The decision of the Supreme Court of the United Kingdom recently in Aspect Contracts (Asbestos) v Higgins Construction [2015] UKSC 38 might well provide a good reason for adjudication losers who paid up on an adjudication determination in late 2009, or where it is coming up for 6 years since a payment was made pursuant to an adjudication determination, to think about dusting off their files.

The way works is like this. All around the world, adjudication is intended as a “pay now, argue later” scheme. If the adjudicator finds for a claimant, then the respondent has to pay up, but without prejudice to the respondent’s right to reclaim that amount in subsequent litigation or arbitration. But what is the basis of that right to reclaim?

During the currency of most formal building contracts, there is a contractual answer to be found in the final account provisions. After the contract work has been completed, these final account provisions typically require a calculation to be made of the amount eventually due under the contract. All the amounts that have been paid up to that point to take into account, and the balance is paid – or repaid – as the case may be. If the contractor has been paid more than he is entitled to, then the express terms of the contract provide a route whereby the principal gets the excess back.

In the absence of a final account provision, the right of the principal to recover any overpayment is much more problematic. There are certain circumstances where the principal might have a right of recovery in restitution, i.e. for money had and received, particularly where the money has been paid pursuant to a relevant mistake. It might be possible, for example, for the principal to demonstrate a relevant mistake if the contractor has defrauded her by misrepresenting the work that he has done. Somewhat more rarely, the principal might be able to demonstrate that she has paid as a result of duress; again, that duress would enliven a right of recovery in restitution. Yet again, in the even more improbable case that the contract or has done no work at all, the right of recovery would be enlivened by a total failure of consideration. These categories are conveniently summarised at Continue reading →