Nailing down construction law: Bringing Defective Premises Act claims by adjudication

Solicitor apprentice Ellen Williamson and associate solicitor Gillian Scribbins offer insight into the wider scope of claims that may now be brought by adjudication. This includes Defective Premises Act 1972 (DPA) claims, as highlighted in the recent case of BDW Trading Limited (BDW) vs Ardmore Construction Limited.

Understanding adjudication

Statutory adjudication was introduced by the Housing Grants, Construction and Regeneration Act 1996 (HGCRA). Adjudication is a process whereby a dispute between two parties, primarily in the construction industry, is referred to a third party for a decision. This process is commonly used for construction contract claims; however, a recent case suggests that DPA claims could also be referred to adjudication.  

BDW & Ardmore

Under a JCT building contract, Ardmore was to design and construct the shell and core of a block of apartments in Basingstoke, as well as some primary services and a partial fitting-out.  

Practical Completion of the project took place between December 2003 and June 2004. The building contract had been novated to BDW, who wrote a Pre-Action Protocol letter to Ardmore in 2022 and later referred a fire safety defect dispute to adjudication in March 2024.  

The adjudicator’s decision was reached in September 2024 and found that Ardmore: 

• had breached its duties under the building contract;
  
  
• but was also liable under the DPA, and that this claim was not time-barred due to the extended 30-year limitation period for DPA claims introduced by the Building Safety Act 2022; and  
  
  
• was therefore required to pay BDW circa £14.4million in respect of a cladding replacement scheme.  

BDW then applied to the Technology and Construction Court for a summary judgment to enforce the decision. Ardmore asserted that the decision should not be enforced due to the adjudicator not having sufficient jurisdiction to rule on DPA or tortious claims.  

Article 6A of the building contract stated that both parties had the right to refer (any) disputes to arbitration.  

However, Section 108(1) of HGCRA states that adjudication is limited to disputes which are “under the contract” and this wording was mirrored in Article 5 of the building contract.  

Defining ‘under the contract’ disputes

When seeking to establish what was meant by “under the contract”, Justice Joanna Smith applied the findings of the Fiona Trust case. The principle established by that case, was that it would not make commercial sense for parties to want to narrow the scope of disputes that can be referred to adjudication in comparison to that of disputes that can be referred to litigation and that it would be reasonable for parties to expect all disputes could be resolved by the same method. 

Justice Joanna Smith found no clear language contradicting this principle; therefore, in this instance, the court found that the adjudicator had jurisdiction to rule on the DPA claim in the BDW v Ardmore adjudication. 

Adjudication vs litigation 

When entering into a construction contract, you should be cautious that tortious and statutory claims, including those for misrepresentation as well DPA claims, can now be brought by adjudication.  

If you do not want DPA claims or tortious claims to be brought by adjudication, then it is important to consider including a specific dispute clause in contracts that narrows the use of adjudication. Include carve-out wording for tortious and DPA claims.  

For legal advice on construction contracts or disputes, contact Ross Galbraith [email protected] or Gillian Scribbins at [email protected].