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Bad Decisions
John L Riches, 15th February 2005
John Riches visited the Branch in February, and delivered a talk based both on his experiences as adjudicator and arbitrator and on the receiving end of Decisions and Awards that weren't quite as they should be!
John started by clarifying the point that "bad" and "unenforceable"? are not necessarily the same thing. Just because a decision is 'bad', it doesn't mean that the Courts won't enforce it. He particularly brought to our attention the Opinion given in the Scottish case of Diamond & Ors v PJW Enterprises Ltd [2003] ScotCS 343, which confirmed, amongst other things, that:
"…provided that the adjudicator asks himself the correct question, his decision is not reviewable in this process…"
This might seem only mildly surprising until you consider that the Court of Session also made the following comments:
"The adjudicator has failed to specify what degree of skill and care he thought was applicable… or to provide a cogent reason why the… wrong decisions amounted to a breach of contract. It is my impression that he had little grasp of the subject. He seems to have taken the naive view that wrong decisions …constituted professional negligence…In my view, he has made an error of law."
So a 'mad' or 'bad' Decision can still be enforceable; an adjudicator can be wrong in both fact and law as long as he is not outside his jurisdiction.
So how do we go about making good decisions? John took us through a few points on procedure and analysis. As those of you who know John would expect, his approach is based on straightforward common sense.
First, he touched on the much-discussed topic of ascertaining the facts and the law. It is John's view that this is simply a procedural license to help those making decisions to apply the appropriate law to the facts: how else do you decide in accordance with the contract? All too often, adjudicators in particular have a tendency to go off on romps of their own or get distracted by lawyers into concentrating on the law before they have even familiarised themselves with the facts or established the issues actually in dispute between the Parties. It is an absolute must to establish the issues, or facts to be proven, first. If in doubt, tell the Parties what you think the issues are. They can correct you if they think you're wrong, and if they don't disagree with your analysis then you have a clear outline of what you have jurisdiction to decide.
Another simple point often missed is that the issues in dispute should be sorted out from what is already common ground between the Parties. It is not unknown for adjudicators or arbitrators to '?decide' on something that wasn't in dispute in the first place! Information and evidence should be gathered and applied on an issue-by-issue basis, and adjudicators and arbitrators should never, ever, go to a meeting unprepared.
Adjudicators and arbitrators should watch themselves at all times to ensure that they don'?t give themselves evidence, or make a case for a Party where none truly exists. Whilst it can sometimes be difficult to resist, adjudicators and arbitrators must refrain from making a better case for a Party, even when they know that one exists. If your own alternate view is too strong to resist, you must tell the Parties what it is and make sure that they have sufficient time to consider it and respond.
Moving on to the Decision itself, John gave us some pointers on weighing evidence and the standard of proof. Weighing evidence is a combination of common sense and experience, and in John's opinion the more important an issue is then the greater the evidence must be to support it. The civil standard of proof - the balance of probabilities - applies, i.e. that that something must be more probable than not (Miller v Minister of Pensions AllER 1947 Vol 2 372). Another simple area often over-complicated is that to any established fact you must apply the law, and that is usually the law of the contract between the Parties. More often than not, this will also give you the remedy.
To conclude the main part of his talk, John then came to reasons. Reasons should not be your own ramblings, considerations and arguments with yourself; they should simply provide the reason you have reached your conclusion and the evidence that has persuaded you. Even if you are not expected to provide reasons in your Decision or Award (although good practice should be to include them unless explicitly told otherwise), you should have them written down anyway as you could be asked for them later. It also assists you to be certain of your conclusions by logically working them through to write them down. Some people are fearful that including reasons when not absolutely necessary gives more leeway for a Decision or an Award to be challenged. This is not the case: a challenge to the intelligibility of stated reasons can only succeed if the reasons are so incoherent that it is impossible for the reasonable reader to make sense of them.
To finish up, John gave us some amusing, if slightly worrying, examples of genuine clangers from adjudication Decisions and arbitration Awards he has been presented with. It would be poor form to recount them here, but some of them certainly make you think!