading to allegations of breaches of natural justice (as Ardmore argued).

Conclusion: A New Chapter in Construction Adjudication

The BDW Trading v Ardmore Construction judgment is more than just a resolution of a dispute; it brings in a new era in construction adjudication. The TCC has not only provided clarity on several contentious issues but has also laid down a marker for future disputes.