Dominic Helps
22 May 2003
Dominic Helps said his intention was to outline the adjudicator’s dilemma – ‘rough justice, or natural justice?’
Rough justice?
How can the adjudicator be expected to arrive at a correct and enforceable decision within the statutory 28 days? It was the professional’s responsibility to make the system work. Parliament invented a system where the results of the adjudication process produced a decision that had to be ratified by the Courts and which is therefore subject to Court scrutiny.
Relevant quotations from case law are:-
(i) "The timetable for adjudication is very tight, many would say unreasonably tight, and likely to result in injustice. Parliament must be taken to have been aware of this… It is clear that Parliament intended that the adjudication should be conducted in a manner which those familiar with the grinding detail of the traditional approach to the resolution of construction disputes apparently find difficult to accept."
(Macob v Morrison: Dyson J)
(ii) " However, the time limits, the nature of the process and the ultimately non-binding nature of the decision, all mean that the standard required in practice is not that which is expected of an arbitrator. Adjudication is closer to arbitration than an expert determination but it is not the same."
(Balfour Beatty v Lambeth: HHJ Lloyd)
(iii) "It is now well established that the purpose of adjudication is not to be thwarted by an overly sensitive concern for procedural niceties. Adjudication under the HGCRA is necessarily crude in its resolution of disputes."
(Balfour Beatty v Lambeth: HHJ Lloyd)
The judges obviously recognise that rough justice is a necessary aspect of the adjudication process.
Natural justice
Dominic stated that there is no reference to fairness, justice or natural justice in the Construction Act. An absolute requirement for natural justice in adjudication would make it impossible to come to a decision in 28 days.
However, HHJ Lloyd has said (Glencot v Ben Barrett):
" … The adjudicator has to conduct the proceedings in accordance with the rules of natural justice or as fairly as the limitations imposed by parliament permit."
HHJ Lloyd has also suggested that the rougher the justice the more important natural justice becomes (Balfour Beatty v Lambeth):
"It is now clear that the construction industry regards adjudication not simply as a staging post towards the final resolution of the dispute in arbitration or litigation but as having itself considerable weight and impact that in practice goes beyond the legal requirement that the decision for the time being has to be observed. Lack of impartiality or of fairness in adjudication must be considered in that light. It has become all the more necessary that, within the rough nature of the process, decisions are still made in a basically fair manner so that the system itself continues to enjoy the confidence it now has apparently earned"
Mitigating the dilemma
If parties adopt responsible provisions such as the TeCSA Rules version 2.0, then many appeals can be prevented, as the following extracts indicate:-
"17 Wherever possible, any decision of the Adjudicator shall reflect the legal entitlements of the Parties. Where it appears to the Adjudicator impossible to reach a concluded view upon the legal entitlements of the Parties within the practical constraints of a rapid and economical adjudication process, any decision shall represent his fair and reasonable view, in light of the facts and the law insofar as they have been ascertained by the Adjudicator, of how the disputed matter should lie unless and until resolved by litigation or arbitration. …
"20 The Adjudicator shall establish the procedure and timetable for the Adjudication.
"21 Without prejudice to the generality of Rule 20, the Adjudicator may if he thinks fit:
…..(vii) Make use of his own specialist knowledge.
…..(ix) Meet and otherwise communicate with any Party without the presence of other Parties.
…..(xii) Conduct the Adjudication inquisitorially, and take the initiative in ascertaining the facts and the law.
…..(xiii) Reach his decision(s) with or without holding an oral hearing, and with or without having endeavoured to facilitate an agreement between the Parties.
"22 The Adjudicator shall exercise such powers with a view of fairness and impartiality, giving each Party a reasonable opportunity, in light of the timetable, of putting his case and dealing with that of his opponents."
In illustration Dominic quoted the case of Balfour Beatty v London Borough of Lambeth. The adjudicator was an expert programmer and was aware of the difficulties in not having a critical path programme; therefore he prepared his own. It was a long and difficult judgement by HHJ Lloyd, but there are four relevant paragraphs:
"An adjudicator is not of course limited to the material presented by the parties. He may obtain further information and may apply his own knowledge and experience. Above all ‘he has to take the initiative in ascertaining the facts and the law’. He has an ‘absolute discretion’ to do what ‘he considers necessary’.
"Is the adjudicator obliged to inform the parties of the information that he obtains from his own knowledge and experience or from other sources and of the conclusions which he might reach, taking those sources into account? In my judgement it is now clear that, in principle, the answer may be yes. Whether the answer is in the affirmative will depend on the circumstances. The reason lies, at least in part, in the requirement that the adjudicator should act impartially. That must mean that he must act in a way that will not lead an outsider to conclude that there might be any element of bias, i.e. that a party has not been treated fairly.
"An adjudicator is of course entitled to use the powers available to him, but he may not of his own volition use them to make good fundamental deficiencies in the material presented by one party without first giving the other party a proper opportunity of dealing both with that intention and with the results. The principles of natural justice applied to an adjudication may not require a party to be aware of ‘the case that it has to meet’ in the fullest sense since adjudication may be ‘inquisitorial’ or investigative rather than ‘adversarial’. That does not however mean that each party need not be confronted with the main points relevant to the disputes and to the decision.
"An adjudicator, acting impartially and in accordance with the principles of natural justice, ought, where there is not enough time available, to inform the parties that a decision could not properly, reasonably and fairly be arrived at within the time and invite the parties to agree further time. If the parties were not able to agree more time, then an adjudicator ought not to make a decision at all and should resign".
Dominic said that the following quote from the judgement of HHJ Wilcox in Try Construction v Eton Town House Group was where we stand at present:
" I accept that the principles of procedural fairness (or the need to observe the rules of natural justice) are not to be regarded as diluted for the purposes of the adjudication process. In an individual case, however, they must be judged in the light of such material matters as time restraints, the provisional nature of the decision and any conclusions or agreements made by the parties as to the nature of the process in a particular case."
The adjudicator’s dilemma
In summary then the adjudicator has to balance a number of conflicting duties:
- Duty to ascertain facts and the law:
• adjudicator can take the initiative/act inquisitorially;
• adjudicator can use his own knowledge/expertise (i.e. JCT 98/TeCSA).
- Duty to act impartially:
• rules of natural justice apply but time constraints relevant;
• as applied so far, natural justice bites on apparent bias/lack of impartiality;
• adjudicator must give both parties opportunity to comment on unagreed methodology or analysis and material facts discovered (of the utmost importance);
• lack of time no excuse for depriving parties of opportunity to comment;
• in those circumstances adjudicator should secure extension or resign (but contrast TeCSA Rules).
reported by David Bailey