Limitation Act and the right to adjudicate
In the case of LJR Interiors Ltd v Cooper Construction Ltd [2023] EWHC 3339 (TCC), concerned the inter-relationship of a claim in adjudication and the Limitation Act.
The background is that the parties entered into a simple contract for construction works in 2014. LJR had made three payment applications, the last of which was effectively the final payment application.
In 2022, LJR submitted a fourth payment application largely duplicating its last application and seeking release fo retention, some admin charges and interest. Coopers did not serve a payment or pay less notice and LJR submitted the dispute to adjudication,. IN response, Cooper stated the claim was misconceived, & possibly fraudulent and was statute barred.
The adjudicator decided that the payment application 4 was a valid one, it was genuine & that there was no time limit under the Scheme for submitting a dispute to adjudication and notably that the Limitation Act 1980 s5, barred the remedy, not the right to make the claim. He ultimately found in favour of LJR.
The matter proceeded to court which concluded the right to adjudicate must be subject to statutory limitation. This meant that it was open to a responding party in adjudication to raise limitation as a substantive defence which the adjudicator had to consider.
The court also looked at LJR’s payment application 4 and concluded it was out of time and that payment was not exclusively covered by the Scheme.
The court also found that the newly introduced claims for retention, admin charges and interest were each of them time barred.. Further that the adjudicator’s decision was wring in disregarding the limitation defence.
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