This affair asks whether a collateral warranty is capable of being adjudicated like any other construction contract. Pause for a moment. A collateral warranty creates a direct second link between, say, an employer and a subcontractor – second in the sense that an employer can then obtain remedial works either from the main contractor or the subcontractor which actually did the work. It’s another string to the employer’s bow. A contractual link is needed in order to claim economic loss. The collateral warranty is frequently used to link a main contractor with a new owner of the premises built or to link a tenant with the main contractor.

In Abbey Healthcare (Mill Hill) Ltd vs Simply Construct (UK) LLP, Abbey took a 25-year lease on a new building for a care home in Mill Hill, London, called Aarendale Manor. Abbey waved the collateral contract at the main contractor, Simply Construct, alleging the partitioning was not 60-minute fire-rated. The claim neared £2m. The Abbey lease required the leaseholder to claim defective work via the collateral warranty from the main contractor, but when it baulked Abbey began an adjudication. Irrespective of whether Abbey had a good claim, Simply Construct deployed a debate we have been having for 20 years: is a collateral warranty a construction contract? If yes, the adjudicator has jurisdiction; if no, it’s goodbye to the adjudicator.

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