Guest Article: That's It!
The Final Certificate is key to JCT contracts. The employer / contractor has 28 days in which to challenge the Certificate. If not, the Certificate conclusively decides certain matters – defects, delays and how much the contractor will be paid. In Marc Gilbard 2009 Settlement Trust (Trustees of) v OD Developments and Projects Ltd [2015] EWHC 70 Coulson J considered how clause 1.9 (Final Certificate) of the JCT Standard Form of Building Contract works.
The Trust argued that clause 1.9 prevented any proceedings outside the 28-day period, including any future adjudication. No, said the contractor. He had issued Court proceedings within the 28-day period. That made the Final Certificate inconclusive in all other proceedings. The contractor could now take the valuation in the Final Certificate to adjudication. If not, the right to refer a dispute to adjudication "at any time" under the ‘Construction Act’ would be fettered.
Coulson J decided – ‘… the purpose of clause 1.9.3 is to limit those matters in respect of which the Final Certificate is not conclusive to those matters raised in the proceedings issued within 28 days.’ In other words, if the contractor did not specifically challenge an item in the valuation then that item should be taken as agreed even if the parties had previously argued about it. Clause 1.9.3 envisaged one set of proceedings – ‘There are certainly no words in clause 1.9.3 which permit a series of subsequent proceedings …’ In this case the contractor initially chose just to litigate. After 28 days, he could still go to adjudication but in that adjudication the Final Certificate would be conclusive – ‘The Act does not provide an unfettered right to adjudicate regardless of other contractual terms.’
The warning for clients and lawyers is clear – quick decisions are needed on tactics after a Final Certificate is issued.
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These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.