Construction lawyers and professionals alike were treated to, not only, uncommon judicial consideration of the operation of NEC contracts, but a relatively exceptional instance of an adjudicator's decision not being enforced in the 2026 decision of Premier Modular Ltd ("PML") v Maidstone and Tunbridge Wells NHS Trust ("the Trust").[1]
Senior Associates Phoebe Gunputh and David Humphreys consider in this article the rules relating to natural justice and the wider implications of the judgment in the context of enforcement of adjudication decisions.
Background
By an adjudicator's decision dated 26 February 2026, PML was awarded the sum of £1,655,385.49 (and other relief) against the Trust ("the Decision").
PML sought to enforce the Decision by way of a summary judgment application in the Technology and Construction Court ("TCC"). The Trust submitted that that the Decision was reached in breach of natural justice on three grounds, of which Grounds 1 and 3 were of relevance:
i. Ground 1: The Adjudicator’s central finding that there had been a compensation event was made on a contractual basis that had not been raised by the parties and on which neither party had made submissions. The Trust says that this was “an unforeseen and unforeseeable aspect of the Decision that goes to its heart”.
ii. Ground 3: The Adjudicator made a finding that the Accepted Programme had been updated. This was not part of the Adjudication and, moreover, was entirely contrary to the clear position of both parties in the Adjudication that the Accepted Programme had not been updated.
The TCC ultimately refused to grant PML summary judgment enforcing the Decision on the basis that the Trust had a real prospect of establishing that the Adjudicator reached its central findings in the Decision in breach of natural justice.
The rules on natural justice
The attainment of fairness is central to the principle of natural justice, and the courts have been steadfast in refusing attempts by defending parties to deploy it against decisions which are unfavourable, as opposed to unfair.
The 'unfairness' in this case took the form of a complaint by the Trust that the Adjudicator had made the Decision on a basis which it did not have an adequate opportunity to deal with. Such category of unfairness was held to be a breach of natural justice by Justice Akenhead in Cantillon Ltd v Urvasco Ltd who described that such breach would occur "only if the adjudicator goes off on a frolic of his own, that is wishing to decide a case upon a factual or legal basis which has not been argued or put forward by either side, without giving the parties an opportunity to comment".[2]
The relevant facts
The Trust (as Client) employed PML (as Contractor) under a contract for the design and construction of a new barn theatre dated 3 August 2023 and based on the NEC4 Option A (Priced contract with activity schedule) ("the Contract"). The original completion date for the work was 31 January 2024 and the problems central to the adjudication arose in late 2023.
PML asserted that it required a permanent mains water supply to be made available not later than 30 October 2023 and that the Trust failed to make it available until 20 February 2024, which caused PML delay. The Trust’s position was that it was responsible for the mains water supply, but there was no requirement for it to be made available by any particular date.
The Contract provided for a list of compensation events. Under clause 60.1(3) of the Contract, a compensation event arose if: "(3) The Client [the Trust] does not provide something which it is to provide by the date shown on the Accepted Programme…". The Accepted Programme[3] was at Appendix 3 of the Contract. It was common ground as between the parties in the TCC that: (a) The Accepted Programme was never updated and (b) the Accepted Programme contained no obligation to the Trust to make permanent water supply available by a particular date.
The parties' adjudication submissions both proceeded on the basis that:
(i) The Accepted Programme was that at Appendix 3 of the Contract; and
(ii) PML's entitlement, if any, arose under compensation events in clauses 60.1(1), (14) and/or (18) of the Contract.
It was not argued by either party that PML was entitled to compensation under clause 60.1(3), nonetheless, the Decision determined that there was a compensation event within the meaning of clause 60.1(3) because the Trust had not provided the water main by the dates set out in a revised programme which neither party said was an Accepted Programme. By contrast, the Accepted Programme contained no such dates. In the words of the judge in this case "[t]his startling conclusion was clearly material to the Decision, and it should have been put to the parties for comment. It was a breach of the rules of natural justice not to do so: the Adjudicator went off on a “frolic” by, in effect, inventing a case for PML which he considered to be superior to that which they actually advanced."
A note on NEC
The decision is also noteworthy from an NEC perspective. NEC remains unusual amongst the major standard forms in expressly allocating to the Client the risk of failing to provide something required for the Contractor to carry out the works. Clause 60.1(3) treats such an occurrence as a compensation event. However, that entitlement is ordinarily constrained by the notification regime in clause 61.3, which bars claims not notified within eight weeks of the Contractor becoming aware that the event has happened, unless one of the limited exceptions applies.
As such, the Adjudicator's conclusion potentially deprives the Client of a significant contractual protection. If the relevant delay is characterised as arising from the Client's failure to provide information, access or another prerequisite for performance, clause 60.1(3) would ordinarily provide the contractual route for relief, bringing with it the discipline of the compensation event procedure and the accompanying time bar. Although the Premier Modular judgment does not address the point directly, such an outcome arguably allows the Contractor to obtain an extension of time without engaging the contractual machinery that NEC deliberately establishes for the management of such risks. That cannot be correct.
The facts also raise an interesting and unresolved question concerning delay analysis under NEC4. Assuming that a valid compensation event could be established through the clause 60.1(3) gateway, how should the Project Manager assess its effect upon the Completion Date where the only Accepted Programme is the programme appended to the Contract and no subsequent Accepted Programmes have been issued?
The orthodox NEC approach requires compensation events to be assessed prospectively. Clause 63 proceeds on the basis of a forecast of the effect of the event upon the remaining works, requiring the Project Manager to disregard the benefit of hindsight. That methodology is relatively straightforward where the Accepted Programme reflects the contemporaneous state of the works. Difficulties arise, however, where the Accepted Programme has become detached from reality. If a compensation event occurs near completion and the operative Accepted Programme is many months out of date, a strictly prospective assessment may require the Project Manager to evaluate the event against a programme which no longer bears any meaningful relationship to actual progress on site.
The resulting tension exposes a broader question within NEC administration. The contractual preference for prospective assessment is founded upon the existence of a current Accepted Programme against which future effects can sensibly be measured. Where programme management has broken down, adherence to that principle may produce results which are neither realistic nor commercially defensible. The circumstances of Premier Modular therefore illustrate, not merely the importance of maintaining Accepted Programmes throughout the project, but also the potential limits of NEC's prospective assessment model when that discipline has not been observed.
Analysis
Whilst the test in deciding PML's application for summary judgment was one of 'real prospect of success' (i.e. an examination that does not require a mini trial), the conduct of the adjudicator went far beyond a 'real prospect' of a breach of natural justice.
Although the TCC was mindful to express its sympathies to the difficulty faced by adjudicators in grappling with substantial disputes in the truncated adjudication timetable, it was unequivocal that the 'unfairness' in this case was not a result of lack of time; rather it was the result of the fabrication of a case that (a) had not been made and (b) had not been canvassed with the parties.
There are echoes here of the decision in Liverpool City Council v Vital Infrastructure Asset Management Ltd (in administration) [2022] EWHC 1235 (TCC). Although the contractual issues were very different, both cases raise a common concern regarding the limits of an adjudicator's freedom to reach his or her own conclusions.
In Liverpool City Council, the referring party advanced a particular case concerning the valuation of the works. Faced with difficulties in that case, the adjudicator concluded that the parties had effectively agreed that a pricing document contained an error. The difficulty was that no such case had been advanced by the referring party and no such allegation had been put to the responding party for comment. The adjudicator's decision was therefore vulnerable because it rested upon a factual and legal basis which formed no part of the dispute referred to him.
A similar concern arises in Premier Modular. PML's case was founded upon a prevention principle analysis. The Trust's response was directed to that case and, in particular, to the proposition that any entitlement should have been pursued through the contractual compensation event regime. Having rejected PML's primary argument, the adjudicator nevertheless identified an alternative route to relief by concluding that the contractual mechanism did not apply because the relevant delay was not a compensation event at all.
That conclusion may ultimately be right or wrong as a matter of contractual interpretation. The more fundamental question is whether it was a conclusion that the parties had been given a fair opportunity to address. Adjudicators are not confined to choosing between the parties' submissions and are entitled to reach their own conclusions on the material before them. Equally, there is a well-established distinction between reaching an independent conclusion on an issue in dispute and deciding the case on an altogether different basis from that advanced by either party.
The danger, as Liverpool City Council illustrates, is that an adjudicator confronted with perceived weaknesses in the referring party's case may be tempted to identify an alternative analytical route to the same result. Where that route has not been articulated by either party and has not been exposed to adversarial scrutiny, questions of natural justice inevitably arise. The concern is not that the adjudicator reached the wrong answer, but that the answer was reached by reference to a case which neither party was invited to meet.
The speed and informality of adjudication do not relieve adjudicators of the obligation to ensure that the basis of their decision has been fairly ventilated. Indeed, where an adjudicator considers that the proper analysis may differ materially from that advanced by either party, procedural fairness may require that the issue be raised expressly before the decision is reached.[4]
Key takeaways
- The decision in Premier Modular serves as a reminder that the boundaries of adjudication are defined not merely by the dispute referred but also by the parties' right to be heard on the issues that determine the outcome.
- Requests for clarification from the adjudicator should fairly canvas issues on which any decision may be based; if, like the Trust, a party is faced with a case for the first time in the adjudicator's decision it will be a clear breach of the rules of natural justice.
- Each case will be fact sensitive, but parties should be mindful that TCC judges in adjudication enforcement cases are exercising discretion under the summary judgment regime;[5] i.e not the usual balance of probabilities standard of proof.
- The courts will generally respect and enforce adjudicator's decisions, but interference in cases of unfairness rightly promote the course of justice and provide confidence in the judicial scrutiny afforded to adjudication through the enforcement regime.
[1] [2026] EWHC 1404 (TCC)
[2] [2008] B.L.R. 250 at [57]
[3] The Contract by clause 11.2(1) defined the “Accepted Programme” as “the programme identified in the Contract Data or…the latest programme accepted by the Project Manager.”
[4] Notably, the judge held that the adjudicator's request for clarification on clause 60.1(3) did not go far enough to ask the parties to consider whether it was in play (rather it made reference to the Accepted Programme) – see paragraph 39(iii) of the judgment.
[5] Civil Procedure Rule 24
